How to Add a Tax Credits/TD1’s

The purpose of the TD1 form is for the employee to share basic personal tax information so you, as the employer, can withhold the right amount of income tax on each paycheque.

Province Payroll makes it easy to record this information accurately.

🧾 Your Role as the Employer

  • You are responsible for asking the employee to complete both a Federal and a Provincial TD1.

  • You should enter the amounts exactly as they appear on the completed form.

  • You are not responsible for advising the employee on how to fill it out.

You’ll find the TD1 entry section under the employee’s Active Tax Credits area. Click "Add New Federal TD1" or "Add New Provincial TD1" to get started.

✍️ Entering a TD1 in Province

Each TD1 form requires:

  • Year – Select the calendar year the form applies to.

  • Total Claim Amount – This is the amount on line 13 of the Federal TD1 or the matching field on the provincial version.

  • Do Not Withhold – If the employee’s total income is less than their claim amount, check this box (indicated on page 2 of the form).

  • Additional Options (Federal only, and both are indicated on page 2 of the form):

    • Deduction for Living in a Prescribed Zone

    • Additional Tax to Be Deducted

Province will always use the most recently entered TD1 for the given year when calculating payroll.

📝 If no TD1 is entered, Province will default to the Basic Personal Amount for that year and jurisdiction, based on government rates.

We do not carry forward claim amounts from one year to the next. This is because the CRA requires employees to fill out a new form each year if they are claiming anything other than the Basic Personal Amount.

📄 CRA-Authorized Additional Deductions (Federal TD1 Only)

At the bottom of the Federal TD1 entry form, you’ll see a section titled “Annual Deductions Authorized by a Tax Services Office.”

  • Only complete this section if the employee gives you a letter from the CRA instructing you to deduct less tax.

  • The letter will include one or more deduction codes (e.g., F1, F2, K3, K3P).

  • Enter the values as shown in the letter.

📂 Keep a copy of the CRA letter with your payroll records in case the CRA requests it later.

These deductions are rare but must be handled exactly as outlined by the CRA.

Once you’ve entered and saved the TD1, you’re done. Repeat the process for the Provincial form if it hasn’t been entered yet.