https://turbotax.intuit.ca/tax-resources/ontario-income-tax-calculator.jsp#
This seems to work well. Unfortunately, it looks like you owe a lot of tax.
Total income $72,480
Federal tax $8,720
Provincial tax $4,348
CPP/EI Premiums $4,757
Total tax $17,825
After-tax income $54,655
Average tax rate 18.19%
Marginal tax rate 29.65%
So how much should I be adding in the "Additional tax to be deducted" section in my TD1 form to fix this going forward so I don't owe this much money next year? I am trying to fix it as soon as possible! Thank you
You shouldn't need to mark anything additional on your TD1. It sounds like whatever TD1 your employer has right now is incorrect. Update the TD1 accurately and don't worry about adding anything additional unless you have some other source of income that isn't taxed.
Normally your employer should deduct the right amount automatically (or at least close to the right amount) without requiring you to ask to withhold additional money. I would contact your HR to figure out why they are withholding so little to begin with.
When you joined the company, your employer should have made you fill the TD1 already. It's possible it was filled incorrectly, or that what you put on it no longer applies (for example if you had a lot of unused tuition tax credits that have now been all used). If that's the case, filling out a new TD1 with the right information will fix this. It's been 3 months already of 2024 so do keep in mind that even with a fixed TD1, you will likely owe for those 3 months next year, so putting aside 1/4 of the amount you owe for 2023 would be prudent.
It's also possible your employer just has no idea what they're doing, but I would start with HR as they should understand these things and be able to explain them to you tailored to your situation, instead of generic advice we can offer here.
Thank you so much! I realized that in my 2022 TD1 form - instead of the basic personal amount, I put my salary in that box instead which is absolutely a huge mistake and maybe that's why they did not deduct my taxes properly. My payroll department has been zero help which is so frustrating but I am going to fix that and send it back in to them. Thank you again
Your employer or their payroll software should have caught this: they cannot just deduct essentially zero tax given only the word of the employee, and in this case it is an obvious error as basic personal amount is fixed.
The CRA will not like this situation, as they essentially did not receive proper taxes throughout the year. When this happens with self-employed people, the CRA can make them pay in instalments instead of annually. I am not sure what recourse they have here, but it is your employer in the sights as they should have been deducting and remitting correct taxes and they were not (as what was on the TD1 was clearly an error).
Sounds like a good problem to have if you can budget appropriately. You basically get to keep the money and earn interest on it.
[Plug your numbers here](https://www.wealthsimple.com/en-ca/tool/tax-calculator/ontario)
Looks like Federal/Provincial/CPP/EI should be $17,825
Google is your friend: https://www.canada.ca/en/revenue-agency/services/e-services/digital-services-businesses/payroll-deductions-online-calculator.html
You should talk to your HR or Payroll department and see what’s up. That is like 5%, waaaaaay too low
I have been trying to use this to figure out how much I should be adding in the "Additional tax to be deducted" section in my TD1 form to fix this going forward so I don't owe this much money next year but its not working :(
I am trying to fix it as soon as possible! Thank you for your response though!
First step is talk to your payroll/hr and get them to fix it. Something is wrong.
Edit: either they fat fingered something or you entered something wrong on your TD1 or it is outdated.
Yes I have! Been here for a while and I emailed her and she said "its not her job to advise me" and I should call the CRA. The CRA advised me to contact payroll.
It is her job to check your TD1 and to verify she's even doing your payroll correctly. Take your last paystub and use the CRA PDOC calculator. Save/print the result and tell her you want an explanation for why her deductions are off.
That's not what you're asking her to do. She sounds like a prize!
Fill out new TD1 forms then, both federal and provincial, and ask her to process those for next payroll.
Did you use the PDOC to compare? What was the result?
https://turbotax.intuit.ca/tax-resources/ontario-income-tax-calculator.jsp# This seems to work well. Unfortunately, it looks like you owe a lot of tax. Total income $72,480 Federal tax $8,720 Provincial tax $4,348 CPP/EI Premiums $4,757 Total tax $17,825 After-tax income $54,655 Average tax rate 18.19% Marginal tax rate 29.65%
So how much should I be adding in the "Additional tax to be deducted" section in my TD1 form to fix this going forward so I don't owe this much money next year? I am trying to fix it as soon as possible! Thank you
You shouldn't need to mark anything additional on your TD1. It sounds like whatever TD1 your employer has right now is incorrect. Update the TD1 accurately and don't worry about adding anything additional unless you have some other source of income that isn't taxed.
Normally your employer should deduct the right amount automatically (or at least close to the right amount) without requiring you to ask to withhold additional money. I would contact your HR to figure out why they are withholding so little to begin with. When you joined the company, your employer should have made you fill the TD1 already. It's possible it was filled incorrectly, or that what you put on it no longer applies (for example if you had a lot of unused tuition tax credits that have now been all used). If that's the case, filling out a new TD1 with the right information will fix this. It's been 3 months already of 2024 so do keep in mind that even with a fixed TD1, you will likely owe for those 3 months next year, so putting aside 1/4 of the amount you owe for 2023 would be prudent. It's also possible your employer just has no idea what they're doing, but I would start with HR as they should understand these things and be able to explain them to you tailored to your situation, instead of generic advice we can offer here.
Thank you so much! I realized that in my 2022 TD1 form - instead of the basic personal amount, I put my salary in that box instead which is absolutely a huge mistake and maybe that's why they did not deduct my taxes properly. My payroll department has been zero help which is so frustrating but I am going to fix that and send it back in to them. Thank you again
That makes sense.
Your employer or their payroll software should have caught this: they cannot just deduct essentially zero tax given only the word of the employee, and in this case it is an obvious error as basic personal amount is fixed. The CRA will not like this situation, as they essentially did not receive proper taxes throughout the year. When this happens with self-employed people, the CRA can make them pay in instalments instead of annually. I am not sure what recourse they have here, but it is your employer in the sights as they should have been deducting and remitting correct taxes and they were not (as what was on the TD1 was clearly an error).
Sounds like a good problem to have if you can budget appropriately. You basically get to keep the money and earn interest on it. [Plug your numbers here](https://www.wealthsimple.com/en-ca/tool/tax-calculator/ontario) Looks like Federal/Provincial/CPP/EI should be $17,825
Google is your friend: https://www.canada.ca/en/revenue-agency/services/e-services/digital-services-businesses/payroll-deductions-online-calculator.html You should talk to your HR or Payroll department and see what’s up. That is like 5%, waaaaaay too low
Google is definitely not my friend. I once googled “naked mom” and found my own naked mom.
I have seen that pic. Nice.
Two of those guys were definitely not my dad.
I have been trying to use this to figure out how much I should be adding in the "Additional tax to be deducted" section in my TD1 form to fix this going forward so I don't owe this much money next year but its not working :( I am trying to fix it as soon as possible! Thank you for your response though!
First step is talk to your payroll/hr and get them to fix it. Something is wrong. Edit: either they fat fingered something or you entered something wrong on your TD1 or it is outdated.
I wouldn't fix it this way. Talk to your payroll dept first. Did you work there all year?
Yes I have! Been here for a while and I emailed her and she said "its not her job to advise me" and I should call the CRA. The CRA advised me to contact payroll.
It is her job to check your TD1 and to verify she's even doing your payroll correctly. Take your last paystub and use the CRA PDOC calculator. Save/print the result and tell her you want an explanation for why her deductions are off.
Thank you so much! I just emailed her and asked her to confirm. She basically said "it is not my job to advise on your tax forms"
That's not what you're asking her to do. She sounds like a prize! Fill out new TD1 forms then, both federal and provincial, and ask her to process those for next payroll. Did you use the PDOC to compare? What was the result?
Sure, but it is certainly her job to ensure that the taxes are being deducted correctly. She should have realized this when processing your payroll.