How do I find out what are the min and max withholdings from each paycheque?

Question

Gill, Madura. Personal Finance, 4th Canadian Edition 2019. p 86. Emboldenings are mine.

Taxes Paid on Earned Income

Your income is subject to personal income taxes, which are taxes imposed on income you earn. Personal income taxes are generally paid as income is earned during the year in a process called withholding. In other words, taxes are withheld (from each paycheque) as income is earned throughout the year. Employees files a form, called a TD1, with their employer, which helps the employer calculate the amount of taxes to withhold. You will complete this form when you start your first job. TD1 allows you to specify the personal tax credits for which you qualify. People who qualify for more personal tax credits will have less income tax deducted from their paycheques by their employer. It is important to update this form whenever your personal circumstances change, such as when you get married or have a baby. Otherwise, your employer may deduct too little or too much income tax from your paycheque. Individuals can opt to withhold more than [1.] the minimum amount from each paycheque, but are not allowed to reduce the [2.] amount of withholding below the amount specified by the CRA. Tax money that is withheld is forwarded by your employer to the federal government and held in an account that is credited to you. Self-employed

p. 87

individuals must estimate the amount of taxes payable based on projected earnings and pay estimated tax instalments quarterly. For any year that you earn income, you must file a tax return that consists of a completed T1 General Income Tax and Benefit Return (T1 General), plus supporting documents. Your tax return will show whether a sufficient amount of taxes was already withheld from your paycheque, whether you still owe taxes, or whether the government owes you a refund. If you still owe taxes, you should include a cheque for the taxes owed along with your completed T1 General.

Where can I find the

1. minimum amount that I can withhold from each paycheque?

2. maximum "specified by the CRA" that I can withhold from each paycheque?

Answer 1

There is a formula to see how much to withhold from each of your cheques. It's basically "how much tax you're likely to pay, divided by number of paycheques a year." When you fill out the TD1 you basically go through the math required. There is an online calculator you could use to work out this number also.

So, imagine this calculation gives $500 a paycheque should be taken off. Some people know that this will result in their owing tax. (For example, if you have two employers and they both account for your personal deduction: you don't get that deduction twice, so not not enough tax will be sent in for you.) In that case you can request of your employer "please take $600 a month off from me and send it to the government, so I don't have to come up with a large lump at tax time." This is what "Individuals can opt to withhold more than the minimum amount from each paycheque" means.

However, you can't request of your employer "actually, please only take $400 off me, I know I will be getting a large refund." This is what "are not allowed to reduce the amount of withholding below the amount specified by the CRA" means.

There is no minimum and maximum the way you're asking. Your employer (using forms and formulae provided by the CRA) will calculate a withholding amount. You can ask to increase it, but not to decrease it.