Accepted Answer

Hello galaviz,

If you are an employee and you receive commission income or a combination of commission income and salary or wages, and
you want your employer to adjust your tax deductions taking into account your commission expenses and your average yearly income, you can complete Form TD1X for your employer, rather than Form TD1.

When you complete this form, you basically make an estimate of what your entire net income from commissions will be for the year, and you are then taxed based on that amount averaged out over 12 months.

There may have been some employers who agreed to simply withhold tax from your earnings at a rate of 25%, but technically this should not have been allowed. However, if you fill out the Form TD1X, by entering your expected net commissions for the year after expenses, you should be able to achieve the same thing.

Here is a link to that form, as well as a link to the Canada Employer Payroll Guide which shows this is allowed. In the payroll guide, refer to chapter 5, the second item listed for the Form TD1X

http://www.cra-arc.gc.ca/E/pbg/tf/td1x/td1x-lp-06e.pdf

http://www.cra-arc.gc.ca/E/pub/tg/t4001/t4001-e.html#P877_94827

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you galaviz.

Expert:	Merlo
Pos. Feedback:	99.8 %
Accepts:
Answered:	9/12/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad