Earlier in September, the Canada Revenue Agency (CRA) introduced a new administrative policy regarding the determination of the province of employment for remote employees who do not physically report to their employer's workplace. This policy will take effect on January 1, 2024.

Previously, the province of employment for remote employees was based on the location of the employer's business and where the employee's salary was paid, with no consideration for the employee's residence or the location of third-party payroll processing.

The new policy aims to simplify this determination without impacting provincial tax or benefits administration.

The primary indicator for determining a remote employee's province of employment is whether they would physically go to the employer's establishment to perform their job duties if not for the remote work arrangement. For employees who previously reported to an employer's establishment in person, that establishment is considered their province of employment unless circumstances or duties have changed.

Secondary indicators include the establishment where the employee attends or would attend virtual meetings, receives work-related materials, receives instructions, is supervised, or would report based on their duties. All indicators should be considered together to make a reasonable determination.

To be deemed "reasonable" by the CRA, this determination must be supported by the employee's specific employment situation and cannot be used to evade source deductions or employer contributions.

If an employee can be reasonably considered attached to multiple employer establishments, the same indicators should be used to determine the primary establishment.


An employer's establishment doesn't have to be a permanent physical location and can include owned, leased, or rented places in Canada from which employees work or are paid.

Canada Revenue Agency


Employers must withhold the appropriate Canada Pension Plan (CPP), Employment Insurance (EI), and income tax based on the correct province of employment determination. Consequently, employers must review employment contracts, obtain new TD1 forms, use the correct payroll deduction tables, and pay health tax premiums and levies if applicable.

Determine your employees' province of employment using the CRA’s interactive tool!

For more information, visit NPI’s publication here.


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