Employment Income

Plain meaning

Income a person receives from an employer for work performed as an employee, usually reported on a T4 slip.

Also called

Key points

• Employment income generally includes salary, wages, commissions, bonuses, tips, taxable benefits, and similar amounts connected to employment.
• Employers usually withhold income tax, CPP contributions, and EI premiums and report annual amounts on a T4 slip.
• Some employer-provided benefits are taxable and must be included in employment income.
• Employees may deduct only specific employment expenses allowed by the Income Tax Act and CRA rules.
• Employment income is different from business or self-employment income because the taxpayer is working as an employee rather than carrying on business on their own account.

Why it comes up

Employment income is the starting point for many personal tax returns and affects CPP, EI, source deductions, credits, and benefit eligibility.