Plain meaning
Amounts withheld from payments such as salary or wages for income tax, CPP, EI, or other required payroll amounts.
Also called
payroll source deductions
Key points
- Source Deductions affects how a business reports, pays, remits, finances, or documents tax-related activity.
- The rules can depend on business structure, registration status, income type, payroll obligations, or the nature of supplies and expenses.
- Good records matter because CRA reviews often focus on invoices, slips, contracts, payroll records, and the reasonableness of claims.
- Changes can affect cash flow, pricing, owner-manager planning, audit exposure, and the timing of remittances or deductions.
Why it comes up
Source deduction errors can lead to arrears, penalties, interest, and employer compliance action. It can affect business cash flow, compliance work, pricing, payroll, remittances, deductions, or audit exposure.