The Canada Revenue Agency has released the 2026 Payroll Deductions Formulas guide (T4127), effective July 1, 2026. This guide helps Ontario employers calculate CPP, EI, and income tax deductions for their payroll. Employers must use this updated guide starting July 1 to ensure calculations align with current CRA requirements.
Owners must apply the T4127 formulas to their payroll processing to avoid CRA penalties. The guide allows you to see exactly how every number is calculated, trace every deduction, and check it yourself. Using the correct formulas ensures remittance on time, which you can confirm, and helps manage personal director’s liability for unremitted source deductions. For assistance, call Business Enquiries at 1-800-959-5525.