The Tax tab (TD1 and tax settings)

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What this does

The Tax tab holds what the employee told you on the TD1 forms and the settings that change how tax and contributions are worked out.

Open the employee and choose the Tax tab.
Choose Update from a TD1 for a guided entry. It asks what the employee wrote on line 13 of the federal TD1, then the provincial form, then whether they want extra tax each pay. Choose Apply.
Or fill the boxes yourself under Federal TD1 and Provincial TD1. Choose Basic personal amount, Total claim amount, or Claim $0 (another employer claims it). For Quebec the form is Quebec TP-1015.3-V.
Enter TD1 signed on.

Additional tax per pay. Extra tax the employee asked for.
Exempt from CPP / QPP, Exempt from EI, Exempt from QPIP.
Uses Quebec plans (QPP, QPIP). Turn on for an employee under the Quebec plans.
Non-resident of Canada.
Northern residents deduction. The yearly amount from the TD1.
Dependants under 19 and Dependants with a disability. Used for the Ontario tax reduction.
Not subject to federal, provincial or Quebec income tax. Pick this only with a reason. The reason is kept in the audit log and shown on the earnings review. Keep the authority's letter on file.
CPP contributions stopped (CPT30) and CPP contributions restarted. Use the dates when an employee aged 65 to 70 elects to stop CPP.
Dental benefits (T4 box 45). Pick a code from 1 to 5, or Company default. The code is printed on the T4 and filed in the XML.
Income tax method. Option 1 taxes each pay on its own. Option 2 averages tax over the year for uneven pay such as commissions.

The claim amounts are the amounts the employee wrote on the form. Update them when a new form is signed.
Switch to Option 2 at the start of a year. A mid-year switch averages from January.
The default dental code is in Settings › Company.
If the employee moves into or out of Quebec, see The Employment tab.