Did you know that if you have more than one employer in a year, you will probably be hit with tax payable at the end of the year?
This happens because in Canada and all provinces and territories we have a yearly exemption. If we have more than one employer and do not follow the steps I am going to share, be prepared for tax payable in the following year.
The other reason is change in the tax bracket. If you make a substantial amount of income, you will probably jump to the next tax bracket resulting in more tax payable. Depending on your tax bracket it could range from $1,000 to $2,500 of tax owing. These are just some estimates; it can be much more than that.
When you fill out the TD1 and TD1 (your province) – ON form – for the second employer, make sure you:
1. Fill zero on line 13, and
2. Check the box “More than one employer or payer at the same time”
3. If you think your tax bracket may change as a result of substantial income earned, you can add “Additional tax to be deducted” (optional) – this box can be found at the bottom of page 2
When you follow these steps, you will reduce the chances of having tax payable at the end of the year.
Some employers do not even have a proper hiring package with the important forms to give their new employees to fill out. Another reason of how important it is to have a qualified Bookkeeper or Payroll Practitioner taking care of their payroll.
If you intend to work for more than one employer make sure you fill out zero so it will help reduce tax payable when you file your taxes. I have attached a link of the fillable/savable TD1 2014 form below.