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How to Reduce Tax Deductions from your Paycheck

Posted on November 10, 2019 in personal finance

How to Reduce Tax Deductions from your Paycheck

For most of the people who are employed, Your company deducts tax from your every paycheck and remit it to Canada Revenue Agency (CRA). Next year you submit proofs for your contributions to RRSP, Tuitions, Medical expenses to get refund. It used to be my favorite part of the year when I get lumpsum amount from CRA. Later I realized I am just giving out interest free loan to Government and collect it back after a year.

When I was looked up for information on How I can reduce Tax deducted at source, I found the form T1213-fill-19e.pdf . This is the form you fill out to request CRA to reduce tax deducted from your paycheck.

This is a 3 step process

  1. Setup a pre-authorized payment plan for your RRSP. You can easily set pre-authorized deposit in your brokerage like Questrade/Wealthsimple.
  2. Fill out T1213-fill-19e.pdf and send it to CRA
  3. Once CRA sends you a approval letter, Give it to your payroll department of your company.

Doing this will not only reduce your tax deducted at source. But also setup financial discipline to contribute regularly to build up your nest egg .

Note: Make sure you know your RRSP limit. The limit is 18% of your last year's earned income in Canada or $26,230 (whichever is lower) plus any unused contribution you have from previous years. For Example, If your limit is $6000, You can setup to contribute upto $500 monthly. Take a print out of this page after you submit.

How to fill T1213-fill-19e.pdf

T1213 form has 3 sections

  1. Your personal information such as Name, SIN, address and contact information.

  2. Your employer Name, Payroll/HR person contact name and number.

  3. Information on your contributions and other deductible expenses such as Tuition fee, Medical expenses, Child care/Support payments.

    Check Salary option on Request to reduce tax section. Enter 12 x your monthly contributions against RRSP. Enter your other expenses against respective fields.

Sign and send this form with print out of your pre-authorized deposits page to CRA

CRA recommends you to send this form in November month so that you get Approval letter from CRA before begining of next year

Address to send this form to CRA

If you reside in:Send your request to:
Newfoundland and Labrador
New Brunswick
Nova Scotia
Prince Edward Island
Nova Scotia TSO
Post Office Box 638, Station Central
Halifax NS B3J 2T5
Fax: 902-450-8558
QuebecJonquiere TC
2251 Rene-Levesque Boulevard
Jonquiere QC G7S 5J1
Fax: 418-699-0203
Ontario
Nunavut
London-Windsor TSO
451 Talbot Street
London ON N6A 5E5
Fax: 519-645-4029
Manitoba
Saskatchewan
Alberta
Northwest Territories
Saskatchewan TSO
340 3rd Avenue North
Saskatoon SK S7K 0A8
Fax: 306-652-3211
British Columbia
Yukon
Fraser Valley TSO
9737 King George Boulevard
Post Office Box 9070, Station Main
Surrey BC V3T 5W6
Fax: 604-586-6442