Cross-Border Payroll 2026: Master the 45-Day and 90-Day Tests Before the CRA Does

Many foreign employers assume Canadian payroll rules don’t apply when their own employees travel to Canada for a few weeks of work. They do. Any employee who physically performs services in Canada, including one who quietly works remotely from a family home in Canada, can trigger Canadian withholding, remittance and reporting obligations for the employer. In this course, a tax director specializing in international inbound and outbound tax at a Toronto accounting firm explains how the rules work and how to keep cross-border employers compliant.

The session starts with how section 153 of the Income Tax Act and Regulation 102 work together. Section 153 creates the obligation to withhold, and Regulation 102 sets out how the withholding is calculated. It then covers the two main ways to get relief. The first is the non-resident employer certification (Form RC473), a blanket waiver for qualifying treaty-resident employers that covers all of their qualifying employees for up to two calendar years. The second is the Regulation 102 waiver, which is approved one employee at a time and is often used when an employee no longer qualifies under the certification. You’ll learn who qualifies, how and where to apply, why it’s wise to allow 30 to 90 days on top of the time needed to set up a business number and payroll account, and why withholding must continue until approval actually arrives.

The heart of the course is applying these rules in practice. The speaker explains the difference between the 45-working-day test and the 90-day presence test, and why personal visits count toward the 90 days. He also covers what to do the moment an employee stops qualifying, and how proactive monitoring can earn retroactive relief from withholding, penalties and interest. Two worked examples show employees moving in and out of qualifying status across calendar years. The session also covers CPP and certificates of coverage under the Canada–US social security agreement, EI exemptions, provincial employer health tax, Quebec’s separate rules, taxable benefits and the practical problems with remittances. It ends with the risk that a permanent establishment removes treaty relief for every employee, the penalty and director-liability consequences of getting it wrong, T4 and T1 filing requirements, and a decision tree that ties it all together.

Topics covered

• Section 153 of the Income Tax Act and Regulation 102: obligation versus calculation
• When payroll withholding applies to non-resident employees
• Employees versus contractors (Regulation 105, briefly)
• Employer and employee obligations
• Non-resident employer certification (RC473): eligibility, application and timing
• Qualifying non-resident employers, including US LLCs and partnerships
• Qualifying non-resident employees: treaty residence, treaty exemption and the 45/90-day tests
• Regulation 102 waivers: employee-by-employee relief, requirements and filing
• The dependent personal services article of the Canada–US treaty: the $10,000 and 183-day tests
• How a permanent establishment affects treaty relief
• Quebec payroll withholding and its separate waiver
• Tracking working days and presence days
• Notifying the CRA when an employee stops qualifying, and retroactive relief
• Worked examples: qualifying and non-qualifying employees
• CPP and certificates of coverage under the Canada–US totalization agreement
• EI exemptions for foreign coverage
• Provincial employer health tax and similar payroll taxes
• Employer compliance: payroll accounts, apportioning income, remittances and T4 reporting
• Double withholding, foreign tax credits and employee reimbursements
• Taxable benefits and Canadian allowance limits
• Penalties, interest and director liability
• T4 exceptions and non-resident T1 filing
• A summary decision tree