Ontario Payroll Instructions

Ontario uses a 'step' table for income tax withholding calculations. The tax table calculates different rates for each range of payroll wages. Tax withholding formulas are indexed for inflation, so they changed in 2023, as they do every year.

Click here for Canada Federal withholding instructions.

Click here for help with importing the latest withholding tax tables into Goldenseal payroll software.

Click here for more about Goldenseal payroll software.

NOTE: TurtleSoft provides free tax updates each year for Canadian federal and Ontario withholding tax rates.

Employee Dependents

In order to calculate the provincial taxes correctly for your employees, you must enter into each employee’s account the sum of the number of dependents under age 18 and the number of dependents with disabilities. Enter this value in the Local Exemptions field in each employee ’s account.

Ontario Provincial LCP

The LCP program has been restored, although most employees probably will not use it.

If your employees take a credit for the Ontario labour-sponsored funds tax credit (LCP), create a tax item for their credit amount. To do so, follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Tax Items.
  2. Click the New button.
  3. Call the Tax Item "Ontario LCP" plus the employee's name.
  4. Enter Direct Dollars into the Calculation Method popup field.
  5. Type in the amount of the credit-- take the lesser of $750 or 15% of the purchase value of approved venture capital corporation stock, and divide by the number of pay periods.
  6. Click on the Tax Type popup field and choose Employee Credit.
  7. Click OK.

You'll also need to assign the LCP credit to the employee. follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Tax Packages.
  2. Click the New button.
  3. Put a checkmark next to each tax and credit that applies to this employee (including the LCP).
  4. Click OK.
  5. Open the Payroll tab on the left, and choose Employees.
  6. Use the Find command to
  7. Click the Payroll Setup button.
  8. Click in the Tax Package field and enter the tax package that you just created.
  9. Click OK.

If several employees use different amounts for LCP, each one will require a separate Tax Item record with the correct amount, and a tax package that includes their deduction.

HINT: Use the Duplicate button in the Tax Item List window to make a copy of the original and edit the amount. Then, create tax packages for each employee (use the Duplicate command) and select the appropriate LCP Tax Item that you created for that employee.

Payroll Links

Revenue Canada Website

Goldenseal Payroll Software Info

Canada Payroll Withholding

Free 2023 Payroll Tax Table Updates

Province Links

Alberta | British Columbia | Manitoba | New Brunswick | Newfoundland | Northwest Territories | Nova Scotia | Nunavut | Ontario | Prince Edward Island | Quebec | Saskatchewan | Yukon