Overtime pay

CPP contributions, EI premiums, and income tax

You have to deduct Canada Pension Plan (CPP) contributions, employment insurance (EI) premiums, and income tax from overtime pay.

When the overtime pay is paid in the same pay period that it is earned in, add the overtime pay to the employee's regular pay and make the deductions from the total amount in the usual way.

When the overtime pay is paid in a later pay period, treat the overtime pay as a bonus and make the deductions using the Bonuses, retroactive pay increases or irregular amounts method.

Report overtime pay on a T4 slip.