TD1 Provincial Forms Explained (TD1ON, TD1BC and more)

TD1 provincial forms are the provincial or territorial versions of the federal TD1 Personal Tax Credits Return. The TD1 Ontario form, for example, tells an Ontario employer how much provincial income tax to withhold, while the TD1BC does the same in British Columbia. Employees complete them so payroll deductions reflect provincial tax credits, not just federal ones. This guide explains how the federal and provincial forms work together for the payroll year.

What a Provincial TD1 Form Does

When you hire someone, payroll deductions are calculated from the federal TD1 plus, in most provinces, a provincial or territorial TD1. The federal form claims federal credits; the provincial form claims the credits that reduce provincial income tax. An employee who claims only the basic personal amount can often tick a box instead of filling in every line, but anyone with additional credits — a spouse or dependant, a disability, tuition, or pension income splitting — should complete the relevant lines.

Claim amounts are indexed and change over time. Do not copy figures from an old form: download the current version from the CRA each year and confirm the amounts shown on it before you run payroll.

In general, a provincial TD1 covers the same categories as the federal form, including:

• the provincial basic personal amount;
• spouse, common-law partner and dependant credits;
• age, disability and caregiver amounts;
• pension income, tuition and other credits specific to that jurisdiction.

Which Provinces and Territories Have Their Own Form

The CRA publishes the federal TD1 and a separate return for each province and territory. Quebec is the exception: it administers its own income tax, so employees there complete the federal TD1 and a separate provincial source deductions return filed with Revenu Québec.

Form labels are consistent across the country, but always confirm the current name and version on canada.ca before you rely on one.

TD1ON: The Ontario Form

The TD1 form Ontario employees complete is the TD1ON, Ontario Personal Tax Credits Return. It mirrors the federal structure: personal information at the top, a series of credit lines, and a total claim amount your payroll process uses to calculate provincial tax. Ontario adds a section that allows the employer to calculate the Ontario Health Premium where it applies, based on the employee's taxable income — check the current form for the income ranges.

Practical points for a sole proprietor hiring in Ontario:

• Give each new employee the federal TD1 and the TD1ON, plus the worksheets, if they have credits to claim.
• Ask for a new TD1ON when an employee's situation changes, such as marriage, a new dependant or an approved disability claim, and when the CRA issues a revised form.
• Keep completed forms with your payroll records so you can support the deductions you remit.

TD1BC and Other Provincial Forms

The TD1BC works the same way for British Columbia, and a TD1 provincial version exists for every other province and territory except Quebec. The credit lines differ slightly because each jurisdiction has its own rules: some offer credits with no federal equivalent, and some phase out or cap amounts at different income levels. That is why an employee who moves provinces, or works in one province while living in another, may need to complete a different form. The province of employment generally determines which provincial form applies, but there are special situations, so confirm the current rule with the CRA or your accountant.

How Sole Proprietors Use TD1 Forms

As a sole proprietor with employees, you are the employer, and the forms are part of your payroll setup. The usual flow is:

1. Ask each new hire to complete the federal TD1 and, where applicable, the provincial TD1.
2. Register for a CRA payroll account (a Business Number with an RP program account) before your first remittance; confirm current timelines on canada.ca.
3. Calculate CPP, EI and income tax using CRA payroll deduction tables or payroll software.
4. Remit deductions and issue T4 slips by the deadlines the CRA publishes each year.

The federal TD1 form explained guide covers the federal side in more detail, and Payroll Deductions in Canada walks through CPP, EI and income tax. If you are still deciding whether to hire, start with How to Hire Employees in Canada.

Contractors are different. A genuine independent contractor does not complete a TD1, and you generally do not withhold CPP, EI or income tax on their fees, although exceptions exist. Review Independent Contractor vs Employee in Canada before you classify a worker.

Common Mistakes and Recordkeeping

Most errors come from using the wrong or outdated form. Watch for these:

• Entering federal claim amounts on the provincial form, or the reverse.
• Assuming one TD1 covers every job — each employer needs its own completed form.
• Ignoring life changes, which can leave an employee under- or over-withheld at tax time.
• Discarding completed forms instead of filing them with payroll records.

Keep TD1 forms, T4 slips and payroll summaries for the retention period the CRA requires; the business records retention guide explains how that fits with your other bookkeeping obligations. When in doubt, check the form instructions or ask your accountant — this article is general information, not tax advice.