Guide to Global Payroll Management Example QPIP: Pay Type 1st pay Commission QPIP rate QPIP premium 2nd pay Commission QPIP rate QPIP premium Salary + Commission x $5,000.00 0.494% $ 24.70 x $3,000.00 0.494% $ 14.82 INCOME TAX Deduct taxes from commissions or commissions plus salary draw or advance in one of the following ways: commissions paid at regular intervals or with salary, draw or advance: add the commission to the salary, etc. and use the regular tax table method; if commissions are paid irregularly, you may use the bonus method of tax covered earlier in the bonus section. Sometimes, employees who are paid by commission will incur expenses (for which they are not reimbursed by the company) to earn commissions. The employee may complete a TD1X Statement of Commission Income and Expenses for Payroll Tax Deductions (TP-1015.R.13.1-V for Quebec) and submit it to the employer. NOTE: Employers should monitor these forms to ensure they have an accurate TD1X/TP-1015.R.13.1-V on file for audit purposes. TD1X―STATEMENT OF COMMISSION INCOME AND EXPENSES FOR PAYROLL TAX DEDUCTIONS The TD1X asks in the area titled "Calculation of your estimated annual net commission earnings" to either estimate the commission the employee expects to earn in the current year or employees can use the previous year's actual commissions. Employees also enter any salary or wages they will receive. The two amounts are totaled and any expenses incurred are subtracted. The result is the employee's estimated annual net commission income, a figure used behind the scenes in programing calculations. Once an employee completes and signs the form it is submitted to the employer. The employer determines separate federal and provincial tax amounts to deduct from employee's commissions and salary (if applicable). Even though separate federal and provincial tax calculations are being made, both amounts are combined for reporting and withholding purposes (excluding Quebec provincial tax). Employers with commissioned employees who choose to complete the TD1X form will have the following choices for calculating tax withholdings: 11-72 © The Canadian Payroll Association/L'Association canadienne de la paie 2020