T4 slip/assessment sheet has less income than stated in the employer letter

[Dimma]

I work for a MNC and i am in Canada on intra- company transfer(crossed work permit) , worked in Canada for more than 1 year and planning to apply for PR under CEC.

My Canada salary shown in the employer letter is a sum of the following
- CAD conversion of my Indian Salary (I will get my full Indian salary while i am here in Canada)
- Cost for Accommodation in Canada ( I will not get Money here , Indian company leased apartment here )
- Car & Fuel ( I will not get Money here , Indian company pay for it)
- per-diem (This Money i will get here in Canada)

My T4 Slips will contain only per-diem (This Money i will get here in Canada)

During assessment my Indian company will show the Indian Salary as global income along with amount i received here (per-diem)

- I don't have pay slip in Canada

Now there is huge difference between the salary offered in employer letter and actual income in T4 or assessment sheets.

My question here is , Is it creates any problem in CEC -PR application ?
Do i need any explanation for my salary components ?
How i can deal with the situation , anybody have same experience ?

Please help , I am ready with all other paper for CEC application.

 

[jsm0085]

If your tax return includes your indian salary, which it should, and your per-diem... the difference shouldn't be great? If the Indian company are providing the accommodation and car and it isn't taxable then I'm not sure why they assigned a $ to it?

 

[godzilla]

There is a good chance of it getting rejected. I know few cases getting rejected due to this reason.

Please provide a covering letter with as much explanation as possible. Provide the reason why the allowance is part of your salary but does not appear in the T4. Best would be if you can provide some CRA regulation number or Income tax act number which can justify this.

If possible, please get these details added in the reference letter from employer also.

 

[shibinp]

I don't think first 3 you can add into the 4th one and show in the letter. If the letter is made by you and signed by the manager, better you get another letter which includes only Canada per-diem - which is the actual money you are getting from Canada. Or another option what I can think of is, show the per-diem as the Canada income and also show the other 3 as your perks or something in the reference letter.

 

[jsm0085]

I don't think first 3 you can add into the 4th one and show in the letter. If the letter is made by you and signed by the manager, better you get another letter which includes only Canada per-diem - which is the actual money you are getting from Canada. Or another option what I can think of is, show the per-diem as the Canada income and also show the other 3 as your perks or something in the reference letter.

No no no.

It's an ICT... It needs to include any renumeration paid by the Indian company - and that would also need to be declared as part of the tax return.

 

[shibinp]

No no no.

It's an ICT... It needs to include any renumeration paid by the Indian company - and that would also need to be declared as part of the tax return.

I think that salary he is getting in India not here, so he should pay income tax for that one in India not in Canada. Otherwise this income would have already been shown in his T4.

 

[jsm0085]

I think that salary he is getting in India not here, so he should pay income tax for that one in India not in Canada. Otherwise this income would have already been shown in his T4.

You're wrong. I've just dealt with the same issue last year.

1) Intra-company transferees can be paid by either their home division or the Canadian division, it doesn't matter.
2) As a resident of Canada, you are required to declare all global income when completing a tax return.
3) In order to be eligible for CEC, the employee must be under the control of the Canadian division, irrespective of where the pay comes from.
5) The T4 only reflects income given from the Canadian division, not the home division.
6) When you complete the tax return, you convert what you were paid and what tax you paid in the other country into cad using the BOC interest rates.
7) CRA deal with the rest.

 

[shibinp]

You're wrong. I've just dealt with the same issue last year.

2) As a resident of Canada, you are required to declare all global income when completing a tax return.

6) When you complete the tax return, you convert what you were paid and what tax you paid in the other country into cad using the BOC interest rates.

yes, my mistake...
I am also an ICT but I am completely on Canada payroll (Indian salary is suspended until I go back), hence didn't deal with such situation. Thank you for this new information.

 

[Dimma]

Thanks jsm0085 , My Indian company will file Indian salary as global income in Canada Tax return . Only thing missing here some allowances that directly paid by Indian company is missing in T4 or assessment sheet.

Anyway i will provide a covering stating that my Canadian salary in offer letter is sum of Indian salary + Canadian Per-diem + Cost for allowance provided in Canada.

Rest i will leave to assessment officer.

What you say ? Any other suggestion?

 

[seton]

Allowances won't be on your T4 as they're not taxable (if reasonable) and are not considered part of your income.

You can ask your employer for a T2200 (Declaration of conditions of employment) and list all allowances in the relevant sections, if you want some evidence showing the tax impact (lack thereof) of your allowances.

 

[acevee]

I work for a MNC and i am in Canada on intra- company transfer(crossed work permit) , worked in Canada for more than 1 year and planning to apply for PR under CEC.

My Canada salary shown in the employer letter is a sum of the following
- CAD conversion of my Indian Salary (I will get my full Indian salary while i am here in Canada)
- Cost for Accommodation in Canada ( I will not get Money here , Indian company leased apartment here )
- Car & Fuel ( I will not get Money here , Indian company pay for it)
- per-diem (This Money i will get here in Canada)

My T4 Slips will contain only per-diem (This Money i will get here in Canada)

During assessment my Indian company will show the Indian Salary as global income along with amount i received here (per-diem)

- I don't have pay slip in Canada

Now there is huge difference between the salary offered in employer letter and actual income in T4 or assessment sheets.

My question here is , Is it creates any problem in CEC -PR application ?
Do i need any explanation for my salary components ?
How i can deal with the situation , anybody have same experience ?

Please help , I am ready with all other paper for CEC application.

Hi, I am in similar situation as yours, what did you do to reslove it. How did you file ,please help.

 

[jes_ON]

Thanks jsm0085 , My Indian company will file Indian salary as global income in Canada Tax return . Only thing missing here some allowances that directly paid by Indian company is missing in T4 or assessment sheet.

Anyway i will provide a covering stating that my Canadian salary in offer letter is sum of Indian salary + Canadian Per-diem + Cost for allowance provided in Canada.

That will not be enough, CIC cannot simply take your word for it. All of this information MUST be in your letter of employment, at a bare minimum.

It doesn't matter if you are being paid back in India, do you have any documentation of that remuneration?

 

[Stunu]

Hi All,

I am also in the same situation. Could please help me and could any body tell what i have to do to resolve this ?

 

[ab5489]

Hello All,

Opening again a much older thread here. I am exactly at the same situation .

Dimma, what is your status now ? how about getting the PR ?