Employment of a member of a religious order who has taken a vow of poverty
This new content has been developed for clarity, completeness and plain language. No changes were made to the existing legislative requirement.
You may have employees who are members of a religious order who have taken a vow of perpetual poverty. This means that they have paid over to their order their entire earned income and superannuation or pension benefits.
On this page
Steps
Determine if you need to report the payment on a T4 slip
If your employee is a member of a religious order who has taken a vow of poverty, you must report their employment income on a T4 slip regardless of whether you have to withhold income tax, EI premiums or CPP contributions.
Determine which deductions you need to withhold
If your employee is a member of a religious order who has taken a vow of poverty, you must withhold the following deductions from their employment income:
- Income tax, withhold unless one of the following apply:
You pay the remuneration directly to the religious order
Your employee gives you a letter of authority from the CRA
How your employee can request a letter of authority from the CRA
Your employee can request a letter of authority by completing Form T1213 Request to Reduce Tax Deductions at Source, and sending to the CRA at the address provided on this form.
If they have not previously claimed the deduction on line 25600 of their personal income tax return, they may be asked to provide a letter from the religious order confirming that they are a member and have taken a vow of perpetual poverty.
- CPP contributions (do not withhold)
- EI premiums (do not withhold)
- Income tax, withhold unless one of the following apply:
Report the payment on a T4 slip
If your employee is a member of a religious order who has taken a vow of poverty, you must report the following on a T4 slip:
- Box 14 - Employment income
- Box 28 - Exempt, both CPP/QPP and EI must be checked
- Any applicable codes for taxable benefits
Learn how to report the payment: T4 slip - Information for employers.
References
Related
IT86R- Vow of perpetual poverty (Archived)
Legislation
- ITA: 110(2)
- Charitable gifts: Deduction for income donated under a vow of perpetual poverty
- CPP: 6(2)(e)
- Excepted employment: member of a religious order who has taken a vow of perpetual poverty
- CPP: 7(1)(g)
- Regulations to include employment
- EIA: 5(6)(d)
- Regulations to exclude employment: Vow of poverty
- EIR: 6(c)
- Employment of a person as a member of a religious order included in insurable employment
- EIR: 7(b)
- Employment of a person as a member of a religious order excluded from insurable employment if the person has taken a vow of poverty