New CRA Guidelines: Redefining Employer Location in Remote Work Scenarios

New CRA Guidelines: Redefining Employer Location in Remote Work Scenarios

Starting January 1, 2024, the CRA's updated policy on determining employer establishment for source deductions specify that an employee is considered reporting to the employer's establishment under two conditions:

  1. In cases of a 'full-time remote work agreement,' where the employee is reasonably considered 'attached to an establishment of the employer.'
  2. When the employee physically reports to an establishment, which may include temporary sites like construction locations (excluding home offices), with no specified minimum duration for this requirement to apply.

The CRA will typically recognize a full-time remote work agreement when employees are directed or permitted to perform their job responsibilities entirely (100%) remotely, excluding any employer establishment.

The key factor in linking an employee to an employer's establishment is primarily whether the employee would have worked physically at that location in the absence of a full-time remote work agreement. In addition, employees who shifted from reporting to an employer's establishment before embracing full-time remote work are typically connected to that establishment, unless there have been substantial changes in their circumstances or job role. Additionally, the CRA presents supplementary indicators to evaluate the 'attached to an establishment of the employer' standard.

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Disclaimer: “Please note that the information provided in this article is of a general nature and may not be accurate for your specific situation. The information is current as of the date of posting and is not intended to provide legal advice. It's always recommended that you consult with a professional accountant and lawyer for personalized guidance and advice."