5 Things to Know Before Working in Canada
Canada is a booming film hub! If you’re an actor or crew member who is new to working outside of the US and headed on a plane to Vancouver or Toronto for a job, you’ll find it beneficial to know a few guidelines that will impact your paycheck. Don't get caught off guard when starting your next job in Canada!
1. Types of Tax Required in Canada
Employees who work less than 183 days for a US-based company in industries outside of Motion Picture, Television, and Streaming, are not required to pay additional taxes. However, every country has tax rules based on the type of work being done and the incentives involved, and those laws negate the tax treaty. Canada requires Film Incentive withholding for anyone who works in Canada on a production:
- Actors are taxed at a flat 23%.
- Production Crew are taxed at a flat 15% with opportunity to waive these taxes (see below in the Tax Waiver section).
- Individuals pay 10% on their first $5,000.00 earned.
- Loan-out crew persons pay a flat 15% on all earnings.
- Québec Provincial tax is an additional flat 9% (Actors AND behind-the-scenes crew can BOTH apply for a waiver for work performed in Québec).
- Unlike the US, taxes in Canada are withheld for BOTH individuals, and individuals being paid as loan-out corporations. In order for the owner of the loan-out to take a foreign tax credit, the loan-out must be an S Corporation, and not a C Corporation.
- Box rentals are taxed at a flat 10%. Tax waivers never include box rentals.
2. Tax Waivers
Crew members are eligible to apply to the Canada Revenue Agency (CRA) for a waiver of withholding. If approved, no Canadian source withholding will occur with the following stipulations:
- During the time frame stated on the waiver
- For the specific services stated on the waiver
- For the specific show being worked on and stated on the waiver
Directors and Producers working in Canada will need a tax waiver which states that both Director Services AND Producer Services have been approved for the waiver. Since waiver processing can take a few weeks, it’s best to apply as soon as possible. If a waiver gets approved after an employee is paid, it may not be retroactively applied to those payments, even if it was for work completed within the waiver time period.
If a waiver is expected for an employee, a production could hold payments to that employee in order to take advantage of the waiver, however, because withholding wage payments will subject the production to labor law penalties, EP does not advise ‘holding’ wage payments.
3. Per Diem and Lodging
Unlike US production where the per diem includes a combined payout that covers meals, lodging, and incidentals (i.e., laundry, etc), Canada does not provide as extensive of a “living allowance.”
Food and/or Lodging needs to be itemized on the time card
Employees must break out the types of per diem on their time card and report any of these types of allowances to their paymaster. Per diem in Canada is reserved for meals only, and lodging is for lodging accommodations only. As long as the payment to the employee is under the Canadian allowance (listed below), no receipts are required or proof of how the allowance was spent. Anything over these allowances will be taxed at the usual rates.
Know the allotted allowance
Canada has its own rules regarding the payment of per diem for meal allowances. EP is required to withhold tax on any portion of the per diem payment beyond what is allowable. The Canadian allowable amounts are different from the US OCONUS (Outside Continental US) allowances. For more information about the OCONUS allowances for Canada, you can find them here on the US Department of State website.
Per diem is given only for days worked
As long as a production submits time cards with the correct number of work days indicated, EP’s payroll system is programmed to automatically handle the Canadian per diem and lodging tax calculations. If per diem is being paid for a period different from the number of work days on the same check, the production needs to notify the paymaster of this, and the paymaster can manually correct the system calculation.
4. Canadian Per Diem Allowances
Per Diem (meals)
Crew — $45.00 per day is allowable for meals for production crew.
Actors — $100.00 per day is allowable for meals for actors.
Lodging (Hotel or House/apartment rent)
Crew — $100.00 per day is allowable for lodging for production crew.
Actors — Actors do not get any special lodging allowance.
5. Withholding US Taxes
EP US will withhold the proper amount of Canadian tax for their clients working abroad, since they will get a foreign tax credit on their personal return, while simultaneously stopping withholding Federal Taxation and all other US employment related taxes.
For clients working in Canada longer than 183 days in one calendar year, then they must, from day one, be paid by EP Canada with full Canadian employment related taxation. After 183 days, they will have no treaty coverage. For clients who work on two separate projects that exceed 183 days, and who also received a waiver for both projects, Revenue Canada will expect taxes on the full amount that was earned in a year. For this reason, EP recommends that actors and crew members not apply for a waiver for their second project.
For additional questions relating to working on productions in Canada, EP is here to help you navigate through it all. Connect with one of our experts today. Safe travels!