Your pension is considered taxable income. Therefore, the Canada Revenue Agency (CRA) requires tax to be deducted from monthly pension payments, if over a certain amount, (which may change on a yearly basis).
Canadian Residents – Tax Deductions and T4A slips
The tax amount deducted from your monthly pension payment, if any, is based on:
- your LPF monthly pension payment; and
- your federal and provincial income tax forms (TD1s)
- any additional tax amount you’ve asked us to withhold.
As part of your retirement package, we ask you to complete a Federal and Provincial TD1 form, if your monthly pension is above the minimum taxable amount at source. Please click here to download the applicable TD1 forms from the Canada Revenue Agency website.
However, depending on your overall annual income, you may want to have additional taxes deducted from your pension.
If you receive a LPF pension (retirement, survivor or disability pension, either monthly or a Lump Sum payment), you will receive a T4A Slip by the end of February each year. The T4A Slip will be mailed to your home address.
The tax slip is your official proof of income for tax purposes. This form shows the total amount of pension paid to you during the previous calendar year and the total tax deducted, if applicable.
Be sure to keep us informed of any change of address. If we do not have a current address for you and your T4A Slip is returned to the LPF office by Canada Post, your pension payments will be suspended until you contact our office and send your change of address to our office in writing. Please click here to find out what you need to do if you need to notify LPF of your change of address.
Non-Residents – Taxes and NR4 slips
Canadian tax law may require that we withhold tax from your pension payments if you live outside Canada. The tax rates vary depending on whether your country of residence has a tax treaty with Canada. Along with your first LPF pension payment, or upon receipt of your notification that you became a Non-Resident (NR) of Canada, the LPF office will mail you an NR5 – Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to be Withheld form for you to request a reduction in the amount of non-resident tax to be withheld.
You may also download the NR5 Application Form and mail it directly to the International Tax Services address indicated on the form.
After CRA receives your NR5 Form, they will notify the LPF office of any changes to be applied to your Non-Resident taxes during a specified period of time. You must renew your NR5 application before the period expires.
As a Non-Resident of Canada, we will mail you an NR4 slip by the end of February each year. The NR4 slip shows the total amount of pension paid to you during the previous year and the total Non-Resident tax deducted.
Please let us know immediately if your address changes or if you cease to be a Non-Resident of Canada. See Address Changes to find out what you need to do.
If your NR4 slip is returned by the post office, your pension payments will be suspended until you contact the Pension Fund office and send your Change of Address to our office in writing.
You can visit Canadian Revenue Agency (Non Residents) site for more information. You can also visit the International Tax Office site for specific information regarding your new country of residence, or the CRA Non-resident Tax Calculator.