T1213 — Get CRA to Reduce Your Payroll Tax Now Instead of Waiting for a Refund

Do I Qualify?

• You are an employee with tax withheld from your paycheques
• You consistently receive a tax refund each year (meaning your employer is withholding more than you actually owe)
• You have predictable deductions not automatically captured by payroll (e.g., RRSP contributions made outside a group plan, child care expenses, investment interest, spousal support payments, or employment expenses)
• You can reasonably estimate the annual amount of those deductions

Overview

Every time your employer pays you, they withhold income tax based on your gross pay and basic personal amount — with no adjustment for deductions you’ll claim at tax time. If you contribute to an RRSP, pay child care, deduct investment interest, or carry other predictable deductions, your employer withholds more tax than you actually owe. You get it back as a refund — months later, without interest.

Form T1213 lets you ask CRA to authorize your employer to withhold less each paycheque. If approved, your take-home pay increases immediately and the refund you’d otherwise wait for arrives in each paycheque throughout the year.

There is no fee, no penalty for applying, and no downside if CRA approves exactly what you request. The only risk is under-requesting — if you overestimate deductions, you may owe a small amount at filing.

Who Should Use This

Form T1213 is most valuable when you have predictable, recurring deductions that are not automatically factored into payroll withholding:

• RRSP contributions you make independently (not through a group RRSP payroll plan)
• Child care expenses you pay out of pocket
• Spousal or child support payments you make under a court order or written agreement
• Investment interest on loans used to earn investment income
• Employment expenses your employer has certified on Form T2200
• Carrying charges such as management fees or safety deposit box fees
• Union dues or professional fees not deducted by your employer
• Rental losses from investment properties
• Charitable donations that consistently exceed the basic withholding

It is also useful if you work two jobs and each employer withholds tax assuming that job is your only income — resulting in significant over-withholding on combined income.

How to Apply

1. Write a letter to your local CRA tax centre (or complete Form T1213 directly from the CRA website)
2. Identify your name, SIN, employer name, and tax year the reduction applies to
3. List each deduction with your estimated annual amount and the authority (e.g., “RRSP contributions — estimated $18,000 — ITA s.146”)
4. Sign and mail or fax to your CRA Tax Centre (based on your province of residence)
5. CRA reviews and — if approved — sends a letter of authority to you
6. Provide the letter to your employer’s payroll department
7. Your employer adjusts withholding from that point forward

Timing: Apply early in the year (January–February) to benefit for the full tax year. CRA typically processes T1213 requests within 4–6 weeks. You can apply for the current year and subsequent years in one request.

How Much Will Your Paycheques Increase?

Your additional take-home pay per paycheque equals:

(Total approved deductions × Marginal tax rate) ÷ Pay periods

Example: You contribute $15,000/year to an RRSP and pay $8,000/year in child care expenses. Total deductions: $23,000. At a 40% marginal rate, you’d normally receive a $9,200 refund. With T1213 approved, you receive an extra $354/biweekly paycheque instead — starting immediately.

What CRA Will and Won’t Approve

CRA will approve deductions that are:

• Clearly established in the Income Tax Act
• Reasonably predictable in amount
• Not already reflected in your payroll (e.g., if your employer already deducts RRSP contributions through a group plan, they’re already factored in)

CRA is more cautious with speculative estimates. Stick to amounts you are confident you will actually incur. If you claim $20,000 in RRSP contributions but only contribute $12,000, you’ll owe tax at filing.

What Most People Miss

• You must reapply each year. CRA approval is for one tax year at a time. Reapply in January each year (or request that CRA apply approval for multiple future years).
• This works for multiple employers. If you have two employers, you can request a reduction from each — but you must be careful not to double-count deductions across both requests.
• You do not need to wait for tax season. T1213 can be submitted any time during the year, though mid-year applications only benefit the remaining pay periods.
• You don’t need to use the official form. CRA accepts a plain letter as long as it includes your SIN, employer name, the deductions, and your signature.
• T1213 does not change your tax owing. It only adjusts timing. Your final tax calculation at filing is identical — you’re just receiving the money earlier instead of as a lump-sum refund.

Frequently Asked Questions

Sources

• CRA — Form T1213, Request to Reduce Tax Deductions at Source
• CRA — Reducing Your Tax Deductions at Source
• Income Tax Act s.153(1.1) — Authorization to Reduce Withholding