A client’s family trust is going to start paying one of the trustees a fee to manage the investments in the portfolio. Flat amount not based on portfolio size or performance. Does the trust need a payroll account and are these earnings subject to CPP / EI / withholding tax?
I called CRA and was escalated to supervisor who asked me- Do you intend to withhold CPP and EI. To which I replied, that is why I called you - to tell me if I MUST withhold CPP and EI. No help there.
Only info I can find on canada.ca is for director fees but only in the case where the director is also an employee.
I am thinking no withholding, not subject to CPP/EI and just T4A at the end of the year. Thoughts?
Stardard deductions: CPP and Income Tax should be deducted.EI may or may not be deductable based on the relation ship of trustee’s connection to the trust.
I suspect that if you are paying it to an individual it should be Employment Income. If this person has a business and submits a properly issued Invoice, then it is up to them to report.
It will be a deduction from income for the Trust, so somebody pays tax – and CRA does not want to lose control or track of that.
