Managing payroll taxes accurately is a critical responsibility for Canadian employers. One of the most important documents involved in this process is Form TD1, Personal Tax Credits Return. If you use QuickBooks Online Payroll, entering and maintaining TD1 information correctly ensures that the right amount of income tax is deducted from each employee’s pay.
This comprehensive guide explains everything you need to know about entering Form TD1 in QuickBooks Online Payroll, including how employees can submit their own information, how employers can enter or update TD1 details, how to print TD1 forms, and answers to common TD1-related questions.
What Is Form TD1 and Why It Matters?
Form TD1 is a federal tax form used in Canada to determine how much income tax an employer should deduct from an employee’s paycheque. Employees complete this form to claim personal tax credits, such as the basic personal amount, tuition credits, or dependants.
The information provided on the TD1 directly affects payroll deductions. Incorrect or outdated TD1 data can result in under-deducted or over-deducted taxes, which may lead to issues for both employers and employees at tax time. That’s why entering TD1 details accurately in QuickBooks Online Payroll is essential.
Ways to Add TD1 Information in QuickBooks Online Payroll
QuickBooks Online Payroll offers two convenient options for adding or updating an employee’s TD1 information. You can either allow employees to enter their own tax details or enter the information manually on their behalf.
In this guide, you’ll learn how to:
- Invite employees to enter their own TD1 details
- Enter or update TD1 information directly in QuickBooks
- Print a TD1 form when needed
- Understand key TD1 rules and employer responsibilities
Option 1: Invite Employees to Enter Their Own TD1 Information
The easiest and most efficient way to collect TD1 data is by allowing employees to enter it themselves using QuickBooks Workforce.
How Employee Self-Entry Works?
When QuickBooks Workforce is enabled, you can invite new hires to complete their tax information online during onboarding. Employees can securely enter their TD1 details, reducing errors and saving you administrative time.
This option is also useful for existing employees. If they need to update their TD1 due to life changes—such as marriage, additional dependants, or multiple jobs—they can log in to QuickBooks Workforce and edit their information themselves.
Benefits of Employee-Entered TD1 Forms
- Reduces data entry errors
- Saves time for payroll administrators
- Keeps tax information up to date
- Improves compliance with CRA requirements
Once employees submit their TD1 details, QuickBooks Online Payroll automatically applies the updated tax settings to future pay runs.
Option 2: Enter an Employee’s TD1 Information in QuickBooks Online Payroll
If employees provide a completed TD1 form on paper, or if you prefer to manage payroll details internally, you can manually enter the TD1 information in QuickBooks.
Step 1: Print a TD1 Form for the Employee
Before entering TD1 data, you may need a blank form for the employee to complete.
To print a TD1 form through QuickBooks Online Payroll:
- Open QuickBooks Online Payroll
- Select the employee from your employee list
- Go to Tax withholding and choose Edit
- Under Federal withholding, select Need a blank TD1 form?
- Choose the appropriate province or territory
- Print the form and provide it to the employee
This ensures the employee completes the correct federal and provincial TD1 forms.
Step 2: Enter TD1 Information into QuickBooks
Once the employee returns the completed TD1 form, you can enter the details directly into QuickBooks Online Payroll. Follow these steps:
- Open QuickBooks Online Payroll
- Select the employee profile
- Navigate to the Tax withholding section
- Click Edit
- In the Federal withholding area, enter the information from the employee’s TD1 form
- Review the details carefully for accuracy
- Select Save to apply the changes
QuickBooks will automatically calculate payroll tax deductions based on the TD1 information you entered.
How to Print a TD1 Form for an Employee?
In addition to printing TD1 forms within QuickBooks, you can also download and print official TD1 forms directly from the Canada Revenue Agency (CRA) website. This option is helpful if you need the most current version of the form or if QuickBooks access is limited.
Always ensure you provide employees with the correct federal and provincial TD1 forms for their work location.
Best Practices for Managing TD1 Forms in QBO Payroll
To stay compliant and reduce payroll errors, follow these best practices:
- Collect TD1 forms during employee onboarding
- Encourage employees to update TD1 information when personal circumstances change
- Review TD1 details annually or at the start of each calendar year
- Keep digital or paper copies of TD1 forms for at least six years
- Use QuickBooks Workforce to streamline updates and reduce manual work
Final Thoughts
Entering and maintaining Form TD1 in QuickBooks Online Payroll doesn’t have to be complicated. Whether you allow employees to enter their own information or manage TD1 data manually, QuickBooks provides flexible tools to keep your payroll accurate and compliant.
By following the steps outlined in this guide, you can ensure proper tax deductions, minimize errors, and stay aligned with CRA requirements—giving you more time to focus on growing your business with confidence.
Frequently Asked Questions
Employees are responsible for completing their own TD1 forms. The form includes worksheets and instructions that help employees calculate their eligible tax credits.
Once completed, employees must provide the TD1 to their employer so the correct amount of tax can be deducted from each paycheque.
No, employers do not submit TD1 forms to the CRA. However, the CRA requires employers to keep TD1 forms on file for at least six years in case of an audit or review.
Storing TD1 information accurately in QuickBooks Online Payroll helps meet this record-keeping requirement.
If an employee does not provide a completed TD1, employers must still deduct income tax. According to CRA guidelines, you should calculate deductions by allowing only the basic personal amount, with no additional credits.
This default approach ensures compliance until the employee submits a completed TD1.
Use these steps when you’ve already paid a federal tax (or other payroll tax) outside QuickBooks and need to record it so QuickBooks doesn’t show it as unpaid anymore.
1. Sign in to QuickBooks Online Payroll.
2. Go to the Taxes menu and select Payroll Tax.
3. Click the Payments tab to view taxes listed.
4. Find the tax you want to record.
– If it’s currently due, choose Record payment for that tax.
– If it’s from a prior period and no longer shows due, select Enter Prior Tax History then Add Payment.
5. Enter the Payment Date (use the actual date you paid).
6. Enter the Check Number (optional) and the Payment Amount.
7. Select Record (or Submit) to complete.
8. Optional: Run the Payroll Tax Payments report to confirm it’s recorded correctly.
Follow this when you made a tax payment outside QB and it’s still showing as unpaid in QuickBooks:
1. Log in to QuickBooks Online Payroll.
2. Navigate to Taxes > Payroll Tax.
3. Select the Payments tab.
4. Look for the liability that appears due.
5. Click Record Payment next to that item.
6. Choose a Payment Date and enter a Check Number (if applicable).
7. Review the details and select Record (or Submit) to save the payment.
8. If it’s a past period that doesn’t show up under current taxes, go to Enter Prior Tax History > Add Payment and fill in the details there.
Here’s how you make sure employee tax deductions are set up correctly:
1. Open QuickBooks Online and go to Payroll > Employees.
2. Choose the employee whose tax deductions you want to enter or update.
3. Click Edit next to their payroll details.
4. Select Pay & tax (or Tax withholding) settings.
5. Enter the correct federal tax withholding info (such as filing status, allowances/credits, additional withholdings).
6. Review state and local tax deductions if applicable.
7. Save your changes.
8. QuickBooks Online Payroll will then calculate tax deductions automatically for all future pay runs based on that info.
To let employees view and download their pay stubs online via QuickBooks Workforce:
1. Sign in to QuickBooks Online Payroll.
2. Go to Payroll > Employees.
3. Click on the employee’s name.
4. In their profile, make sure you enter a valid email address.
5. Look for an option like Invite to QuickBooks Workforce (or under Permissions).
6. Select Send Invite.
7. QuickBooks will email the employee a secure link.
8. The employee clicks the link and creates their own QuickBooks Workforce login.
9. Once signed in, they can view, download, and print pay stubs and (if enabled) W-2s.
Tip: If an employee can’t log in, double-check that the email in their QuickBooks profile matches the one they’re using to sign in.
Here’s what QuickBooks Workforce lets employees do after they’ve been invited:
1. View pay stubs online — Employees can access pay information for current and past payroll periods.
2. Download and print pay stubs — They don’t need you to email them individually.
3. Access year-end forms (like W-2s) once available.
4. Optionally, employees may also enter some personal info if you enable self-setup.
5. Workforce helps reduce administrative overhead and gives employees direct access to their own payroll documents.
