--- title: "Regulation 105: Paying Non-Residents | EverStone" url: https://www.everstonecpa.com/blog/non-resident-withholding-regulation-105 description: "Paying a non-resident for services in Canada triggers 15% withholding under Regulation 105. See how it works, who is liable and how waivers apply." type: guide updated: 2026-10-04 summary: "Any payer, resident or not, who pays a non-resident for services rendered in Canada must withhold 15% of the gross amount under Regulation 105 and remit it to the CRA. The withholding is a payment on account of the non-resident’s Canadian tax, not a final tax, and a waiver can reduce it." faq_count: 6 publisher: EverStone CPA Inc., a Chartered Professional Accountant firm registered with CPA British Columbia and CPA Alberta service_area: British Columbia, Alberta, Ontario and Manitoba language: en-CA contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online --- [Home](https://www.everstonecpa.com/) [Blog](https://www.everstonecpa.com/blog) Regulation 105: withholding on payments to non-residents for services in Canada Tax # Regulation 105: *paying a non-resident for work done in Canada* By EverStone CPA · Updated September 2026 · 9 min read **Quick answer:** Any payer, resident or not, who pays a non-resident for services rendered in Canada must withhold 15% of the gross amount under Regulation 105 and remit it to the CRA. The withholding is a payment on account of the non-resident’s Canadian tax, not a final tax, and a waiver can reduce it. The cost of missing it falls on the payer, not the supplier. **Rather have a CPA handle this?** A CPA at EverStone replies with a straight answer and a fixed fee for your situation. [Get My Fixed Quote →](https://www.everstonecpa.com/book-online) ## Key takeaways - Paragraph 153(1)(g) of the Income Tax Act and Regulation 105 authorize withholding on fees, commissions and other amounts paid to non-residents, other than employees, for services rendered in Canada. - The rate is 15% of the gross amount paid, and the obligation falls on the payer, including a non-resident payer. - Withheld amounts are remitted by the 15th of the month following the month of withholding. - The payment is reported on a T4A-NR slip regardless of the amount paid or the tax withheld. - A waiver or reduction can be applied for, but until the CRA gives written notification the withholding is mandatory. A Canadian company hires a Seattle consultant for a week in Abbotsford, pays the invoice in full and forgets it. Regulation 105 exists to interrupt that, and missing it costs the payer, not the consultant. ## What Regulation 105 requires Paragraph 153(1)(g) of the *Income Tax Act* and subsection 105(1) of the *Income Tax Regulations* are the authority to withhold tax on fees, commissions and other amounts paid to non-residents of Canada, other than employees, for services rendered in Canada. The rate of withholding is **15% of the gross amount paid**. Three features of that sentence do most of the work in practice: - **It applies to every payer.** The CRA states that every payer, *including a non-resident payer*, who makes a payment of fees, commissions or other amounts to a non-resident in respect of services provided in Canada must withhold and remit. - **It is measured on gross, not net.** The 15% comes off the full amount paid, before any deduction for the non-resident’s own costs. - **It applies to services rendered in Canada.** Physical presence and where the work is performed matter more than where the contract was signed or where the invoice was sent from. **Want a CPA to handle this for you?** Tell us about your business and get a fixed fee in writing within one business day. See [our published fees](https://www.everstonecpa.com/pricing), or [get a fixed quote](https://www.everstonecpa.com/book-online). [Get My Fixed Quote](https://www.everstonecpa.com/book-online) ## What it is not Regulation 105 covers non-residents who are *not employees*. Non-resident employment services fall under Regulation 102, with its own waiver and employer certification regime. The same classification test used at home decides which applies. See [subcontractor versus employee](https://www.everstonecpa.com/blog/subcontractor-vs-employee-cra). Nor is it final. The CRA treats the withholding as a payment on account of the non-resident’s Canadian tax. A return may settle the final amount, with the 15% credited. **The 15% is not a treaty rate.** It applies whether or not a treaty ultimately exempts the non-resident from Canadian tax on the income. Treaty relief is delivered through the waiver process, or through the non-resident filing a Canadian return, not by the payer deciding not to withhold. Not sure how this applies to you? Every corporation is different. Send an enquiry for a straight answer and a fixed quote. [Send an Enquiry →](https://www.everstonecpa.com/book-online) [See fixed fees](https://www.everstonecpa.com/pricing) ## Remitting and reporting Regulation 108 requires withheld amounts to be remitted by the 15th of the month after the month deducted. Reporting is separate and unconditional: every payer, resident or not, reports payments to non-residents for services in Canada on a **T4A-NR slip**, regardless of the amount paid or tax withheld, the CRA states. T4A-NR slips and the T4A-NR Summary go to the CRA by the last day of February after the year paid, with a copy to the recipient. If your calendar covers [T4, T4A and T5 deadlines](https://www.everstonecpa.com/blog/t4-t4a-t5-slip-filing-deadlines-canada), this is the one usually missing. ## Waivers and reductions The CRA does not want to burden non-residents who may owe no Canadian tax. If one shows the withholding exceeds their final liability, the CRA may reduce or waive it under subsection 153(1.1), the undue hardship provision. The onus is on the non-resident, usually via a treaty position or estimated income and expense statement. Two practical points matter more than the form itself: - **Apply early.** The CRA indicates a request for a reduction or waiver should normally be filed 30 days before the services begin in Canada, or 30 days before the first payment is due for those services. - **Until written notification arrives, withhold.** The CRA is explicit that if the payer has not obtained written notification from the CRA, the required withholding is mandatory. A pending application is not a waiver. ## What happens if you do not withhold Failing to deduct or remit under Regulation 105 can bring an assessment for the amount, plus interest and penalty, under section 227 of the Act. The exposure is the payer’s, even though the full payment has already gone to the non-resident. That is why to sort it out before paying the invoice. ## How to handle it in practice - **Ask the question at engagement, not at payment.** Where will the work physically be performed, and is the supplier a non-resident? Those two answers decide everything else. - **Put the withholding in the contract.** A non-resident who has not been told about a 15% deduction will treat it as a shortfall on the invoice. Saying so up front avoids a dispute and gives them time to apply for a waiver. - **Register the accounts you need.** Withholding and slip filing run through CRA program accounts; if this is new territory, start with your [business number and program accounts](https://www.everstonecpa.com/blog/business-number-program-accounts-canada). - **Do not confuse this with GST/HST.** Cross-border service payments raise sales tax questions of their own, covered separately in [GST/HST on exports and non-residents](https://www.everstonecpa.com/blog/gst-hst-on-exports-and-non-residents). - **Keep Part XIII separate in your head.** Payments of rent, dividends, interest or royalties to a non-resident are a different withholding regime with different rates and a different slip. See [NR4 slips and Part XIII tax](https://www.everstonecpa.com/blog/nr4-slips-non-resident-payments-canada). ## The bottom line Regulation 105 is a cash-flow mechanism dressed as a tax rule: a deposit against tax a visiting provider may owe, collected by the payer. The rule of thumb: if a non-employee non-resident works physically in Canada, withhold 15% of the gross until the CRA says otherwise in writing. Sources - [Canada Revenue Agency — Tax treatment of non-residents who perform services in Canada](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/rendering-services-canada/tax-treatment-non-residents-who-perform-services-canada.html) - [Canada Revenue Agency — Rendering services in Canada](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/rendering-services-canada.html) - [Canada Revenue Agency — Non-residents rendering services in Canada](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/rendering-services-canada/non-residents-rendering-services-canada.html) This article is general information for Canadian business owners and is current as of July 2026. It is not tax, legal or accounting advice, and it does not create a client relationship. Tax rules change and your situation is unique, so please [speak with a CPA](https://www.everstonecpa.com/book-online) before acting on anything here. About this article **EverStone CPA** Prepared and reviewed by a CPA at EverStone CPA, serving businesses in BC, Alberta, Ontario and Manitoba. [About the firm →](https://www.everstonecpa.com/about) · [Send an enquiry →](https://www.everstonecpa.com/book-online) ### Keep reading [NR4 slips and Part XIII tax →](https://www.everstonecpa.com/blog/nr4-slips-non-resident-payments-canada) [Subcontractor vs employee →](https://www.everstonecpa.com/blog/subcontractor-vs-employee-cra) [Corporate tax services →](https://www.everstonecpa.com/tax-services) [NR4: Statement of Amounts Paid or Credited to Non-Residents of Canada →](https://www.everstonecpa.com/forms/nr4) FAQ ## Frequently asked questions **What is Regulation 105 withholding?** It is the withholding required on fees, commissions and other amounts paid to non-residents of Canada, other than employees, for services rendered in Canada. The authority is paragraph 153(1)(g) of the Income Tax Act together with subsection 105(1) of the Income Tax Regulations, and the rate is 15% of the gross amount paid. **Who is responsible for withholding?** The payer. Every payer, including a non-resident one, of fees, commissions or other amounts to a non-resident for services in Canada must withhold and remit, the CRA says. Failure can bring an assessment plus interest and penalty under section 227. **When must the withheld tax be remitted?** Regulation 108 requires withheld amounts to be remitted by the 15th of the month following the month in which they were deducted or withheld. **Do I still file a slip if I withheld nothing?** Yes, on a T4A-NR slip, issued by the payer whatever the amount or withholding, the CRA states. Slips and the T4A-NR Summary are due by the last day of February of the following year. **Can the 15% be reduced or waived?** Yes. Where a non-resident can demonstrate that the normal withholding exceeds their ultimate Canadian tax liability, the CRA may reduce or waive it under subsection 153(1.1). The onus is on the non-resident, typically on a treaty basis or through an estimated income and expense statement, and the request should normally be filed 30 days before services begin or before the first payment is due. **What if a waiver application is still pending?** Withhold. The CRA is explicit that if the payer has not obtained written notification from the CRA, the required withholding is mandatory. A pending application does not relieve the payer, and the payer carries the exposure if the amount is not deducted. ## Paying a contractor who works in Canada from abroad? Regulation 105 puts the obligation on the payer, and it is easier to handle before the invoice is paid. Send an enquiry. [Get My Fixed Quote](https://www.everstonecpa.com/book-online)[Book a Paid Advice Call](https://www.everstonecpa.com/advice-call) ## Have a question about this? Ask free through [the quick-question form](https://www.everstonecpa.com/quick-question); a CPA replies within one business day. 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