What is the T4127?

T4127 is the Canada Revenue Agency publication Payroll Deductions Formulas for Computer Programs. It is the specification a payroll engine is supposed to implement. It is not PDOC, and it is not the Income Tax Act restated in prose.

What it contains

Chapter 3 is CPP, CPP2, and EI, including the period exemption (truncate $3,500/P to the cent) and the annual maxima. Chapter 4 is federal and provincial tax: annualize, apply R and K, subtract credits K1 through K4 / K1P through K5P, divide by P, add additional tax L. Chapter 8 is the federal and provincial rate tables (the JSON files under data/rules/). Chapter 6 covers bonuses, retroactive pay, and related F5 splits.

Editions

CRA publishes a January edition and, most years, a July edition when a province changes mid-year. 2026 January is the 122nd edition; 2026 July is the 123rd. Only BC, NL, and PE overlay in July 2026. The rest of the country inherits January byte-for-byte.

T4127 versus PDOC

The Payroll Deductions Online Calculator is a CRA web app. It is the oracle this project compares against. It is not the formula. Where T4127 and PDOC disagree, both numbers are published:

• M-002 — K2 in the reaching period. T4127 says use the annual maximum in that period; PDOC does not. Selectable as k2_method.
• M-003 — midpoint direction. T4127 half-up versus a 1¢ PDOC line on 164 forms. Open. The full list is the conformance record.

What T4127 is not

It is not Revenu Québec TP-1015.3. It is not a tax-return engine (no RRSP deduction F unless the request supplies RPP contributions; this crate currently holds F at zero). It is not a gross-up formula — searching for a gross that produces a net is repeated Option 1, which this site will do in the browser.

Source URLs for the ingested editions are on each rates page’s calculator citations after you run a number.