This is a presentation that was offered in August 2015 in Edmonton and Calgary, Alberta.

1. Payroll Law
Presented by:
Wade Farquhar

2.  9:00 Seminar begins
10:00 Ten minute break
11:00 Ten minute break
12:00 Lunch break
 1:00 Afternoon session begins
 2:00 Ten minute break
 3:00 Ten minute break
 3:50 Complete evaluations distributed
 4:00 Dismiss
Today’s Schedule:

3. Link for this and other
presentations:
www.LeanTeams.ca
www.Slideshare.net/leanteams

4. Withholdings and remittances.
What we will cover today:
Employment standards that affect payroll.
Situations that lead to penalties and interest.
Payroll documentation and record retention.
Bonus material.
2
3
4
5
1

5. Introductory
Information.

6. Determine worker status.1
Opening a payroll account
Hiring employees
Calculating compensation
Calculating and remitting deductions
2
3
4
5
Payroll Basics
Completing and filing returns
Employer’s
Responsibility
Specific to
the Payroll
Department
6

7. Important Principles
• Ignorance is not bliss.
• The company is always guilty until proven innocent.
• Administratively impossible does not mean unenforceable.
If a law or regulation exists you are required to:
• Know about it.
• Do something about it.
• Administer it per instruction, if they are provided.

8. The Risk Continuum
Danger Zone Neglect
Proactivity Safety Zone

9. Federal
• Industries that are inter-provincial or international in scope.
• Includes: banking, transportation, radio and television,
companies doing business in two or more provinces.
• Additional survey and reporting requirements here.
Provincial
• Trade unions, hours of work, work comp, paid vacations.
• Relationship between employer and employee.
Territory
• Under federal jurisdiction unless otherwise stated.
Three Jurisdictions

10. • Banks
• Marine shipping, ferry and port services
• Air transportation, including airports
• Railway and road transportation
• Canals, pipelines, tunnels and bridges
• Radio and television broadcasting
• Grain elevators, feed and seed mills
• Uranium mining and processing
• Businesses dealing with the protection of fisheries
• Private businesses necessary to the operation of a federal act
• Many First Nation activities
• Crown corporations
Federally Regulated Industries

11. • Canadian employers are either federally or
provincially regulated, but not both.
• The primary industry within which a business
operates determines its jurisdiction.
• Industries that are inter-provincial and/or
international in scope are federally regulated.
• All other businesses are provincially regulated.
Splits in Jurisdictions Summary

12. Recordkeeping

13. Employers are required to keep the following for all employees:
• Name, address, and D.O.B.
• Date that the present period of employment began.
• Regular and overtime hours of work.
• Wage rate and overtime rate.
• Earnings paid for each pay period.
• Deductions and reasons for deductions in each pay period.
• Time off instead of overtime pay provided and taken.
• The beginning and end dates of each annual vacation.
• All wage increase information since employment began.
• Copies of documentation for any protected leave.
Recordkeeping Requirements

14. Retention Requirements
Employers are required to retain all employee
information as follows:
• Daily time and attendance records for current
employees must be retained by an employer for
least three years.
• Employee records must be retained for 3 years
after termination.
• Tax and payroll-related items: Six years from the
end of the current tax year.

15. Form TD1s

16. Who should complete this form?
• Those with a new employer or payer.
• Those who wish to change amounts from previous claimed.
• Those who can claim the deduction for living in a prescribed zone.
• Those who want to increase the amount of tax deducted at source.
People do not need to complete the provincial TD1 unless they wish to claim
wish to claim more than the basic personal amount.
Individuals do not need to complete a new TD1 every year. If a change
change happens, they must complete a new form withing seven days.
days.
TD1 Form

17. Which form should be used?
• Employees who claim more than the basic personal amount
have to complete the provincial TD1.
• Pensioners who claim more than the basic personal amount
have to complete the provincial TD1.
• Individuals paid by commissions and who claim expenses can
elect to use Form TD1X, to take into consideration the expenses
the calculation of their income tax.
• Fishers who want to have income tax deducted from their
income should use Form TD3F
• First Nations who want to determine if their income is taxable
should complete Form TD1-IN,
TD1 Form

18. Labour and Employment Issues
Federal Labour Standards
Alberta Employment Standards
Professional Organizations
Canadian Payroll Association
CRA Resources
Employer’s Guide to Deductions and Remittances
Employer’s Guide to Taxable Benefits and Allowances
Taxable/Non-taxable gifts and awards source info.
Correcting remittance errors
Primary Sources for Today’s Discussion

19. Contractor
Or
Employee
WiFi Password: oilers457

20. CRA 4-point Test:
1. Control
2. Ownership of tools/equipment
3. Chance of profit or risk of loss
4. Integration into the company
Determining Worker Status
Behavioral
Financial Control
Financial Responsibility
Relationship of the parties

21. $65k/
year
TaxTotal Income
Employee: IT Manager
Disposable
Income
Transport PhonesHousing VacationUtilitiesFood

22. TaxIncome Disposable
Income
Transport PhonesHousing VacationUtilities Food
Contractor: IT Consultant
Personal
Expenses


23. Independent Contractor
• Contract for Services
Agreement
• Proof of bona-fide
business
• Invoices or cash
receipts.
Employee
• Employment agreement,
contract or job description
• TD1 or TP1015.3-V
• Time or tracking records.
• Payroll records of payments,
withholdings, remittances
• T4 slips
Recordkeeping Requirements

24. Employment
Standards

25. • Work schedule: 8 hours per day, 44 hours per week; or
10 hours per day, 4 days per week.
• Averaging work time: Available, but not as common as
in other provinces due to overtime agreements.
• Pay (minimum wage): $11.20/hr.
• Termination: See termination chart.
• Vacation: 4% of gross wages for first 5 years, 6% after
that.
• Overtime: Daily and weekly overtime allowed.
• Holidays: 9 mandatory public holidays.
Employment Standards Summary

26. • Minimum wage: $11.20 for most employees.
• $10.70 for employees serving liquor as part of
their regular job.
• $446 per week for many salespersons and
certain professionals.
• $2,127 per month for domestic employees.
• For information about other provinces see the
Minimum wage database.
Minimum Wage

27. • Employees must be paid within 10 days of the
last day in the pay period.
• Pay periods should not exceed one month in
time.
Pay Periods

28. “Salaried”
Employees

29. •Managers, superintendents, and employees
who carry out management functions are
exempted from hourly remuneration (50% rule
applies).
•Architects, dentists, engineers, lawyers, and
other specialized positions are also excluded.
See the list of excluded positions here.
Who Is Allowed To Be Salaried Without Overtime?

30. Hiring and termination of employees.1
Managing work output of other employees.
Creating or interpreting policies.
Making budgetary decisions.
Committing the company’s financial resources.
2
3
4
5
Management Duties:

31. • Clerical, manual labour
• Directed work
• Routine, repetitive
• Front line workers
• Support staff
Non Management Duties

32. Management Duties:

33. Non Management Duties

34. Employee is paid salaried but does not qualify for overtime
exemption.
• Employee salary is for all non-overtime hours up to 40.
• Sharon’s salary is $500 per week. One week she works 46
hours.
• $500 ÷ 40 = $12.50
• $12.50 x 1½ = $18.75
• $18.75 x 6 = $112.50
• $500 + $112.50 = $612.50
Salaried – with Overtime (Purple
Squirrel)

35. Hours of Work
Rules

36. • 8 hours per day or 10 hours per day.
• Not to exceed 44 scheduled hours.
• An employee who reports for work must be paid for 3 hours of
work.
• 12 hour maximum per day, even with overtime pay.
Unless an unforeseeable or unpreventable emergency
occurs, or the Director of Employment Standards issues a
permit.
• Yes, there are several industries exempt from to these rules.
Hours of Work Rules

37. • Consists of fewer work days per week and more work
hours each day.
• Must be scheduled in advance, not determined after the
fact.
• Maximum hours per day are 12.
• Maximum hours per week is 44.
• If part of a cycle of weeks (an averaging agreement) then
the remaining hours and weeks of the cycle must be
clarified in writing.
• For more information click here.
Compressed Work Week

38. Overtime
• Employees are paid 1.5 times their regular wage for any
time worked beyond hours of work maximums.
• There is daily and weekly overtime in Alberta.
• There are several exempt positions and industries here as
well.
• What is the problem with the phrase, “Overtime will not be
paid unless it is approved prior to being worked.”?

39. • Managers, supervisors and those employed in a confidential capacity.
• Farm workers.
• Professionals, including agrologists, architects, certified or chartered accountants, chiropractors, dentists,
denturists, engineers, information systems professionals, lawyers, students-at-law, optometrists, podiatrists,
psychologists and veterinarians.
• Salespersons of automobiles, trucks, buses, farm machinery, road construction equipment, heavy duty
equipment, manufactured homes or residential homes.
• Salespersons who solicit orders, principally outside of the employer’s place of business, who are fully or partly
paid by commission (this does not apply to route salespersons).
• Licensed salespersons of real estate and securities.
• Licensed insurance salespersons who are paid entirely by commission income.
• Salespersons who are at least 16 years old and are engaged in direct selling for licensed direct sellers.
• Licensed land agents.
• Extras in a film or video production.
• Counselors or instructors at an educational or recreational camp that is operated on a charitable or not-for-
profit basis for children, persons with disabilities, or religious purposes.
• Domestic employees (these employees are exempt only from sections 16 and 17 of theCode concerning hours
of work and notice of work times, but not from rest periods).
Exempt Positions and Industries

40. SUN MON TUES WED THUR FRI SAT
Hours 8 10 6 13
Regular 8 8 6 8
1½ 2 5
Total hours worked in week: 37
Hours at time-and-a-half: 7
After working 8 hours per day an employee must be paid
time-and-a-half. This applies even if the employee works
less than 40 hours in a week.

41. Sun Mon Tues Wed Thurs Fri Sat
Hours 8 7 8 8 7 7
Regular 8 7 8 8 7 6
1½ 1
Total hours worked in the week: 45
Hours paid at time-and-a-half: 1

42. Overtime Agreements
• Allows employees to bank overtime worked that is later
taken as time off with regular pay.
• It is an hour-for-hour agreement (Ex. 1 hour of overtime
worked = 1 hour of time off with pay).
• The overtime bank must be cleared within 3 months.
• It is possible to have an overtime agreement with a group of
employees so long as the majority agree to it.
• See a sample overtime agreement here.

43. Required Rest Periods
• Employees must have at least 8 hours rest between shifts.
• They must also have one day of rest each work week, or
• Two consecutive days after two consecutive work weeks, or
• Three consecutive days after three consecutive work weeks, or
• Four consecutive days of rest after four consecutive work weeks,
or
• At least four consecutive days of rest after 24 consecutive work
days.
• Or, they must have a permit from the Director of Employment
Standards.

44. Required Rest Periods
• Each employee that works 5 hours or more is entitled to
a 30 minute unpaid lunch period.
• The 30 minutes of rest can be taken in one unbroken
period, but may be taken in two 15-minute or three 10-
minute breaks.
• Yes, there are many exempt positions and industries to
this rule as well.

45. Employment Permits
• Adolescent Employees (ages 12, 13 and 14)
• Extended Days ofWork
• Extended Hours ofWork
• Extension to Overtime Banking Period

46. RULES:
• Be in writing.
• Specify number of weeks over which hours will be averaged.
• Specify work schedule for each day.
• Specify start and end date of agreement.
• Be signed by employer and employee one week before start
date.
• Cannot last more than one year.
• Hours scheduled must not average more than 44 per
week over the period of the agreement.
Averaging Agreements

47. • Fred Pryor Training Rewards
• HR for Anyone with Newly Assigned HR Duties
May 5th
• Advanced Microsoft Excel
April 13th
• Project Management Workshop
July 27th
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Recommended Resources
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$746

48. • Commuting time is not counted as work time for the purposes of the ESA.
• However, there are a number of exceptions to this rule:
• If the employee takes a work vehicle home in the evening for the convenience of
the employer, the work time begins when the employee leaves home in the
morning and ends when he or she arrives home in the evening.
• If the employee is required to transport other staff or supplies to or from the
workplace or work site, time so spent must be counted as work time.
• If the employee has a usual workplace but is required to travel to another location
to perform work, the time traveling to and from that other location is counted as
work time.
Time spent travelling during the course of the workday is considered to be work
Travel Time

49. • Time spent by an employee in training that is required by the employer or
by law is counted as work time. For example, where the training is required
because the employee is a new employee or where it is required as a
condition of continued employment in a position, the training time is
considered to be work time.
• Time spent in training that is not required by the employer or by law in
order for an employee to do his or her job is not counted as work time. For
example, where an employee hoping for a promotion with the employer
takes training in order to qualify for it, time spent taking the training is not
considered to be work time.
Training Time

50. Holidays.

51. The statutory holidays are:
• New Years Day
• Alberta Family Day
• Good Friday
• Victoria Day
• Canada Day
 July 1, except when it falls on a Sunday, then it is July 2
• Labour Day
• Thanksgiving Day
• Remembrance Day
• Christmas Day
Stat Public Holidays

52. Federal Stat Public Holidays
• New Year's Day
• Good Friday
• Victoria Day
• Canada Day
• Labour Day
• Thanksgiving Day
• Remembrance Day
• Christmas Day
• Boxing Day

53. • The employee must have worked for the employer for at least 30 days,
• The employee must have worked their last scheduled shift before, and the
first scheduled shift after, the holiday (employees are eligible if they have
the employer’s permission to be absent for these shifts), and
• The employee must not have refused to work on the general holiday.
• Employees who work on a statutory holiday must be paid:
• Time-and-a-half for the hours worked
Plus
• Holiday pay as defined the average day’s pay going back as far as the
previous 9 weeks.
• Regular earnings include wages and vacation pay received for vacations
taken, but does not include overtime pay.
For more information about general holiday pay click here.
Stat Holiday Pay Requirements

54. Sick Leave – Not mandatory in Alberta
• May be with or without pay.
• Employer can request in writing for a doctor’s
Vacation – time off work for vacation.
• Must be taken in at least one full day per year.
• May be taken in shorter periods.
• Breaks less than 3 months are considered as
continuous employment.
Sick, Vacation and Leave Pay

55. • If agreement exists – may be included on every
cheque or paid out.
• At least one day must be taken per year.
• Eligible to take vacation after 1 year of service.
• If terminated prior to one year anniversary
employee must be paid 4%.
• Vacation time vs. vacation pay.
Vacation Pay Rules:

56. • Pregnancy
• Must have worked for the employer for 52 weeks.
• Length of leave – 15 weeks
• Extension – 6 weeks
• Seniority/Benefits – continuous.
• Parental
• Length of leave – 37 weeks.
Pregnancy & Parental Leave

57. Compassionate Care Leave
Policy and Procedures:
• Up to 8 weeks to provide care or support to family member
for serious medical condition with significant risk of death.
• Renewable each 26 weeks.
• Medical certificate required within 15 days after employee’s
return to work.
• Cannot suspend, discipline, terminate, lay-off, or demote an
employee for taking CCL.
• Must be reinstated to former position, salary and benefits.

58. • Death or disappearance of a child
• Critically ill child
• Reservist leave
Other Leave Requirements

59. Termination

60. Length of Service Required Notice/Pay by
Employer
3 months to 24 months 1 week
>2 years but <4 years 2 weeks
>4 years but <6 years 4 weeks
>6 years but <8 years 5 weeks
>8 years but <10 years 6 weeks
>10 years 8 weeks
Termination Chart

61.  Within 3 days when the employer terminates with notice
or pay in lieu of notice is required.
 Within 10 days of date of termination when the
employer is not required to give notice or pay in lieu.
 Must provide written statement of wages:
• Amount of gross vacation pay and
• Gross termination or severance pay,
• Along with how amounts were calculated.
Employment records must be retained for 3 years.
Payment of Wages on Termination

62. • Must be no longer than 59 days.
• On day 60 you must terminate and pay all wages due.
• The employer may recall the employee within the 59
days with one week’s notice.
• If the employee fails to return to work when recalled
they can be terminated without termination pay or
notice.
• This is really an HR issue beyond this point… Come to
the seminar.
Temporary Layoffs

63. Withholdings &
Deductions

64. Withholdings
Government regulated withholdings:
• Employment Insurance (EI)
• Canada Pension Plan (CPP)
• Quėbec Pension Plan (QPP)
• Federal and Provincial Income Taxes
The courts can regulate
• Garnishments
• Maintenance Orders

65. CPP
• 2016 maximum pensionable earnings: $54,900
• Contribution rate: 4.95%
• Annual basic exemption: $3,500
• Annual maximum contributory earnings: $51,400
• Annual maximum contribution: $2,544.30

66. • Death benefits.
• Pension benefits.
• Payment at the end of employment that is not
considered employment income.
• Wage loss replacement benefits.
• Workers comp advances or loans.
• Payments linked to special conditions.
Benefits not Subject to CPP

67. Sample CPP Calculation
Pay period exemption = Yearly basic exemption/pay period frequency
CPP Contribution = Contributory earnings X CPP Rate
Contributory earnings = Gross pensionable income – Pay period
exemption
$45,000/26 payments = $1,730.77 - $134.61 = $1,596.16
$1,596.16 X .0495 = $79.01 (Employer and Employee must pay this).
Example: Sarah earns $45,000 per year and is paid bi-weekly. Calculate
her employer and employee CPP contribution amount.

68. EI
• 2016 maximum insurable earnings: $50,800
• Employee contribution rate: 1.88%
• Employer contribution rate: 2.632%
• Employee rate X 1.4
• Annual maximum employee contribution: $955.04
• Annual maximum employer contribution: $1,337.06
• Unlike CPP, there is no pay period exempt amount.

69. Most non-cash benefits are not considered insurable.
• Employer contributions to an RRSP.
• Retiring allowances or severance pay.
• Director’s fees.
• Monies earned before the death of an employee.
• Maternity, parental, or CCL supplemental benefits.
• WLRP benefits.
• Any advances on a WCB award.
Benefits not Subject to EI

70. • An employer may also deduct money from an employee's wages
if the employee has signed a written statement authorizing the
deduction.
• An employee's written authorization must state:
• The specific amount of money to be deducted;
Or
• Provide a method of calculating the specific amount of money
to be deducted.
• An employee's verbal authorization ("blanket authorization") that
he/she owes money to the employer is not sufficient.
Deductions From Pay

71. Even with a signed authorization, an employer cannot make a deduction if:
• The purpose is to cover a loss due to "faulty work." For example,
"faulty work" could be a mistake in a credit card transaction, work that
is spoiled or rejected, or a situation where tools are broken or
company vehicles damaged;
Or
• The employer has a cash shortage or has had property lost or stolen
when an employee did not have sole access and total control over
cash or property that is lost or stolen. A deduction can only be made
when the employee was the only one to have access to the cash or
property, and has provided a written authorization to the employer to
make the deduction.
Deductions From Pay

72. Taxable
Non-Taxable

73. Tangible Property or Gift Card or Cash
• A gift (either in cash or in kind) from an employer to an employee is
a benefit derived because of the individual's employment.
• When the value of a gift commemorating a wedding, Christmas or
similar occasion does not exceed $500 and is tangible property –
non taxable.
• This practice will only apply to one gift to an employee in a year,
except in the year an employee marries in which case it will apply to
two gifts.
Cash and near-cash are taxable (special rules apply for near-cash)
cash)
Gifts

74. Award - Must be given for an employment-
related accomplishment to be nontaxable
 Outstanding service, employees’ suggestions, or meeting
exceeding safety standards.
 It must be recognition of an employee’s overall contribution
the workplace –not recognition of job performance.
Reward – given to employee for
performance-related reasons - taxable
Awards vs. Reward

75. Awards
• Must be employment-related accomplishment.
• Long-service award rules:
 Value up to $500 – tangible property only - non-taxable.
 Must be for a minimum of five years of service.
 Must be at least 5 years since you gave the employee
the last long-service or anniversary award.
 Is not included in other gift or award benefits.

76. Example 1: You give your employee a $100 gift card or gift
certificate to a department store. The employee can use this to
choose whatever merchandise or service the store offers.
Gift is taxable benefit because there is an element of choice.
Example 2: You give employee tickets to an event on a specific
date and time.
Gift is non-taxable because there is no element of choice.
Examples of Gifts and Awards

77. Prize Draws and Social Committees
Taxable:
• Item given to one employee by an employer via a prize draw.
• Item paid for by the employer and given via a draw to an employee
a high-performing team.
Nontaxable:
• Item paid for by a social committee and given via a draw
• Committee must be entirely funded by the employee
• If funded by employer – taxable.
• If funded by both – employer percentage is taxable – employee
percentage is nontaxable.

78. Automobile Allowance
Personal use of company vehicle is taxable.
• Use “stand-by charge” method calculation (available on
CRA website: Auto benefits calculator pub. T4130).
Reasonable per-kilometre allowance – nontaxable.
• 54₵ per kilometre for the first 5,000 kilometres driven and
48₵ per kilometre driven after that
• Cannot be averaged at the end of the year to keep
nontaxable
• Flat rate allowance - taxable

79. Cellular Phone Service
Personal use of company cell phone is taxable
• Employer has responsibility to determine FMV (fair market value)
of personal use.
• Must justify calculations.
Exception to the rule (all must apply):
• The plan’s cost is reasonable.
• The plan is a basic plan with a fixed cost.
• Your employee’s personal use of the service does not result in
charges that are more than the basic plan cost.

80. Air Miles.
3 Different Scenarios.

81. Airline Bonus Points
 Your employees may collect loyalty points, such as
frequent flyer points or air miles, on their personal
credit cards when travelling on business trips, even
though you reimburse them for the amounts they
spend.
 Usually, these points can be exchanged or cashed in for
rewards (goods or services, including gift cards and
certificates).

82. Airline Points, cont.
• Your employees do not have to include in their income the value of
the rewards they received or enjoyed from the points they collect
on these business trips, unless any of the following applies:
• The points are converted to cash.
• The plan or arrangement between you and the employee
seems to be a form of additional remuneration.
• The plan or arrangement is a form of tax avoidance.
• If any of the conditions above are met, the employee has to declare
the fair market value of any personal rewards he or she received on
an income tax and benefit return.

83. Exception to the rule:
• If you control the points (such as when an employee uses a
company credit card, you have to report on their T4 slip the
market value of any personal rewards he or she received
redeeming the points.
• You have to include any GST/HST that applies in the value of
this benefit.
Airline Points, cont.

84. Example 1
Personal credit card
• Pauline's employer allows her to use her personal credit cards whenever possible to
for business expenses, which the employer then reimburses to her. To maximize the
points earned, Pauline used her personal credit cards to pay for various employer
business costs, including travel expenses of other employees.
• CRA views this arrangement as a form of additional remuneration provided to
Pauline would not normally pay for employer business costs other than her own
related expenses, incurred in the normal course of working. She would not normally
cover the cost of business expenses of other employees. Pauline will have to
the fair market value of any personal reward she receives when she redeems the
She will then have to declare the value as income on her income tax and benefit

85. Company credit card points for benefit of the employee
• Jennifer's employer has a company credit card, under which loyalty points are
Jennifer uses the card for employment-related purchases. The employer is billed,
the credit card charges, and receives the loyalty point statement. The employer
Jennifer to redeem the points for personal rewards.
• In this case, the fair market value of the goods or services received by Jennifer is a
taxable employment benefit, as her employer controls the tracking and
of the points. The employer has to report the value of the goods or services on her
slip in the year that the points are redeemed.
• Alternately, if the employer did not control the tracking and redemption of the
the value of any points redeemed by Jennifer for personal rewards would not have
be included on her T4 slip. Jennifer may have to declare the income on her income
and benefit return.
Example 2

86. Personal loyalty points card
• Frank has a personal credit card he uses for both personal and work-
expenses. The card offers loyalty points which can be cashed in for travel
rewards, but which cannot be redeemed for cash. Frank decides to
some of the points to take his family on vacation.
• Since Frank controls the points, and this arrangement does not seem to
form of additional remuneration, he does not have to include the value of
the points earned from work-related expenses as income on his income
and benefit return.
Example 3

87. Insurance

88. Supplemental Health Insurance
Where an employer makes a contribution to a private health
services plan in respect of an employee, no taxable benefit
arises to the employee.
Benefits provided to an employee under a private health
services plan are not subject to tax in the employee's hands.
"Private health services plan" is defined in subsection 248(1).
(See also the current version of IT-339, "Meaning of Private
Health Services Plan" and IT-85, "Health and Welfare Trusts
for Employees".)

89. Employer's Contribution under Provincial Medical Plans:
Where an employer is required, under a provincial hospital
insurance plan, a provincial medical care insurance plan, or
both, to pay amounts to the provincial authority
administering such plan or plans (other than with respect to
the contributions or premiums that an employee is required
make under the plan), the payment of such amounts does
give rise to a taxable benefit to employees.
Provincial Healthcare Plans

90. Non Taxable as long as
 Expenses are covered as outlined in IT-519.
Taxable
 If used for expenses not allowed in IT-519.
Health Spending Accounts (HSA)

91. Group Term Life Insurance Policies
Calculating the benefit:
If the premiums are paid regularly and the premium rate for each
individual does not depend on age or gender, the benefit is:
The premiums payable for term insurance on the individual’s
life - plus,
The total of all sales taxes and excise tax that apply – minus,
The premiums and any taxes the employee paid directly or
through reimbursements to the employer.
If taxable it is pensionable but not insurable.

92. Term Life Calculation
Premiums paid by employer +sales tax –portion paid by employee
= taxable benefit
CPP must be paid on this benefit, but not EI

93. Parking
Employer-provided parking is usually a taxable benefit for an
employee, whether or not the employer owns the lot.
Exceptions to the rule:
• The parking does not have a FMV.
• There are significantly fewer spaces than there are
employees who want parking and the spaces are
available on a first-come, first-served basis.
• There is no taxable benefit if you provide parking to your
employee for business purposes and your employee
regularly has to use his or her own automobile to do his or
her duties.

94. Professional Membership Dues
 If you pay professional membership dues for
your employee and you are the primary
beneficiary of the payment, there is no
taxable benefit for the employee.

95. Health Club Dues
The use of a recreational facility or club is a taxable benefit if:
• You pay, reimburse or subsidize the cost of:
 Membership to recreational facility.
 Membership to a business or professional club.
Non-taxable benefit includes:
• You provide an in-house recreational facility.
• You pay for a company membership at a facility and the
employees are allowed to use company membership.

96. RRSPs
Contributions the employer makes to an
employee’s RRSP is a taxable benefit.
Administrative fees you pay are considered
taxable and pensionable.
Do not deduct EI.

97. Uniforms
Non-taxable if the following conditions apply:
• You supply your employee with a distinctive uniform he or
she has to wear while carrying out the employment duties.
• You provide your employee with special clothing designed
to protect them from hazards associated with the
employment.
• Reimbursements with receipts for uniforms and safety gear
is nontaxable.

98. Detailed method:
 Price on receipts.
Simplified method:
 $17 per meal; not to exceed $51 per
Really Simple Method:
 Use Expensify.
Meal Allowances/Reimbursements

99. No really,
we are almost done.

100. Overview of the changes:
• All workers aged 60 to 65 have to make CPP contributions—even if
are receiving a CPP or Quebec Pension Plan (QPP) retirement pension.
• Workers who are 65 to 70 years of age and who are receiving a CPP
or QPP retirement pension have to contribute unless they have taken
action to stop their CPP contributions. By continuing to contribute
(which can be done up to and including the month they reach 70 years
age), they will receive more benefits by way of the new post-retirement
benefit (PRB).
CPP Newest Regulations

101. To stop contributing to the CPP, workers have to be at least 65 years of age and:
 Employees (who may also have self-employment income) have to
CPT30, Election to Stop Contributing to the Canada Pension Plan, or
Revocation of a Prior Election.
 Send the original form to the Canada Revenue Agency (CRA), and give a copy
their employer. The change will take effect on the first day of the month after
employee gives the form to their employer.
 Self-employed workers must complete Schedule 8, CPP Contributions on Self-
Employment and Other Earnings, when they file their income tax and benefit
return. The change will be effective on the first day of the month referenced in
Schedule 8
CPP Newest Regulations

102. What type of remitter are you?
• Regular remitter
• Quarterly remitter
• Accelerated remitter
 Remitting guidelines are based on amounts of
withholdings to be remitted.
 Updated remittance amounts can be found here.
Withholding Remitting

103. Penalties Incurred Through PIER
Penalties and Interest
 Based on lateness of remittance,
 Failure to remit,
 Interest can be charged on unpaid penalties in
addition to amounts owed.
 Interest in compounded daily from date
remittance was first due or penalty was first
assessed.

104. Garnishments.

105. Creditors
Types of Garnishments
Tax garnishments from the CRA
Child support/Maintenance orders
2
3
1

106. Creditor Garnishments
• Court ordered
• Cannot terminate the employee for garnishment
Fine: $1,000 or face imprisonment with a duration of one year.
• Deduction controlled by federal and provincial laws.

107. Tax Garnishments from CRA
• Allowed without a court order.
• No limit.
• CRA garnishments come first.
• Usually last resort.

108. Child Support/Maintenance Orders
• Court may order be paid in periodic payments, lump
sum or both.
• Limits are governed by federal and provincial law.
• Cannot terminate an employee for garnishee.

109. Employer Liability
If you receive a Requirement to Pay notice and you do not comply with the requirements:
YOUR COMPANY MAY BE HELD
RESPONSIBLE FOR THE AMOUNTS YOU
DIDN’T REMIT!

110. Final Thoughts.

111. Special Payroll Concerns
Final Pay
• Calculate the employee’s earnings and deductions
year to date.
• Give employee T4 slip.
• File government copy by the last day of February of
the following year.
• Complete the Record of Employment (ROE).
• Withholding rates for lump sum payments (incl.
retirement allowances).

112. • Join the Canadian Payroll Association.
• Training Rewards Resources:
• HR for Anyone with Newly Assigned HR Duties
• Microsoft Excel
• Quickbooks Payroll
Next Steps:

113. … AND
YOU’RE
DONE!
Thank you.

114. Link to this
presentation:
Wade Farquhar
LeanTeams.ca/resources

115. To download this
presentation