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Statutory Deductions

2008-09-09T14:08:00.007-04:00

Statutory deductions are CPP (Canada Pension Plan), EI (Employment Insurance), and Income Taxes with include federal, and provincial/territorial Income Tax. These particular deductions are termed "Statutory Deductions" as they required under legislative statue. Each deduction has its own story (which will be discussed in greater detail in up coming posts) however in this post we will explore the governmental bodies which are directly responsible for the regulations.

We'll Start off with the CRA (Canada Revenue Agency) which is a federal government agency that manages the "Tax Services" and "Benefits Programs". Each Year the CRA collects approximately $300 Billion in taxes and duties on behalf of the Federal and Provincial Governments. Unlike our neighbors south of our border with the horror stories you hear about with the IRS, the CRA is easy to deal with and get results right away. This is no surprise once you realize that they actually live up to their mission statement which is as follows; The CRA's mission is to promote compliance with tax legislation and regulations through quality service, responsible enforcement and communication. If you've ever spoken to Customer Service Rep you would agree that they are pleasant to speak with and quite knowledgeable.
The CRA is directly responsible for the collection of the Statutory deductions however also share the responsibilities as follows;

The Canada Pension Plann (shared responsibility with Human Resources and Social Development Canada, and also Service Canada).

Employment Insurance (shared responsibility with Human Resources and Social Development Canada, and Service Canada).

Income Taxation (no shared responsibilities).

Finally, the CRA tracks their level of success by the following bench marks.

Filing- their goal is to have over 90% of individual and corporate income tax returned filed on time.

Registration- to have the majority of all known businesses registered for corporate income tax, GST, payroll deduction and import/export accounts. These are identified with the same Business number however accounts are RT (GST), RC (corporate tax), RP (payroll) and you could have multiple accounts under each.

Remittance-to have over 90% of individual and corporate taxes paid on time.

Reporting-through reporting such as T4's/T4A's the government can measure the level of compliance with each business.

The HRSDC (Human Resource and Social Development Canada) is a department of the Government of Canada and is committed to building a stronger and more competitive Canada by empowering Canadians with tools and various resources. In a nutshell, HRDC supports human capital development, labour market development, and is dedicated to establishing a culture of lifelong learning for Canadians. Their programs include:

Employment Insurance

Labour programs

Youth Employment Strategies

Canada Education Savings Grant

Canada Student Loans program

HRSDC is responsible for the following.

Financial requirements related to the establishment of the annual Employment Insurance premium rate.

the establishment of annual maximum insurable earnings

the administration of provisions related to Wage Loss Plans

the administration of provisions regarding Job Creation programs.

Service Canada was created by the federal government in 2005 to form a service delivery network, providing easy-to-access services from multiple federal departments. Service Canada serves as the government's operational arm while HRDSC makes makes the policies.

Through the HRDSC, Service Canada delivers the following programs:

Issuance of Social Insurance Number (SIN) and the protection and security of SIN information

Record of Employment on the Web

admintration of employment Insurance Programs i.e parental, sickness or sesonal employment, etc

administration of employment Insurance Premium Reduction program

administration of Canada Pension Plan benefits

administration of befits for seniors, including Old Age Security Program and Guaranteed Income Supplement

Issuance of passports.

These are the 3 main governmental departments responsible for the "Statutory Deductions", for for information, visit their websites or contact me directly with your questions.

Paywiz

The Employee/Employer Relationship

2008-08-29T14:06:00.012-04:00

Many small businesses are inclined to save money by hiring contracted staff in order to reduce their payroll liabilities to the Canadian Revenue Agency, and WSIB. Which could prove to be a bad decision for the long term operation of a business.

In all situations, its in the hands of the employer, not the employee, to determine whether the nature of the relationship is one of an employee and an employer or if the worker is self-employed. The type relationship determines the requirement for statutory withholdings, and the requirement for compliance with the related legislaton or if the worker is self employed, then GST regulations and legislation is required.

The Canadian Revenue Agency has established criteria to assist in determining the nature of the relationship; and in areas of question, the employer or an agent for the employer may submit a request for a ruling as to the status of a worker under The Canada Pension Plan and/or The Employment Insurance Act. In most cases, this will determine whether a worker's employment is pensionable and/ or insurable. The Canadian Revenue Agency will not issue a ruling for hypothetical or proposed employment situations, this is where professional advice from PayWiz.ca would come in handy, to assist with employment planning.

A simple mistake could end up costing an employer thousands in fines, penalties, interest, plus litigation costs. It pays to invest for advise up front, this ensures the future of your business remains bright!

For information be sure to contact me!

PayWiz

Certified Payroll Practitioners Keep Canada Paid!

2008-06-28T19:13:00.007-04:00

Everyday throughout the various Provinces and Territories, more than 1.5 million employers rely on Payroll Professionals to ensure their payroll is compliant with well over 185 Federal and Provincial legislation acts.

According to the Canadian Payroll Association, employers account for:

$700 billion in wages
$220 billion in statutory remittances
$77 billion in health and retirement benefits

Certified Payroll Practitioners can be proud to be a part of a community which contributes greatly to Canada's continued economic growth while helping employers meet their legislative requirements.

Today's employers require their Certified Payroll Practitioners to be confident with Canadian legislation to effectively communicate ever changing payroll issues to all stakeholders, including employees, executives, managers and government agencies.

It pays to hire a Certified Payroll Practitioner,

In a survey conducted by the Canadian Payroll Association, a full 89% of participants had been subject to a payroll audit and these were relatively evenly split between CRA audits at 49%, and Workers’ Compensation audits at 50%.

The result was that 57% of those who had been subject to a payroll audit changed their business processes. The good news is that only 27% of those organizations that had been audited incurred a fine or penalty. The bad news is that 65% of the organizations had been audited more than once.

There is no question that the incidence of audits by all branches of government is on the rise in the payroll profession. The federal government receives three-quarters of its revenue through statutory with holdings, and this startling figure underscores the importance of compliance in the payroll profession........it's always well recommended to consider all aspects of payroll when selecting a Payroll Outsource Service!

PayWiz

26th Annual Canadian Payroll Association Conference and Trade show

2008-06-15T14:49:00.006-04:00

The annual Canadian Payroll Association Conference and Trade show was held in the ever so beutifull city of Montreal, this past week. The CPA did an outstanding job, yet once again, and the industry was well represented in all aspects of it.

The trade show is always fun to walk around, I had the pleasure of bumping into old friends, aquintances and of course, meeting professionals new in the industry. It was also interesting to see the latest advances and trends within the industry.

Biometric time clocks had a strong prescence at the trade show this time around. This newest technology uses fingerprint and hand geometry technology, which can be used by any business that needs to track employee work time and attendance. A fingerprint time clock eliminates the problem of "buddy-punching/swiping" where a friend swipes or punches another employee in or out. Not only does a biometric time clock reduce work time fraud, but can also be used for security and access control at your facility.

For any questions or inquiries in the Biometric time clock industry, send me a quick email by clicking on Ask Paywiz found on the right hand panel.

Thank you

Official launch!!

2008-06-02T14:45:00.012-04:00

I would like to welcome everyone to Everything Payroll Blog! This an exciting avenue to offer visitors with useful payroll information, and more importantly for payroll professionals to have a single point of contact when they need additonal resources.
Visit our Blog every so often to keep up with Canadian Payroll Legislation, read articles on unique Business Professionals, business trends, or just to fullfil your curiousity on how Paywiz will continue to lead in Payroll Management, as we continue to evolve through time.

We were lucky enough to have met with a veteran in the branding world, Ed Roach. He took the time to truly understand Paywiz's vision, goals, which we hope is reflected in this blog .......thanks Ed!

Feel free to contact me by clicking on "Ask Paywiz" found on the right side Panel. I look forward to your suggestions, comments, or inquiries.

Thank you