diff --git a/docs/build/doctrees/2_compliance.doctree b/docs/build/doctrees/2_compliance.doctree index e481b8b..d4d8e63 100644 Binary files a/docs/build/doctrees/2_compliance.doctree and b/docs/build/doctrees/2_compliance.doctree differ diff --git a/docs/build/doctrees/environment.pickle b/docs/build/doctrees/environment.pickle index a4f1d34..1a30d5f 100644 Binary files a/docs/build/doctrees/environment.pickle and b/docs/build/doctrees/environment.pickle differ diff --git a/docs/build/html/2_compliance.html b/docs/build/html/2_compliance.html index aaf3ae2..380ab17 100644 --- a/docs/build/html/2_compliance.html +++ b/docs/build/html/2_compliance.html @@ -135,10 +135,12 @@ remuneration are considered insurable and, therefore, subject to EI premiums. All employers are required by law to deduct EI premiums from the insurable earnings paid to their employees, and remit these deductions, along with the employer’s portion, to the CRA. The employer’s portion is 1.4 times the employee’s portion.

-

Example:

+
+

EXAMPLE

Janet Frank has $20.00 in EI premiums deducted from her gross pay. Her employer, Northern Skies must contribute $28.00 ($20.00 x 1.4). A total of $48.00 in EI premiums must be remitted to the CRA.

+

EI premiums are the second statutory deduction to be withheld from an employee’s pay. Employers are also required to track the employee’s insurable earnings and insurable hours by pay period for reporting purposes, such as completing the Record of Employment for a @@ -146,10 +148,72 @@ terminated or inactive employee.

2.1.3. Income Tax

+

Income taxation began in Canada, and in many other countries, during World War I. In July +1917, the Government of Canada passed legislation which enabled the government to levy a +temporary tax on personal income. This tax was intended to help finance government +expenditures for World War I; however, it eventually became the basic tax on all incomes.

+

When income tax was first introduced, each person was responsible for paying their own +income tax directly to the federal government. In 1940, the federal government legislated +deductions at source, which meant that employers became responsible for withholding +income tax from remuneration paid to employees. Beginning January 1, 1962, all provinces +imposed personal income tax; prior to that date, only Québec imposed such a tax.

+

Income tax withholdings are calculated by applying a federal tax rate and a separate +provincial/territorial tax rate to the employee’s taxable income. The employee’s province of +employment determines which provincial/territorial tax rate to apply. The federal +government and all provinces and territories, except Québec, have the same definition of +taxable income.

+

All Canadian provinces/territories, except Québec, have entered into tax collection +agreements with the federal government. Under these agreements the CRA collects the +provincial/territorial income taxes on behalf of the provinces/territories. The CRA then +distributes the provincial/territorial income taxes it has collected through a series of transfer +payments to the provinces/territories. These transfer payments are based on the personal tax +returns filed by Canadian taxpayers.

+

As the federal government collects both the federal and the provincial/territorial portions of +tax from all employees working in a province/territory other than Québec, the two tax +withholdings, federal and provincial/territorial, are combined into one deduction amount. The +employee may only see one item Income Tax or Federal Income Tax listed on their pay +statement, however it is the total of two withholdings.

+

Québec collects its own provincial income tax. There are two separate income tax deductions +withheld from Québec employees — one for federal income tax and the other for Québec +provincial income tax. The federal income tax is remitted to the CRA and the Québec +provincial income tax is remitted to Revenu Québec (RQ). Québec employees will see +Federal Income Tax and Québec Income Tax listed separately on their pay statements. +RQ is discussed extensively in a later chapter.

2.2. Non-Compliance Penalties

+

If an organization fails to deduct and remit the amounts withheld from employees for CPP +contributions, EI premiums and income tax, it may be left in the position of having to pay +both the employer’s and the employee’s portion of deductions not taken, as well as penalties +and interest charges on the outstanding amount.

+

An employer who remits withholdings or deductions late is subject to the following +penalties:

+
+
    +

  • 3% will be applied to remittances that are 1 to 3 days late

    • +

  • 5% for remittances that are 4 or 5 days late

    • +

  • 7% for remittances that are 6 or 7 days late

    • +

  • 10% for remittances that are 8 or more days late

    • +
+
+

An employer who withholds the statutory deductions but does not remit them, or fails to +deduct the required deductions, will be subject to a 10% penalty for the first occurrence on +the amount that should have been deducted and remitted. This penalty may increase to 20% +for the second and each subsequent occurrence in the same calendar year if the failure was +made knowingly or under circumstances of gross negligence. Penalties will be applied to +amounts in excess of $500; however, in the case of wilful delay or deficiency, these penalties +can be levied on amounts of less than $500.

+

The Canada Revenue Agency (CRA) charges interest on any unpaid remittances and unpaid +penalties from the day the payment was due. The interest rate is determined every three +months, in accordance with the prescribed interest rates, and is available on the CRA +website.

+

As a payroll practitioner, you need to have a clear understanding of how and when to make +the required deductions and remittances to avoid these penalties and interest charges.

+

All monies deducted on behalf of the CRA are considered to be held “in trust” for the +Receiver General. The amount owed must be kept separate from the operating funds of the +organization. In the event of estate liquidation, assignment, receivership, or bankruptcy the +trust money for statutory deductions is still owed to the CRA.

2.3. Employment and Social Development Canada (ESDC)

@@ -181,6 +245,23 @@ terminated or inactive employee.

2.9. Employment Equity Act

+
+

2.10. Content Review

+
+
    +

  • Under the Canada Pension Plan Act and the Employment Insurance Act, the Canada Revenue Agency is responsible for determining: +- whether or not an individual’s employment is pensionable under the Canada Pension Plan Act or insurable under the Employment Insurance Act +- the types of earnings that are considered pensionable or insurable +- how many hours an insured person has in insurable employment +- the recovery of any debts owed as a result of an overpayment of Canada Pension Plan, Employment Insurance, or Old Age Security benefits

    • +

  • The Canada Revenue Agency is responsible for ensuring that Canada Pension Plan contributions and Employment Insurance premiums are deducted, remitted, and reported as required by legislation.

    • +

  • The Canada Revenue Agency collects provincial/territorial income taxes on behalf of all provinces/territories except Québec.

    • +

  • Revenu Québec collects the provincial income tax for the province of Québec.

    • +

  • Employers who remit withholdings or deductions late, withhold the statutory deductions but do not remit them, or fail to deduct the required deductions will be subject to penalties, which may increase on subsequent occurrences, plus interest charges.

    • +

  • All monies deducted on behalf of the Canada Revenue Agency are considered to be held “in trust” for the Receiver General.

    • +
+
+
@@ -215,6 +296,7 @@ terminated or inactive employee.

  • 2.7. Pension Benefits Standards Act
  • 2.8. Canadian Human Rights Act
  • 2.9. Employment Equity Act
    • +
  • 2.10. Content Review
    • diff --git a/docs/build/html/_sources/2_compliance.rst.txt b/docs/build/html/_sources/2_compliance.rst.txt index a192640..585bb97 100644 --- a/docs/build/html/_sources/2_compliance.rst.txt +++ b/docs/build/html/_sources/2_compliance.rst.txt @@ -99,11 +99,11 @@ All employers are required by law to deduct EI premiums from the insurable earni their employees, and remit these deductions, along with the employer's portion, to the CRA. The employer's portion is 1.4 times the employee's portion. -*Example:* +.. admonition:: EXAMPLE -Janet Frank has $20.00 in EI premiums deducted from her gross pay. Her employer, Northern -Skies must contribute $28.00 ($20.00 x 1.4). A total of $48.00 in EI premiums must be -remitted to the CRA. + Janet Frank has $20.00 in EI premiums deducted from her gross pay. Her employer, Northern + Skies must contribute $28.00 ($20.00 x 1.4). A total of $48.00 in EI premiums must be + remitted to the CRA. EI premiums are the second statutory deduction to be withheld from an employee's pay. Employers are also required to track the employee's insurable earnings and insurable hours @@ -113,9 +113,79 @@ terminated or inactive employee. Income Tax ---------- +Income taxation began in Canada, and in many other countries, during World War I. In July +1917, the Government of Canada passed legislation which enabled the government to levy a +temporary tax on personal income. This tax was intended to help finance government +expenditures for World War I; however, it eventually became the basic tax on all incomes. + +When income tax was first introduced, each person was responsible for paying their own +income tax directly to the federal government. In 1940, the federal government legislated +deductions at source, which meant that employers became responsible for withholding +income tax from remuneration paid to employees. Beginning January 1, 1962, all provinces +imposed personal income tax; prior to that date, only Québec imposed such a tax. + +Income tax withholdings are calculated by applying a federal tax rate and a separate +provincial/territorial tax rate to the employee's taxable income. The employee's province of +employment determines which provincial/territorial tax rate to apply. The federal +government and all provinces and territories, except Québec, have the same definition of +taxable income. + +All Canadian provinces/territories, except Québec, have entered into tax collection +agreements with the federal government. Under these agreements the CRA collects the +provincial/territorial income taxes on behalf of the provinces/territories. The CRA then +distributes the provincial/territorial income taxes it has collected through a series of transfer +payments to the provinces/territories. These transfer payments are based on the personal tax +returns filed by Canadian taxpayers. + +As the federal government collects both the federal and the provincial/territorial portions of +tax from all employees working in a province/territory other than Québec, the two tax +withholdings, federal and provincial/territorial, are combined into one deduction amount. The +employee may only see one item *Income Tax* or *Federal Income Tax* listed on their pay +statement, however it is the total of two withholdings. + +Québec collects its own provincial income tax. There are two separate income tax deductions +withheld from Québec employees — one for federal income tax and the other for Québec +provincial income tax. The federal income tax is remitted to the CRA and the Québec +provincial income tax is remitted to Revenu Québec (RQ). Québec employees will see +*Federal Income Tax* and *Québec Income Tax* listed separately on their pay statements. +RQ is discussed extensively in a later chapter. + Non-Compliance Penalties ~~~~~~~~~~~~~~~~~~~~~~~~~ +If an organization fails to deduct and remit the amounts withheld from employees for CPP +contributions, EI premiums and income tax, it may be left in the position of having to pay +both the employer's and the employee's portion of deductions not taken, as well as penalties +and interest charges on the outstanding amount. + +An employer who remits withholdings or deductions late is subject to the following +penalties: + - 3% will be applied to remittances that are 1 to 3 days late + - 5% for remittances that are 4 or 5 days late + - 7% for remittances that are 6 or 7 days late + - 10% for remittances that are 8 or more days late + +An employer who withholds the statutory deductions but does not remit them, or fails to +deduct the required deductions, will be subject to a 10% penalty for the first occurrence on +the amount that should have been deducted and remitted. This penalty may increase to 20% +for the second and each subsequent occurrence in the same calendar year if the failure was +made knowingly or under circumstances of gross negligence. Penalties will be applied to +amounts in excess of $500; however, in the case of wilful delay or deficiency, these penalties +can be levied on amounts of less than $500. + +The Canada Revenue Agency (CRA) charges interest on any unpaid remittances and unpaid +penalties from the day the payment was due. The interest rate is determined every three +months, in accordance with the prescribed interest rates, and is available on the CRA +website. + +As a payroll practitioner, you need to have a clear understanding of how and when to make +the required deductions and remittances to avoid these penalties and interest charges. + +All monies deducted on behalf of the CRA are considered to be held “in trust” for the +Receiver General. The amount owed must be kept separate from the operating funds of the +organization. In the event of estate liquidation, assignment, receivership, or bankruptcy the +trust money for statutory deductions is still owed to the CRA. + Employment and Social Development Canada (ESDC) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ @@ -144,4 +214,23 @@ Canadian Human Rights Act ~~~~~~~~~~~~~~~~~~~~~~~~~~ Employment Equity Act -~~~~~~~~~~~~~~~~~~~~~~~~~~ \ No newline at end of file +~~~~~~~~~~~~~~~~~~~~~~~~~~ + +Content Review +~~~~~~~~~~~~~~~~ + + - Under the Canada Pension Plan Act and the Employment Insurance Act, the Canada Revenue Agency is responsible for determining: + - whether or not an individual's employment is pensionable under the Canada Pension Plan Act or insurable under the Employment Insurance Act + - the types of earnings that are considered pensionable or insurable + - how many hours an insured person has in insurable employment + - the recovery of any debts owed as a result of an overpayment of Canada Pension Plan, Employment Insurance, or Old Age Security benefits + + - The Canada Revenue Agency is responsible for ensuring that Canada Pension Plan contributions and Employment Insurance premiums are deducted, remitted, and reported as required by legislation. + + - The Canada Revenue Agency collects provincial/territorial income taxes on behalf of all provinces/territories except Québec. + + - Revenu Québec collects the provincial income tax for the province of Québec. + + - Employers who remit withholdings or deductions late, withhold the statutory deductions but do not remit them, or fail to deduct the required deductions will be subject to penalties, which may increase on subsequent occurrences, plus interest charges. + + - All monies deducted on behalf of the Canada Revenue Agency are considered to be held “in trust” for the Receiver General. \ No newline at end of file diff --git a/docs/build/html/index.html b/docs/build/html/index.html index 06f09f5..9057b8a 100644 --- a/docs/build/html/index.html +++ b/docs/build/html/index.html @@ -91,6 +91,7 @@ to confidently perform essential payroll functions encountered in day-to-day ope
  • 2.7. Pension Benefits Standards Act
  • 2.8. Canadian Human Rights Act
  • 2.9. Employment Equity Act
    • +
  • 2.10. Content Review
  • 3. EMPLOYEE vs. INDEPENDENT CONTRACTOR
  • @@ -1598,16 +1603,16 @@ All employers are required by law to deduct EI premiums from the insurable earni their employees, and remit these deductions, along with the employer’s portion, to the CRA. The employer’s portion is 1.4 times the employee’s portion.

    -

    - - Example: - -

    -

    - Janet Frank has $20.00 in EI premiums deducted from her gross pay. Her employer, Northern +

    +

    + EXAMPLE +

    +

    + Janet Frank has $20.00 in EI premiums deducted from her gross pay. Her employer, Northern Skies must contribute $28.00 ($20.00 x 1.4). A total of $48.00 in EI premiums must be remitted to the CRA. -

    +

    +

    EI premiums are the second statutory deduction to be withheld from an employee’s pay. Employers are also required to track the employee’s insurable earnings and insurable hours @@ -1622,6 +1627,64 @@ terminated or inactive employee. ¶ +

    + Income taxation began in Canada, and in many other countries, during World War I. In July +1917, the Government of Canada passed legislation which enabled the government to levy a +temporary tax on personal income. This tax was intended to help finance government +expenditures for World War I; however, it eventually became the basic tax on all incomes. +

    +

    + When income tax was first introduced, each person was responsible for paying their own +income tax directly to the federal government. In 1940, the federal government legislated +deductions at source, which meant that employers became responsible for withholding +income tax from remuneration paid to employees. Beginning January 1, 1962, all provinces +imposed personal income tax; prior to that date, only Québec imposed such a tax. +

    +

    + Income tax withholdings are calculated by applying a federal tax rate and a separate +provincial/territorial tax rate to the employee’s taxable income. The employee’s province of +employment determines which provincial/territorial tax rate to apply. The federal +government and all provinces and territories, except Québec, have the same definition of +taxable income. +

    +

    + All Canadian provinces/territories, except Québec, have entered into tax collection +agreements with the federal government. Under these agreements the CRA collects the +provincial/territorial income taxes on behalf of the provinces/territories. The CRA then +distributes the provincial/territorial income taxes it has collected through a series of transfer +payments to the provinces/territories. These transfer payments are based on the personal tax +returns filed by Canadian taxpayers. +

    +

    + As the federal government collects both the federal and the provincial/territorial portions of +tax from all employees working in a province/territory other than Québec, the two tax +withholdings, federal and provincial/territorial, are combined into one deduction amount. The +employee may only see one item + + Income Tax + + or + + Federal Income Tax + + listed on their pay +statement, however it is the total of two withholdings. +

    +

    + Québec collects its own provincial income tax. There are two separate income tax deductions +withheld from Québec employees — one for federal income tax and the other for Québec +provincial income tax. The federal income tax is remitted to the CRA and the Québec +provincial income tax is remitted to Revenu Québec (RQ). Québec employees will see + + Federal Income Tax + + and + + Québec Income Tax + + listed separately on their pay statements. +RQ is discussed extensively in a later chapter. +

    @@ -1631,6 +1694,67 @@ terminated or inactive employee. ¶ +

    + If an organization fails to deduct and remit the amounts withheld from employees for CPP +contributions, EI premiums and income tax, it may be left in the position of having to pay +both the employer’s and the employee’s portion of deductions not taken, as well as penalties +and interest charges on the outstanding amount. +

    +

    + An employer who remits withholdings or deductions late is subject to the following +penalties: +

    +
    +
    +
      +
    • +

      + 3% will be applied to remittances that are 1 to 3 days late +

      +
      • +
    • +

      + 5% for remittances that are 4 or 5 days late +

      +
      • +
    • +

      + 7% for remittances that are 6 or 7 days late +

      +
      • +
    • +

      + 10% for remittances that are 8 or more days late +

      +
      • +
    +
    +
    +

    + An employer who withholds the statutory deductions but does not remit them, or fails to +deduct the required deductions, will be subject to a 10% penalty for the first occurrence on +the amount that should have been deducted and remitted. This penalty may increase to 20% +for the second and each subsequent occurrence in the same calendar year if the failure was +made knowingly or under circumstances of gross negligence. Penalties will be applied to +amounts in excess of $500; however, in the case of wilful delay or deficiency, these penalties +can be levied on amounts of less than $500. +

    +

    + The Canada Revenue Agency (CRA) charges interest on any unpaid remittances and unpaid +penalties from the day the payment was due. The interest rate is determined every three +months, in accordance with the prescribed interest rates, and is available on the CRA +website. +

    +

    + As a payroll practitioner, you need to have a clear understanding of how and when to make +the required deductions and remittances to avoid these penalties and interest charges. +

    +

    + All monies deducted on behalf of the CRA are considered to be held “in trust” for the +Receiver General. The amount owed must be kept separate from the operating funds of the +organization. In the event of estate liquidation, assignment, receivership, or bankruptcy the +trust money for statutory deductions is still owed to the CRA. +

    @@ -1712,6 +1836,54 @@ terminated or inactive employee.

    +
    +

    + Content Review + + ¶ + +

    +
    +
    +
      +
    • +

      + Under the Canada Pension Plan Act and the Employment Insurance Act, the Canada Revenue Agency is responsible for determining: +- whether or not an individual’s employment is pensionable under the Canada Pension Plan Act or insurable under the Employment Insurance Act +- the types of earnings that are considered pensionable or insurable +- how many hours an insured person has in insurable employment +- the recovery of any debts owed as a result of an overpayment of Canada Pension Plan, Employment Insurance, or Old Age Security benefits +

      +
      • +
    • +

      + The Canada Revenue Agency is responsible for ensuring that Canada Pension Plan contributions and Employment Insurance premiums are deducted, remitted, and reported as required by legislation. +

      +
      • +
    • +

      + The Canada Revenue Agency collects provincial/territorial income taxes on behalf of all provinces/territories except Québec. +

      +
      • +
    • +

      + Revenu Québec collects the provincial income tax for the province of Québec. +

      +
      • +
    • +

      + Employers who remit withholdings or deductions late, withhold the statutory deductions but do not remit them, or fail to deduct the required deductions will be subject to penalties, which may increase on subsequent occurrences, plus interest charges. +

      +
      • +
    • +

      + All monies deducted on behalf of the Canada Revenue Agency are considered to be held “in trust” for the Receiver General. +

      +
      • +
    +
    +
    +