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====================================
EMPLOYEE vs. INDEPENDENT CONTRACTOR
====================================

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@@ -23,6 +23,7 @@ to confidently perform essential payroll functions encountered in day-to-day ope
preface
introduction
compliance
contracts
cpp-and-ei
compensation
onboarding_employee

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<meta charset="utf-8" />
<meta name="viewport" content="width=device-width, initial-scale=1.0" /><meta name="viewport" content="width=device-width, initial-scale=1" />
<title>7. CALCULATING NET EARNINGS &#8212; 🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</title>
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@@ -25,13 +25,13 @@
<a href="genindex.html" title="General Index"
accesskey="I">index</a></li>
<li class="right" >
<a href="onboarding_employee.html" title="8. OBNOARDING EMPLOYEE"
<a href="onboarding_employee.html" title="9. OBNOARDING EMPLOYEE"
accesskey="N">next</a> |</li>
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<li class="nav-item nav-item-this"><a href=""><span class="section-number">7. </span>CALCULATING NET EARNINGS</a></li>
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</ul>
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@@ -41,18 +41,18 @@
<div class="body" role="main">
<section id="calculating-net-earnings">
<h1><span class="section-number">7. </span>CALCULATING NET EARNINGS<a class="headerlink" href="#calculating-net-earnings" title="Link to this heading"></a></h1>
<h1><span class="section-number">8. </span>CALCULATING NET EARNINGS<a class="headerlink" href="#calculating-net-earnings" title="Link to this heading"></a></h1>
<section id="employment-income">
<h2><span class="section-number">7.1. </span>Employment Income<a class="headerlink" href="#employment-income" title="Link to this heading"></a></h2>
<h2><span class="section-number">8.1. </span>Employment Income<a class="headerlink" href="#employment-income" title="Link to this heading"></a></h2>
</section>
<section id="allowances">
<h2><span class="section-number">7.2. </span>Allowances<a class="headerlink" href="#allowances" title="Link to this heading"></a></h2>
<h2><span class="section-number">8.2. </span>Allowances<a class="headerlink" href="#allowances" title="Link to this heading"></a></h2>
</section>
<section id="expenses">
<h2><span class="section-number">7.3. </span>Expenses<a class="headerlink" href="#expenses" title="Link to this heading"></a></h2>
<h2><span class="section-number">8.3. </span>Expenses<a class="headerlink" href="#expenses" title="Link to this heading"></a></h2>
</section>
<section id="benefits">
<h2><span class="section-number">7.4. </span>Benefits<a class="headerlink" href="#benefits" title="Link to this heading"></a></h2>
<h2><span class="section-number">8.4. </span>Benefits<a class="headerlink" href="#benefits" title="Link to this heading"></a></h2>
</section>
</section>
@@ -66,11 +66,11 @@
<div>
<h3><a href="index.html">Table of Contents</a></h3>
<ul>
<li><a class="reference internal" href="#">7. CALCULATING NET EARNINGS</a><ul>
<li><a class="reference internal" href="#employment-income">7.1. Employment Income</a></li>
<li><a class="reference internal" href="#allowances">7.2. Allowances</a></li>
<li><a class="reference internal" href="#expenses">7.3. Expenses</a></li>
<li><a class="reference internal" href="#benefits">7.4. Benefits</a></li>
<li><a class="reference internal" href="#">8. CALCULATING NET EARNINGS</a><ul>
<li><a class="reference internal" href="#employment-income">8.1. Employment Income</a></li>
<li><a class="reference internal" href="#allowances">8.2. Allowances</a></li>
<li><a class="reference internal" href="#expenses">8.3. Expenses</a></li>
<li><a class="reference internal" href="#benefits">8.4. Benefits</a></li>
</ul>
</li>
</ul>
@@ -79,12 +79,12 @@
<div>
<h4>Previous topic</h4>
<p class="topless"><a href="cpp-and-ei.html"
title="previous chapter"><span class="section-number">4. </span>Canada Pension Plan</a></p>
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</div>
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@@ -114,13 +114,13 @@
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<section id="employee-vs-independent-contractor">
<h1><span class="section-number">4. </span>EMPLOYEE vs. INDEPENDENT CONTRACTOR<a class="headerlink" href="#employee-vs-independent-contractor" title="Link to this heading"></a></h1>
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@@ -25,13 +25,13 @@
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<a href="compensation.html" title="7. CALCULATING NET EARNINGS"
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<li class="nav-item nav-item-this"><a href=""><span class="section-number">5. </span>Canada Pension Plan</a></li>
</ul>
</div>
@@ -96,7 +96,7 @@ underscoring their legal significance and the employers obligation to ensure
</ol>
</div></blockquote>
<section id="canada-pension-plan">
<h1><span class="section-number">4. </span>Canada Pension Plan<a class="headerlink" href="#canada-pension-plan" title="Link to this heading"></a></h1>
<h1><span class="section-number">5. </span>Canada Pension Plan<a class="headerlink" href="#canada-pension-plan" title="Link to this heading"></a></h1>
<p>Objective of this section is to enable you to identify the following Canada Pension Plan components:</p>
<blockquote>
<div><ul class="simple">
@@ -137,7 +137,7 @@ were based. Individuals can apply for their CPP retirement pension when they tur
<strong>Québec Pension Plan</strong> (QPP). The two plans work together to ensure that all contributors are protected, no matter where the
individual lives. Québec Pension Plan requirements will be covered later in this course.</p>
<section id="who-must-contribute-to-the-canada-pension-plan">
<h2><span class="section-number">4.1. </span>Who Must Contribute to the Canada Pension Plan<a class="headerlink" href="#who-must-contribute-to-the-canada-pension-plan" title="Link to this heading"></a></h2>
<h2><span class="section-number">5.1. </span>Who Must Contribute to the Canada Pension Plan<a class="headerlink" href="#who-must-contribute-to-the-canada-pension-plan" title="Link to this heading"></a></h2>
<p>The CPP is a <strong>contributory plan</strong>. This means that all costs are covered by the financial contributions paid by employees,
employers and self-employed workers, and from revenue earned on CPP investments. The CPP is not funded through general tax
revenues.</p>
@@ -188,7 +188,7 @@ to CPP contributions:</p>
</section>
</section>
<section id="employment-insurance">
<h1><span class="section-number">5. </span>Employment Insurance<a class="headerlink" href="#employment-insurance" title="Link to this heading"></a></h1>
<h1><span class="section-number">6. </span>Employment Insurance<a class="headerlink" href="#employment-insurance" title="Link to this heading"></a></h1>
<p>Objective of this section is to enable you to identify the following Employment Insurance components:</p>
<blockquote>
<div><ul class="simple">
@@ -213,7 +213,7 @@ employers, employees, or both. Although this chapter focuses specifically on the
information about private insurance plans will be covered in the later chapters.</p>
</section>
<section id="record-of-employment">
<h1><span class="section-number">6. </span>Record of Employment<a class="headerlink" href="#record-of-employment" title="Link to this heading"></a></h1>
<h1><span class="section-number">7. </span>Record of Employment<a class="headerlink" href="#record-of-employment" title="Link to this heading"></a></h1>
<p>The <strong>Record of Employment</strong> (ROE) is the form used by Service Canada to determine an individuals qualification to collect
Employment Insurance benefits when their employment is interrupted, how much the benefit will be and how long they will
collect it. As payroll is responsible for completing the ROE, the form will be illustrated in this chapter, along with an
@@ -230,24 +230,24 @@ explanation of what payroll information must be tracked for ROE reporting purpos
<div>
<h3><a href="index.html">Table of Contents</a></h3>
<ul>
<li><a class="reference internal" href="#">4. Canada Pension Plan</a><ul>
<li><a class="reference internal" href="#who-must-contribute-to-the-canada-pension-plan">4.1. Who Must Contribute to the Canada Pension Plan</a></li>
<li><a class="reference internal" href="#">5. Canada Pension Plan</a><ul>
<li><a class="reference internal" href="#who-must-contribute-to-the-canada-pension-plan">5.1. Who Must Contribute to the Canada Pension Plan</a></li>
</ul>
</li>
<li><a class="reference internal" href="#employment-insurance">5. Employment Insurance</a></li>
<li><a class="reference internal" href="#record-of-employment">6. Record of Employment</a></li>
<li><a class="reference internal" href="#employment-insurance">6. Employment Insurance</a></li>
<li><a class="reference internal" href="#record-of-employment">7. Record of Employment</a></li>
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@@ -277,13 +277,13 @@ explanation of what payroll information must be tracked for ROE reporting purpos
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@@ -37,7 +37,7 @@
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<h1><span class="section-number">15. </span>Errors and Errata<a class="headerlink" href="#errors-and-errata" title="Link to this heading"></a></h1>
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@@ -50,7 +50,7 @@
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@@ -80,10 +80,10 @@
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@@ -98,65 +98,66 @@ to confidently perform essential payroll functions encountered in day-to-day ope
<li class="toctree-l2"><a class="reference internal" href="compliance.html#review-questions">3.8. Review Questions</a></li>
</ul>
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<li class="toctree-l1"><a class="reference internal" href="cpp-and-ei.html">4. Canada Pension Plan</a><ul>
<li class="toctree-l2"><a class="reference internal" href="cpp-and-ei.html#who-must-contribute-to-the-canada-pension-plan">4.1. Who Must Contribute to the Canada Pension Plan</a></li>
<li class="toctree-l1"><a class="reference internal" href="contracts.html">4. EMPLOYEE vs. INDEPENDENT CONTRACTOR</a></li>
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<li class="toctree-l2"><a class="reference internal" href="cpp-and-ei.html#who-must-contribute-to-the-canada-pension-plan">5.1. Who Must Contribute to the Canada Pension Plan</a></li>
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</li>
<li class="toctree-l1"><a class="reference internal" href="cpp-and-ei.html#employment-insurance">5. Employment Insurance</a></li>
<li class="toctree-l1"><a class="reference internal" href="cpp-and-ei.html#record-of-employment">6. Record of Employment</a></li>
<li class="toctree-l1"><a class="reference internal" href="compensation.html">7. CALCULATING NET EARNINGS</a><ul>
<li class="toctree-l2"><a class="reference internal" href="compensation.html#employment-income">7.1. Employment Income</a></li>
<li class="toctree-l2"><a class="reference internal" href="compensation.html#allowances">7.2. Allowances</a></li>
<li class="toctree-l2"><a class="reference internal" href="compensation.html#expenses">7.3. Expenses</a></li>
<li class="toctree-l2"><a class="reference internal" href="compensation.html#benefits">7.4. Benefits</a></li>
<li class="toctree-l1"><a class="reference internal" href="cpp-and-ei.html#employment-insurance">6. Employment Insurance</a></li>
<li class="toctree-l1"><a class="reference internal" href="cpp-and-ei.html#record-of-employment">7. Record of Employment</a></li>
<li class="toctree-l1"><a class="reference internal" href="compensation.html">8. CALCULATING NET EARNINGS</a><ul>
<li class="toctree-l2"><a class="reference internal" href="compensation.html#employment-income">8.1. Employment Income</a></li>
<li class="toctree-l2"><a class="reference internal" href="compensation.html#allowances">8.2. Allowances</a></li>
<li class="toctree-l2"><a class="reference internal" href="compensation.html#expenses">8.3. Expenses</a></li>
<li class="toctree-l2"><a class="reference internal" href="compensation.html#benefits">8.4. Benefits</a></li>
</ul>
</li>
<li class="toctree-l1"><a class="reference internal" href="onboarding_employee.html">8. OBNOARDING EMPLOYEE</a><ul>
<li class="toctree-l2"><a class="reference internal" href="onboarding_employee.html#internal-forms">8.1. Internal Forms</a><ul>
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#authorization-for-hiring">8.1.1. Authorization for Hiring</a></li>
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#union-membership">8.1.2. Union Membership</a></li>
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#benefit-enrollment-forms">8.1.3. Benefit Enrollment Forms</a></li>
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#confidentiality-agreement">8.1.4. Confidentiality Agreement</a></li>
<li class="toctree-l1"><a class="reference internal" href="onboarding_employee.html">9. OBNOARDING EMPLOYEE</a><ul>
<li class="toctree-l2"><a class="reference internal" href="onboarding_employee.html#internal-forms">9.1. Internal Forms</a><ul>
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#authorization-for-hiring">9.1.1. Authorization for Hiring</a></li>
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#union-membership">9.1.2. Union Membership</a></li>
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#benefit-enrollment-forms">9.1.3. Benefit Enrollment Forms</a></li>
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#confidentiality-agreement">9.1.4. Confidentiality Agreement</a></li>
</ul>
</li>
<li class="toctree-l2"><a class="reference internal" href="onboarding_employee.html#required-federal-and-provincial-territorial-forms">8.2. Required Federal and Provincial/Territorial Forms</a><ul>
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#tax-credits-td1">8.2.1. Tax Credits (TD1)</a></li>
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#tax-credits-tp-1015-3-v-quebec">8.2.2. Tax Credits (TP-1015.3-V - Québec)</a></li>
<li class="toctree-l2"><a class="reference internal" href="onboarding_employee.html#required-federal-and-provincial-territorial-forms">9.2. Required Federal and Provincial/Territorial Forms</a><ul>
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#tax-credits-td1">9.2.1. Tax Credits (TD1)</a></li>
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#tax-credits-tp-1015-3-v-quebec">9.2.2. Tax Credits (TP-1015.3-V - Québec)</a></li>
</ul>
</li>
<li class="toctree-l2"><a class="reference internal" href="onboarding_employee.html#entering-employee-information-into-sage50">8.3. Entering Employee Information into Sage50</a><ul>
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#review-questions">8.3.1. Review Questions</a></li>
<li class="toctree-l2"><a class="reference internal" href="onboarding_employee.html#entering-employee-information-into-sage50">9.3. Entering Employee Information into Sage50</a><ul>
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#review-questions">9.3.1. Review Questions</a></li>
</ul>
</li>
<li class="toctree-l2"><a class="reference internal" href="onboarding_employee.html#content-review-highlights">8.4. Content Review Highlights</a></li>
<li class="toctree-l2"><a class="reference internal" href="onboarding_employee.html#review-questions-sample">8.5. Review Questions (Sample)</a></li>
<li class="toctree-l2"><a class="reference internal" href="onboarding_employee.html#example-evaluations">8.6. Example Evaluations</a></li>
<li class="toctree-l2"><a class="reference internal" href="onboarding_employee.html#content-review-highlights">9.4. Content Review Highlights</a></li>
<li class="toctree-l2"><a class="reference internal" href="onboarding_employee.html#review-questions-sample">9.5. Review Questions (Sample)</a></li>
<li class="toctree-l2"><a class="reference internal" href="onboarding_employee.html#example-evaluations">9.6. Example Evaluations</a></li>
</ul>
</li>
<li class="toctree-l1"><a class="reference internal" href="payroll_accounting.html">9. Payroll Accounting</a><ul>
<li class="toctree-l2"><a class="reference internal" href="payroll_accounting.html#journal-entries">9.1. Journal Entries</a><ul>
<li class="toctree-l3"><a class="reference internal" href="payroll_accounting.html#accounting-recap">9.1.1. Accounting Recap</a></li>
<li class="toctree-l3"><a class="reference internal" href="payroll_accounting.html#id1">9.1.2. Journal Entries</a></li>
<li class="toctree-l1"><a class="reference internal" href="payroll_accounting.html">10. Payroll Accounting</a><ul>
<li class="toctree-l2"><a class="reference internal" href="payroll_accounting.html#journal-entries">10.1. Journal Entries</a><ul>
<li class="toctree-l3"><a class="reference internal" href="payroll_accounting.html#accounting-recap">10.1.1. Accounting Recap</a></li>
<li class="toctree-l3"><a class="reference internal" href="payroll_accounting.html#id1">10.1.2. Journal Entries</a></li>
</ul>
</li>
</ul>
</li>
<li class="toctree-l1"><a class="reference internal" href="review_questions.html">10. REVIEW QUESTIONS</a><ul>
<li class="toctree-l2"><a class="reference internal" href="review_questions.html#new-employee-information">10.1. New Employee Information</a></li>
<li class="toctree-l1"><a class="reference internal" href="review_questions.html">11. REVIEW QUESTIONS</a><ul>
<li class="toctree-l2"><a class="reference internal" href="review_questions.html#new-employee-information">11.1. New Employee Information</a></li>
</ul>
</li>
<li class="toctree-l1"><a class="reference internal" href="terminology.html">11. TERMINOLOGY</a><ul>
<li class="toctree-l2"><a class="reference internal" href="terminology.html#pensionable-earnings">11.1. Pensionable Earnings</a></li>
<li class="toctree-l2"><a class="reference internal" href="terminology.html#insurable-earnings">11.2. Insurable Earnings</a></li>
<li class="toctree-l1"><a class="reference internal" href="terminology.html">12. TERMINOLOGY</a><ul>
<li class="toctree-l2"><a class="reference internal" href="terminology.html#pensionable-earnings">12.1. Pensionable Earnings</a></li>
<li class="toctree-l2"><a class="reference internal" href="terminology.html#insurable-earnings">12.2. Insurable Earnings</a></li>
</ul>
</li>
<li class="toctree-l1"><a class="reference internal" href="rates_2025.html">12. RATES FOR 2025</a><ul>
<li class="toctree-l2"><a class="reference internal" href="rates_2025.html#canada-quebec-pension-plan-cpp-qpp">12.1. CANADA / QUEBEC PENSION PLAN (CPP / QPP)</a></li>
<li class="toctree-l2"><a class="reference internal" href="rates_2025.html#cpp2-contribution-rates-maximums">12.2. CPP2 CONTRIBUTION RATES MAXIMUMS</a></li>
<li class="toctree-l1"><a class="reference internal" href="rates_2025.html">13. RATES FOR 2025</a><ul>
<li class="toctree-l2"><a class="reference internal" href="rates_2025.html#canada-quebec-pension-plan-cpp-qpp">13.1. CANADA / QUEBEC PENSION PLAN (CPP / QPP)</a></li>
<li class="toctree-l2"><a class="reference internal" href="rates_2025.html#cpp2-contribution-rates-maximums">13.2. CPP2 CONTRIBUTION RATES MAXIMUMS</a></li>
</ul>
</li>
<li class="toctree-l1"><a class="reference internal" href="references.html">13. REFERENCES</a></li>
<li class="toctree-l1"><a class="reference internal" href="errata.html">14. Errors and Errata</a></li>
<li class="toctree-l1"><a class="reference internal" href="references.html">14. REFERENCES</a></li>
<li class="toctree-l1"><a class="reference internal" href="errata.html">15. Errors and Errata</a></li>
</ul>
</div>
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@@ -5,7 +5,7 @@
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<li class="nav-item nav-item-this"><a href=""><span class="section-number">8. </span>OBNOARDING EMPLOYEE</a></li>
<li class="nav-item nav-item-this"><a href=""><span class="section-number">9. </span>OBNOARDING EMPLOYEE</a></li>
</ul>
</div>
@@ -41,7 +41,7 @@
<div class="body" role="main">
<section id="obnoarding-employee">
<h1><span class="section-number">8. </span>OBNOARDING EMPLOYEE<a class="headerlink" href="#obnoarding-employee" title="Link to this heading"></a></h1>
<h1><span class="section-number">9. </span>OBNOARDING EMPLOYEE<a class="headerlink" href="#obnoarding-employee" title="Link to this heading"></a></h1>
<p>In the context of Canadian payroll administration, onboarding an employee refers to the formal process of integrating a new hire into
both the organizational and payroll systems. It ensures that the employee is properly registered, legally compliant, and ready to be paid
accurately and on time.</p>
@@ -101,7 +101,7 @@ accurately and on time.</p>
- Net pay</p></li>
</ul>
<section id="internal-forms">
<h2><span class="section-number">8.1. </span>Internal Forms<a class="headerlink" href="#internal-forms" title="Link to this heading"></a></h2>
<h2><span class="section-number">9.1. </span>Internal Forms<a class="headerlink" href="#internal-forms" title="Link to this heading"></a></h2>
<p>Typical commencement package forms include:</p>
<ul class="simple">
<li><p>Authorization for hiring</p></li>
@@ -111,7 +111,7 @@ accurately and on time.</p>
<li><p>Confidentiality agreement</p></li>
</ul>
<section id="authorization-for-hiring">
<h3><span class="section-number">8.1.1. </span>Authorization for Hiring<a class="headerlink" href="#authorization-for-hiring" title="Link to this heading"></a></h3>
<h3><span class="section-number">9.1.1. </span>Authorization for Hiring<a class="headerlink" href="#authorization-for-hiring" title="Link to this heading"></a></h3>
<p>This internal document includes:</p>
<ul class="simple">
<li><p>New employees basic info</p></li>
@@ -122,7 +122,7 @@ accurately and on time.</p>
<p><strong>Important:</strong> Employer must obtain a valid SIN. A SIN starting with 9 must have a valid expiry date and associated work permit.</p>
</section>
<section id="union-membership">
<h3><span class="section-number">8.1.2. </span>Union Membership<a class="headerlink" href="#union-membership" title="Link to this heading"></a></h3>
<h3><span class="section-number">9.1.2. </span>Union Membership<a class="headerlink" href="#union-membership" title="Link to this heading"></a></h3>
<p>For unionized workplaces:</p>
<ul class="simple">
<li><p>Amount of union dues to be deducted</p></li>
@@ -131,7 +131,7 @@ accurately and on time.</p>
</ul>
</section>
<section id="benefit-enrollment-forms">
<h3><span class="section-number">8.1.3. </span>Benefit Enrollment Forms<a class="headerlink" href="#benefit-enrollment-forms" title="Link to this heading"></a></h3>
<h3><span class="section-number">9.1.3. </span>Benefit Enrollment Forms<a class="headerlink" href="#benefit-enrollment-forms" title="Link to this heading"></a></h3>
<p>Forms cover group insurance and pension plans:</p>
<ul class="simple">
<li><p>Employee indicates coverage type</p></li>
@@ -139,7 +139,7 @@ accurately and on time.</p>
</ul>
</section>
<section id="confidentiality-agreement">
<h3><span class="section-number">8.1.4. </span>Confidentiality Agreement<a class="headerlink" href="#confidentiality-agreement" title="Link to this heading"></a></h3>
<h3><span class="section-number">9.1.4. </span>Confidentiality Agreement<a class="headerlink" href="#confidentiality-agreement" title="Link to this heading"></a></h3>
<p>A legally binding agreement protecting sensitive company info:</p>
<ul class="simple">
<li><p>Defines proprietary data</p></li>
@@ -148,7 +148,7 @@ accurately and on time.</p>
</section>
</section>
<section id="required-federal-and-provincial-territorial-forms">
<h2><span class="section-number">8.2. </span>Required Federal and Provincial/Territorial Forms<a class="headerlink" href="#required-federal-and-provincial-territorial-forms" title="Link to this heading"></a></h2>
<h2><span class="section-number">9.2. </span>Required Federal and Provincial/Territorial Forms<a class="headerlink" href="#required-federal-and-provincial-territorial-forms" title="Link to this heading"></a></h2>
<p><strong>Purpose:</strong> Determine correct income tax withholdings.</p>
<p>Forms:</p>
<ul class="simple">
@@ -169,7 +169,7 @@ accurately and on time.</p>
<li><p>Social Insurance Number</p></li>
</ul>
<section id="tax-credits-td1">
<h3><span class="section-number">8.2.1. </span>Tax Credits (TD1)<a class="headerlink" href="#tax-credits-td1" title="Link to this heading"></a></h3>
<h3><span class="section-number">9.2.1. </span>Tax Credits (TD1)<a class="headerlink" href="#tax-credits-td1" title="Link to this heading"></a></h3>
<ol class="arabic simple">
<li><p>Basic personal amount</p></li>
<li><p>Canada caregiver (infirm children)</p></li>
@@ -192,7 +192,7 @@ accurately and on time.</p>
</ul>
</section>
<section id="tax-credits-tp-1015-3-v-quebec">
<h3><span class="section-number">8.2.2. </span>Tax Credits (TP-1015.3-V - Québec)<a class="headerlink" href="#tax-credits-tp-1015-3-v-quebec" title="Link to this heading"></a></h3>
<h3><span class="section-number">9.2.2. </span>Tax Credits (TP-1015.3-V - Québec)<a class="headerlink" href="#tax-credits-tp-1015-3-v-quebec" title="Link to this heading"></a></h3>
<ul class="simple">
<li><p>Basic amount</p></li>
<li><p>Transfer from spouse</p></li>
@@ -209,7 +209,7 @@ accurately and on time.</p>
</section>
</section>
<section id="entering-employee-information-into-sage50">
<h2><span class="section-number">8.3. </span>Entering Employee Information into Sage50<a class="headerlink" href="#entering-employee-information-into-sage50" title="Link to this heading"></a></h2>
<h2><span class="section-number">9.3. </span>Entering Employee Information into Sage50<a class="headerlink" href="#entering-employee-information-into-sage50" title="Link to this heading"></a></h2>
<p>To enter a new employee into the Sage 50 Payroll module (Canada edition), start by navigating to the Employees &amp; Payroll section in the
Home window. Right-click the Employees icon and choose “Add Employee” to begin creating employees record. Input the employees full legal
name. Then, proceed to fill in the personal and payroll details across several tabs: the Personal tab for birth date and contact info, the Taxes tab to select the appropriate provincial
@@ -233,7 +233,7 @@ regulatory standards.</p>
<img alt="_images/onboarding-employee_005.png" src="_images/onboarding-employee_005.png" />
<img alt="_images/onboarding-employee_006.png" src="_images/onboarding-employee_006.png" />
<section id="review-questions">
<h3><span class="section-number">8.3.1. </span>Review Questions<a class="headerlink" href="#review-questions" title="Link to this heading"></a></h3>
<h3><span class="section-number">9.3.1. </span>Review Questions<a class="headerlink" href="#review-questions" title="Link to this heading"></a></h3>
<ol class="arabic">
<li><p>What is the significance of accurately entering the “Date Hired” field when setting up a new employee profile in Sage 50?</p>
<p><em>Accurately entering the “Date Hired” in Sage 50 is a critical step in ensuring the integrity of payroll records and overall HR
@@ -262,7 +262,7 @@ Payroll department holds this information, it cannot be disclosed to supervisors
</section>
</section>
<section id="content-review-highlights">
<h2><span class="section-number">8.4. </span>Content Review Highlights<a class="headerlink" href="#content-review-highlights" title="Link to this heading"></a></h2>
<h2><span class="section-number">9.4. </span>Content Review Highlights<a class="headerlink" href="#content-review-highlights" title="Link to this heading"></a></h2>
<ul class="simple">
<li><p>Consent is required for personal info collection</p></li>
<li><p>TD1 and TP-1015.3-V are used to calculate source deductions</p></li>
@@ -271,7 +271,7 @@ Payroll department holds this information, it cannot be disclosed to supervisors
</ul>
</section>
<section id="review-questions-sample">
<h2><span class="section-number">8.5. </span>Review Questions (Sample)<a class="headerlink" href="#review-questions-sample" title="Link to this heading"></a></h2>
<h2><span class="section-number">9.5. </span>Review Questions (Sample)<a class="headerlink" href="#review-questions-sample" title="Link to this heading"></a></h2>
<ol class="arabic simple">
<li><p>What does an offer letter signature signify?</p></li>
<li><p>What documents are included in a commencement package?</p></li>
@@ -283,7 +283,7 @@ Payroll department holds this information, it cannot be disclosed to supervisors
</ol>
</section>
<section id="example-evaluations">
<h2><span class="section-number">8.6. </span>Example Evaluations<a class="headerlink" href="#example-evaluations" title="Link to this heading"></a></h2>
<h2><span class="section-number">9.6. </span>Example Evaluations<a class="headerlink" href="#example-evaluations" title="Link to this heading"></a></h2>
<p><strong>Gloria Meyer (Alberta):</strong>
- Claimed: Basic, eligible dependant, transferred tuition
- Appears accurate</p>
@@ -311,26 +311,26 @@ Payroll department holds this information, it cannot be disclosed to supervisors
<div>
<h3><a href="index.html">Table of Contents</a></h3>
<ul>
<li><a class="reference internal" href="#">8. OBNOARDING EMPLOYEE</a><ul>
<li><a class="reference internal" href="#internal-forms">8.1. Internal Forms</a><ul>
<li><a class="reference internal" href="#authorization-for-hiring">8.1.1. Authorization for Hiring</a></li>
<li><a class="reference internal" href="#union-membership">8.1.2. Union Membership</a></li>
<li><a class="reference internal" href="#benefit-enrollment-forms">8.1.3. Benefit Enrollment Forms</a></li>
<li><a class="reference internal" href="#confidentiality-agreement">8.1.4. Confidentiality Agreement</a></li>
<li><a class="reference internal" href="#">9. OBNOARDING EMPLOYEE</a><ul>
<li><a class="reference internal" href="#internal-forms">9.1. Internal Forms</a><ul>
<li><a class="reference internal" href="#authorization-for-hiring">9.1.1. Authorization for Hiring</a></li>
<li><a class="reference internal" href="#union-membership">9.1.2. Union Membership</a></li>
<li><a class="reference internal" href="#benefit-enrollment-forms">9.1.3. Benefit Enrollment Forms</a></li>
<li><a class="reference internal" href="#confidentiality-agreement">9.1.4. Confidentiality Agreement</a></li>
</ul>
</li>
<li><a class="reference internal" href="#required-federal-and-provincial-territorial-forms">8.2. Required Federal and Provincial/Territorial Forms</a><ul>
<li><a class="reference internal" href="#tax-credits-td1">8.2.1. Tax Credits (TD1)</a></li>
<li><a class="reference internal" href="#tax-credits-tp-1015-3-v-quebec">8.2.2. Tax Credits (TP-1015.3-V - Québec)</a></li>
<li><a class="reference internal" href="#required-federal-and-provincial-territorial-forms">9.2. Required Federal and Provincial/Territorial Forms</a><ul>
<li><a class="reference internal" href="#tax-credits-td1">9.2.1. Tax Credits (TD1)</a></li>
<li><a class="reference internal" href="#tax-credits-tp-1015-3-v-quebec">9.2.2. Tax Credits (TP-1015.3-V - Québec)</a></li>
</ul>
</li>
<li><a class="reference internal" href="#entering-employee-information-into-sage50">8.3. Entering Employee Information into Sage50</a><ul>
<li><a class="reference internal" href="#review-questions">8.3.1. Review Questions</a></li>
<li><a class="reference internal" href="#entering-employee-information-into-sage50">9.3. Entering Employee Information into Sage50</a><ul>
<li><a class="reference internal" href="#review-questions">9.3.1. Review Questions</a></li>
</ul>
</li>
<li><a class="reference internal" href="#content-review-highlights">8.4. Content Review Highlights</a></li>
<li><a class="reference internal" href="#review-questions-sample">8.5. Review Questions (Sample)</a></li>
<li><a class="reference internal" href="#example-evaluations">8.6. Example Evaluations</a></li>
<li><a class="reference internal" href="#content-review-highlights">9.4. Content Review Highlights</a></li>
<li><a class="reference internal" href="#review-questions-sample">9.5. Review Questions (Sample)</a></li>
<li><a class="reference internal" href="#example-evaluations">9.6. Example Evaluations</a></li>
</ul>
</li>
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@@ -339,12 +339,12 @@ Payroll department holds this information, it cannot be disclosed to supervisors
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@@ -41,11 +41,11 @@
<div class="body" role="main">
<section id="payroll-accounting">
<h1><span class="section-number">9. </span>Payroll Accounting<a class="headerlink" href="#payroll-accounting" title="Link to this heading"></a></h1>
<h1><span class="section-number">10. </span>Payroll Accounting<a class="headerlink" href="#payroll-accounting" title="Link to this heading"></a></h1>
<section id="journal-entries">
<h2><span class="section-number">9.1. </span>Journal Entries<a class="headerlink" href="#journal-entries" title="Link to this heading"></a></h2>
<h2><span class="section-number">10.1. </span>Journal Entries<a class="headerlink" href="#journal-entries" title="Link to this heading"></a></h2>
<section id="accounting-recap">
<h3><span class="section-number">9.1.1. </span>Accounting Recap<a class="headerlink" href="#accounting-recap" title="Link to this heading"></a></h3>
<h3><span class="section-number">10.1.1. </span>Accounting Recap<a class="headerlink" href="#accounting-recap" title="Link to this heading"></a></h3>
<p class="centered">
<strong><img class="math" src="_images/math/3fa11f8e69bcb5e9be2df6754a5e4f614450b91c.png" alt="\Sigma \text{ Total Debits} = \Sigma \text{ Total Credits}" style="vertical-align: 0px"/></strong></p><p class="centered">
<strong><img class="math" src="_images/math/96afef116a3f4349b6cf21c73cca42773ed21927.png" alt="\text{Assets} = \text{Liabilities} + \text{Equity}" style="vertical-align: -4px"/></strong></p><div class="math" id="equation-accountingequation">
@@ -59,7 +59,7 @@
Payroll accounting includes the management of employee wages, tax withholdings, benefit deductions, and other payroll-related expenses. The system is designed to automate these processes, ensuring accuracy and compliance with Canadian payroll regulations.</p>
</section>
<section id="id1">
<h3><span class="section-number">9.1.2. </span>Journal Entries<a class="headerlink" href="#id1" title="Link to this heading"></a></h3>
<h3><span class="section-number">10.1.2. </span>Journal Entries<a class="headerlink" href="#id1" title="Link to this heading"></a></h3>
<p>Journal entries are a key part of payroll accounting, as they document the financial impact of payroll transactions on the organizations accounts. Each payroll run generates a series of journal entries that reflect the distribution of wages, taxes, and deductions across various accounts.
These entries are essential for maintaining accurate financial records and ensuring that the organizations financial statements reflect the true cost of employee compensation. The Canadian Payroll Administration system automates the generation of these journal entries, reducing the risk of errors and ensuring compliance with accounting standards.</p>
<blockquote>
@@ -108,10 +108,10 @@ These entries are essential for maintaining accurate financial records and ensur
<div>
<h3><a href="index.html">Table of Contents</a></h3>
<ul>
<li><a class="reference internal" href="#">9. Payroll Accounting</a><ul>
<li><a class="reference internal" href="#journal-entries">9.1. Journal Entries</a><ul>
<li><a class="reference internal" href="#accounting-recap">9.1.1. Accounting Recap</a></li>
<li><a class="reference internal" href="#id1">9.1.2. Journal Entries</a></li>
<li><a class="reference internal" href="#">10. Payroll Accounting</a><ul>
<li><a class="reference internal" href="#journal-entries">10.1. Journal Entries</a><ul>
<li><a class="reference internal" href="#accounting-recap">10.1.1. Accounting Recap</a></li>
<li><a class="reference internal" href="#id1">10.1.2. Journal Entries</a></li>
</ul>
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@@ -41,9 +41,9 @@
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<h1><span class="section-number">12. </span>RATES FOR 2025<a class="headerlink" href="#rates-for-2025" title="Link to this heading"></a></h1>
<h1><span class="section-number">13. </span>RATES FOR 2025<a class="headerlink" href="#rates-for-2025" title="Link to this heading"></a></h1>
<section id="canada-quebec-pension-plan-cpp-qpp">
<h2><span class="section-number">12.1. </span>CANADA / QUEBEC PENSION PLAN (CPP / QPP)<a class="headerlink" href="#canada-quebec-pension-plan-cpp-qpp" title="Link to this heading"></a></h2>
<h2><span class="section-number">13.1. </span>CANADA / QUEBEC PENSION PLAN (CPP / QPP)<a class="headerlink" href="#canada-quebec-pension-plan-cpp-qpp" title="Link to this heading"></a></h2>
<table class="docutils align-left" id="id1">
<caption><span class="caption-text">CANADA / QUEBEC PENSION PLAN (CPP / QPP)</span><a class="headerlink" href="#id1" title="Link to this table"></a></caption>
<colgroup>
@@ -121,7 +121,7 @@
</table>
</section>
<section id="cpp2-contribution-rates-maximums">
<h2><span class="section-number">12.2. </span>CPP2 CONTRIBUTION RATES MAXIMUMS<a class="headerlink" href="#cpp2-contribution-rates-maximums" title="Link to this heading"></a></h2>
<h2><span class="section-number">13.2. </span>CPP2 CONTRIBUTION RATES MAXIMUMS<a class="headerlink" href="#cpp2-contribution-rates-maximums" title="Link to this heading"></a></h2>
<table class="docutils align-left" id="id2">
<caption><span class="caption-text">CPP2 Contribution Rates Maximums</span><a class="headerlink" href="#id2" title="Link to this table"></a></caption>
<colgroup>
@@ -161,9 +161,9 @@
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<ul>
<li><a class="reference internal" href="#">12. RATES FOR 2025</a><ul>
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<li><a class="reference internal" href="#cpp2-contribution-rates-maximums">12.2. CPP2 CONTRIBUTION RATES MAXIMUMS</a></li>
<li><a class="reference internal" href="#">13. RATES FOR 2025</a><ul>
<li><a class="reference internal" href="#canada-quebec-pension-plan-cpp-qpp">13.1. CANADA / QUEBEC PENSION PLAN (CPP / QPP)</a></li>
<li><a class="reference internal" href="#cpp2-contribution-rates-maximums">13.2. CPP2 CONTRIBUTION RATES MAXIMUMS</a></li>
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<h1><span class="section-number">13. </span>REFERENCES<a class="headerlink" href="#references" title="Link to this heading"></a></h1>
<h1><span class="section-number">14. </span>REFERENCES<a class="headerlink" href="#references" title="Link to this heading"></a></h1>
<p><a class="reference external" href="https://www.canada.ca/en/revenue-agency/services/e-services/digital-services-businesses/payroll-deductions-online-calculator.html">Payroll Deductions Online Calculator</a></p>
<p><a class="reference external" href="https://laws-lois.justice.gc.ca/eng/acts/C-8/page-5.html#docCont">CPP Maximum contributory earnings</a></p>
<p><a class="reference external" href="https://laws-lois.justice.gc.ca/eng/acts/C-8/page-3.html#docCont">Second additional CPP contributions</a></p>
@@ -57,12 +57,12 @@
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<h1><span class="section-number">10. </span>REVIEW QUESTIONS<a class="headerlink" href="#review-questions" title="Link to this heading"></a></h1>
<h1><span class="section-number">11. </span>REVIEW QUESTIONS<a class="headerlink" href="#review-questions" title="Link to this heading"></a></h1>
<p>This section contains review questions for the material covered in the course. These questions are designed to test your understanding and help reinforce the concepts learned.</p>
<section id="new-employee-information">
<h2><span class="section-number">10.1. </span>New Employee Information<a class="headerlink" href="#new-employee-information" title="Link to this heading"></a></h2>
<h2><span class="section-number">11.1. </span>New Employee Information<a class="headerlink" href="#new-employee-information" title="Link to this heading"></a></h2>
<p>Which one of the following is correct?</p>
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@@ -66,8 +66,8 @@
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<ul>
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@@ -76,12 +76,12 @@
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<section id="terminology">
<h1><span class="section-number">11. </span>TERMINOLOGY<a class="headerlink" href="#terminology" title="Link to this heading"></a></h1>
<h1><span class="section-number">12. </span>TERMINOLOGY<a class="headerlink" href="#terminology" title="Link to this heading"></a></h1>
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<h2><span class="section-number">11.1. </span>Pensionable Earnings<a class="headerlink" href="#pensionable-earnings" title="Link to this heading"></a></h2>
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