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@@ -40,8 +40,8 @@ whether an employee-employer relationship exists. It is crucial to know how to d
type of relationship that exists between the worker and the organization and to ensure that
any payments made comply with legislation.
What are the Payroll's Objectives?
-------------------------------------
Payroll Objectives
------------------
The primary objective of the payroll function in every organization is to pay employees
accurately and on time, in compliance with legislative requirements, for a full annual payroll
@@ -83,7 +83,7 @@ In payroll, there are also compliance requirements from other non-government sta
for example, union collective agreements or group insurance policies. Payroll practitioners
must therefore ensure the organization is compliant with all stakeholder requirements.
What are the Responsibilities of Payroll Function?
Responsibilities and Functions of Payroll
---------------------------------------------------
The responsibilities of the payroll practitioner will differ depending on the size of the
@@ -252,6 +252,110 @@ employees under federal jurisdiction in the following industries and organizatio
- organizations whose operations have been declared for the general advantage of Canada or two or more provinces, and such Crown corporations as Canada Post Corporation, and the Canadian Broadcasting Corporation (CBC)
Provincial/Territorial Governments
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Under the Constitution Act of 1867, the exclusive legislative authority of the provinces and
territories exists over:
- all laws regarding property and civil rights, which give the provinces/territories the authority to enact legislation to establish employment standards for working conditions
- employment in manufacturing, mining, construction, wholesale and retail trade, service industries, local businesses and any industry or occupation not specifically covered under federal jurisdiction
The existing divisions between federal and provincial/territorial control impact payroll when
dealing with employment/labour standards. Employment/labour standards are rules legislated
by each provincial/territorial jurisdiction that dictate issues such as hours of work, minimum
wage, overtime, vacation pay and termination pay requirements.
**Example:**
The Gap is a retail business with stores across Canada. The workers in each store are
governed under the employment/labour standards legislated in the jurisdiction in which they
work. For example, the minimum general hourly wage in effect January 1, 2020 (which is
governed by provincial/territorial employment/labour standards) is higher in Ontario than in
Prince Edward Island. An employee working in Ontario would receive a higher hourly
minimum wage than an employee with the same position in Prince Edward Island.
Employers must follow the employment/labour standards legislated by the jurisdiction in
which their employees work, unless they are governed by federal labour standards. Federal
labour standards apply to certain industries and organizations, regardless of where the
employees work.
The person or persons performing the payroll function must clearly understand under which
employment/labour standards jurisdiction the employees of the organization fall.
Organizations may have some employees who fall under federal jurisdiction and another
group of employees who fall under provincial/territorial legislation.
Internal Stakeholders
~~~~~~~~~~~~~~~~~~~~~~
Internal stakeholders are those individuals or departments closely related to the organization
that the payroll department is serving. This group includes employers, employees and other
departments in the organization.
**Employers** - Management may require certain information from payroll to make sound
business decisions.
**Employees** - Employees require that their pay is received in a timely and accurate manner to
meet personal obligations. Employees must also be assured that their personal information is
kept confidential.
**Other departments** - Many departments interact with payroll, either for information or
reporting. According to the Canadian Payroll Association's 2020 National Payroll Week
(NPW) Payroll Professional Research Survey, fifty-five percent of payroll practitioners
report through the finance department and thirty-two percent report through the human
resources department. Information such as general ledger posting, payroll and benefit costs
and salary information must flow between payroll, human resources and finance in formats
needed for their various requirements.
In addition, other departments such as contracts and manufacturing often need payroll
information for budgeting, analytical and quality purposes.
External Stakeholders
~~~~~~~~~~~~~~~~~~~~~~
External stakeholders are organizations that are neither government nor internal stakeholders,
yet have a close working relationship with the payroll function. Compliance with external
stakeholder requirements is also a responsibility of the payroll department. In most cases,
compliance will require that payroll request a cheque from accounts payable and send it to
the external organization along with supporting documentation.
**Benefit Carriers** are insurance companies that provide benefit coverage to employees.
Payroll is responsible for deducting and remitting premiums for the insurance coverage to the
carriers and for providing reports on employee enrolment and coverage levels.
**Courts and the CRA** require payroll to accurately deduct and remit amounts ordered to be
withheld through garnishments, third party demands, requirements to pay and support
deduction orders.
**Unions** require that payroll accurately deduct and remit union dues and initiation fees, and to
ensure that the terms of the collective agreement are adhered to. It is estimated that just under
one-third of the workforce in Canada belongs to a trade union. Payroll professionals must be
familiar with the role and activities of trade unions and the responsibilities of the employer
and the payroll department in a unionized environment.
**Pension Providers** are third party pension plan providers that may require payroll to provide
enrolment reports on participating employees and length of service calculations, and to remit
employee deductions and employer contributions
**Charities** have arrangements with some organizations to facilitate employee donations
through payroll deductions. Payroll is responsible for remitting these deductions to the
charity.
**Third Party Administrators** are organizations that affect the administration of the payroll
function. Examples of these external stakeholders are banking institutions or benefit
organizations that offer Group Registered Retirement Saving Plans (RRSP). Payroll is
responsible for deducting any employee contributions and remitting employer and employee
contributions to the plan administrator.
**Outsource/Software vendors** are payroll service providers or payroll software vendors that
work with the payroll department to ensure the payroll is being processed accurately and
efficiently.
Legislation
-----------
The Employee-Employer Relationship
-----------------------------------
Review Summary
--------------
@@ -272,9 +376,48 @@ A payroll practitioner's knowledge base includes a thorough understanding of pay
processes, and payroll reporting. In addition to technical expertise, practitioners must also possess strong personal and
professional skills to manage responsibilities effectively and adapt to evolving regulatory environments.
Stakeholders are the individuals, groups, and agencies—both internal and external to the organization—who have a vested
interest in the function and output of the payroll department. Their involvement and expectations influence how payroll is
managed, ensuring that it aligns with organizational goals and legal obligations.
Payroll management stakeholders include federal and provincial/territorial governments, internal stakeholders, and external
stakeholders. Internal stakeholders consist of employees, employers, and other departments within the organization, all of
whom rely on accurate and timely payroll services. External stakeholders encompass benefit carriers, courts, unions, pension
providers, charities, third-party administrators, and outsource or software vendors. These entities interact with payroll
data and processes, often requiring coordination and compliance.
The federal parliament holds the authority to enact laws for the peace, order, and good government of Canada. It exercises
control over industries and undertakings that are inter-provincial, national, or international in nature, as well as
rganizations deemed to serve the general advantage of Canada or multiple provinces, including Crown corporations.
In contrast, provincial and territorial legislatures have jurisdiction over direct taxation for regional purposes and laws
concerning property, civil rights, and employment in sectors such as manufacturing, mining, construction, wholesale and
retail trade, service industries, and local businesses. Any industry or occupation not specifically under federal
jurisdiction falls within provincial or territorial control.
Employers are required to adhere to the employment and labour standards legislated by the jurisdiction in which their
employees work, unless they are governed by federal labour standards. Where legislation mandates employer compliance,
financial penalties or legal action may be imposed to enforce adherence and promote accountability.
Review Questions
----------------
What is the primary objective of the payroll department?
List four definitions of payroll.
List four definitions of payroll.
List the three types of payroll management stakeholders and provide an example of each.
Explain the difference between legislation and regulation.
What are two examples of sources of information that you use (or could use) to keep upto-date on payroll compliance changes?
List three external stakeholders and explain their compliance requirements.
Indicate the jurisdiction the following employees fall under:
- Canada Post Corporation
- An insurance company
- A uranium mining company
- Canadian Broadcasting Corporation
- A retail department store with locations in every province
- A chartered bank.

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@@ -77,8 +77,8 @@ whether an employee-employer relationship exists. It is crucial to know how to d
type of relationship that exists between the worker and the organization and to ensure that
any payments made comply with legislation.</p>
</section>
<section id="what-are-the-payroll-s-objectives">
<h2><span class="section-number">4.2. </span>What are the Payroll’s Objectives?<a class="headerlink" href="#what-are-the-payroll-s-objectives" title="Link to this heading"></a></h2>
<section id="payroll-objectives">
<h2><span class="section-number">4.2. </span>Payroll Objectives<a class="headerlink" href="#payroll-objectives" title="Link to this heading"></a></h2>
<p>The primary objective of the payroll function in every organization is to pay employees
accurately and on time, in compliance with legislative requirements, for a full annual payroll
cycle.</p>
@@ -116,8 +116,8 @@ the potential for any fines or penalties.</p>
for example, union collective agreements or group insurance policies. Payroll practitioners
must therefore ensure the organization is compliant with all stakeholder requirements.</p>
</section>
<section id="what-are-the-responsibilities-of-payroll-function">
<h2><span class="section-number">4.3. </span>What are the Responsibilities of Payroll Function?<a class="headerlink" href="#what-are-the-responsibilities-of-payroll-function" title="Link to this heading"></a></h2>
<section id="responsibilities-and-functions-of-payroll">
<h2><span class="section-number">4.3. </span>Responsibilities and Functions of Payroll<a class="headerlink" href="#responsibilities-and-functions-of-payroll" title="Link to this heading"></a></h2>
<p>The responsibilities of the payroll practitioner will differ depending on the size of the
organization, the number of jurisdictions in which they pay, the reporting structure under
which they work, and whether there are other related departments, such as human resources,
@@ -269,9 +269,100 @@ employees under federal jurisdiction in the following industries and organizatio
</ul>
</div></blockquote>
</section>
<section id="provincial-territorial-governments">
<h3><span class="section-number">4.4.3. </span>Provincial/Territorial Governments<a class="headerlink" href="#provincial-territorial-governments" title="Link to this heading"></a></h3>
<p>Under the Constitution Act of 1867, the exclusive legislative authority of the provinces and
territories exists over:</p>
<blockquote>
<div><ul class="simple">
<li><p>all laws regarding property and civil rights, which give the provinces/territories the authority to enact legislation to establish employment standards for working conditions</p></li>
<li><p>employment in manufacturing, mining, construction, wholesale and retail trade, service industries, local businesses and any industry or occupation not specifically covered under federal jurisdiction</p></li>
</ul>
</div></blockquote>
<p>The existing divisions between federal and provincial/territorial control impact payroll when
dealing with employment/labour standards. Employment/labour standards are rules legislated
by each provincial/territorial jurisdiction that dictate issues such as hours of work, minimum
wage, overtime, vacation pay and termination pay requirements.</p>
<blockquote>
<div><p><strong>Example:</strong></p>
<p>The Gap is a retail business with stores across Canada. The workers in each store are
governed under the employment/labour standards legislated in the jurisdiction in which they
work. For example, the minimum general hourly wage in effect January 1, 2020 (which is
governed by provincial/territorial employment/labour standards) is higher in Ontario than in
Prince Edward Island. An employee working in Ontario would receive a higher hourly
minimum wage than an employee with the same position in Prince Edward Island.</p>
<p>Employers must follow the employment/labour standards legislated by the jurisdiction in
which their employees work, unless they are governed by federal labour standards. Federal
labour standards apply to certain industries and organizations, regardless of where the
employees work.</p>
</div></blockquote>
<p>The person or persons performing the payroll function must clearly understand under which
employment/labour standards jurisdiction the employees of the organization fall.
Organizations may have some employees who fall under federal jurisdiction and another
group of employees who fall under provincial/territorial legislation.</p>
</section>
<section id="internal-stakeholders">
<h3><span class="section-number">4.4.4. </span>Internal Stakeholders<a class="headerlink" href="#internal-stakeholders" title="Link to this heading"></a></h3>
<p>Internal stakeholders are those individuals or departments closely related to the organization
that the payroll department is serving. This group includes employers, employees and other
departments in the organization.</p>
<p><strong>Employers</strong> - Management may require certain information from payroll to make sound
business decisions.</p>
<p><strong>Employees</strong> - Employees require that their pay is received in a timely and accurate manner to
meet personal obligations. Employees must also be assured that their personal information is
kept confidential.</p>
<p><strong>Other departments</strong> - Many departments interact with payroll, either for information or
reporting. According to the Canadian Payroll Association’s 2020 National Payroll Week
(NPW) Payroll Professional Research Survey, fifty-five percent of payroll practitioners
report through the finance department and thirty-two percent report through the human
resources department. Information such as general ledger posting, payroll and benefit costs
and salary information must flow between payroll, human resources and finance in formats
needed for their various requirements.</p>
<p>In addition, other departments such as contracts and manufacturing often need payroll
information for budgeting, analytical and quality purposes.</p>
</section>
<section id="external-stakeholders">
<h3><span class="section-number">4.4.5. </span>External Stakeholders<a class="headerlink" href="#external-stakeholders" title="Link to this heading"></a></h3>
<p>External stakeholders are organizations that are neither government nor internal stakeholders,
yet have a close working relationship with the payroll function. Compliance with external
stakeholder requirements is also a responsibility of the payroll department. In most cases,
compliance will require that payroll request a cheque from accounts payable and send it to
the external organization along with supporting documentation.</p>
<p><strong>Benefit Carriers</strong> are insurance companies that provide benefit coverage to employees.
Payroll is responsible for deducting and remitting premiums for the insurance coverage to the
carriers and for providing reports on employee enrolment and coverage levels.</p>
<p><strong>Courts and the CRA</strong> require payroll to accurately deduct and remit amounts ordered to be
withheld through garnishments, third party demands, requirements to pay and support
deduction orders.</p>
<p><strong>Unions</strong> require that payroll accurately deduct and remit union dues and initiation fees, and to
ensure that the terms of the collective agreement are adhered to. It is estimated that just under
one-third of the workforce in Canada belongs to a trade union. Payroll professionals must be
familiar with the role and activities of trade unions and the responsibilities of the employer
and the payroll department in a unionized environment.</p>
<p><strong>Pension Providers</strong> are third party pension plan providers that may require payroll to provide
enrolment reports on participating employees and length of service calculations, and to remit
employee deductions and employer contributions</p>
<p><strong>Charities</strong> have arrangements with some organizations to facilitate employee donations
through payroll deductions. Payroll is responsible for remitting these deductions to the
charity.</p>
<p><strong>Third Party Administrators</strong> are organizations that affect the administration of the payroll
function. Examples of these external stakeholders are banking institutions or benefit
organizations that offer Group Registered Retirement Saving Plans (RRSP). Payroll is
responsible for deducting any employee contributions and remitting employer and employee
contributions to the plan administrator.</p>
<p><strong>Outsource/Software vendors</strong> are payroll service providers or payroll software vendors that
work with the payroll department to ensure the payroll is being processed accurately and
efficiently.</p>
</section>
</section>
<section id="legislation">
<h2><span class="section-number">4.5. </span>Legislation<a class="headerlink" href="#legislation" title="Link to this heading"></a></h2>
</section>
<section id="the-employee-employer-relationship">
<h2><span class="section-number">4.6. </span>The Employee-Employer Relationship<a class="headerlink" href="#the-employee-employer-relationship" title="Link to this heading"></a></h2>
</section>
<section id="review-summary">
<h2><span class="section-number">4.5. </span>Review Summary<a class="headerlink" href="#review-summary" title="Link to this heading"></a></h2>
<h2><span class="section-number">4.7. </span>Review Summary<a class="headerlink" href="#review-summary" title="Link to this heading"></a></h2>
<p>The primary objective of the payroll function in every organization is to ensure that employees are paid accurately
and on time, in full compliance with legislative requirements, throughout the entire annual payroll cycle. This function is
critical to maintaining employee satisfaction, legal integrity, and operational efficiency.</p>
@@ -285,11 +376,44 @@ operations.</p>
<p>A payroll practitioner’s knowledge base includes a thorough understanding of payroll compliance legislation, payroll
processes, and payroll reporting. In addition to technical expertise, practitioners must also possess strong personal and
professional skills to manage responsibilities effectively and adapt to evolving regulatory environments.</p>
<p>Stakeholders are the individuals, groups, and agencies—both internal and external to the organization—who have a vested
interest in the function and output of the payroll department. Their involvement and expectations influence how payroll is
managed, ensuring that it aligns with organizational goals and legal obligations.</p>
<p>Payroll management stakeholders include federal and provincial/territorial governments, internal stakeholders, and external
stakeholders. Internal stakeholders consist of employees, employers, and other departments within the organization, all of
whom rely on accurate and timely payroll services. External stakeholders encompass benefit carriers, courts, unions, pension
providers, charities, third-party administrators, and outsource or software vendors. These entities interact with payroll
data and processes, often requiring coordination and compliance.</p>
<p>The federal parliament holds the authority to enact laws for the peace, order, and good government of Canada. It exercises
control over industries and undertakings that are inter-provincial, national, or international in nature, as well as
rganizations deemed to serve the general advantage of Canada or multiple provinces, including Crown corporations.
In contrast, provincial and territorial legislatures have jurisdiction over direct taxation for regional purposes and laws
concerning property, civil rights, and employment in sectors such as manufacturing, mining, construction, wholesale and
retail trade, service industries, and local businesses. Any industry or occupation not specifically under federal
jurisdiction falls within provincial or territorial control.</p>
<p>Employers are required to adhere to the employment and labour standards legislated by the jurisdiction in which their
employees work, unless they are governed by federal labour standards. Where legislation mandates employer compliance,
financial penalties or legal action may be imposed to enforce adherence and promote accountability.</p>
</section>
<section id="review-questions">
<h2><span class="section-number">4.6. </span>Review Questions<a class="headerlink" href="#review-questions" title="Link to this heading"></a></h2>
<h2><span class="section-number">4.8. </span>Review Questions<a class="headerlink" href="#review-questions" title="Link to this heading"></a></h2>
<p>What is the primary objective of the payroll department?</p>
<p>List four definitions of payroll.</p>
<p>List the three types of payroll management stakeholders and provide an example of each.</p>
<p>Explain the difference between legislation and regulation.</p>
<p>What are two examples of sources of information that you use (or could use) to keep upto-date on payroll compliance changes?</p>
<p>List three external stakeholders and explain their compliance requirements.</p>
<p>Indicate the jurisdiction the following employees fall under:</p>
<blockquote>
<div><ul class="simple">
<li><p>Canada Post Corporation</p></li>
<li><p>An insurance company</p></li>
<li><p>A uranium mining company</p></li>
<li><p>Canadian Broadcasting Corporation</p></li>
<li><p>A retail department store with locations in every province</p></li>
<li><p>A chartered bank.</p></li>
</ul>
</div></blockquote>
</section>
</section>
@@ -305,15 +429,20 @@ professional skills to manage responsibilities effectively and adapt to evolving
<ul>
<li><a class="reference internal" href="#">4. PAYROLL COMPLIANCE AND REGULATIONS</a><ul>
<li><a class="reference internal" href="#introduction">4.1. Introduction</a></li>
<li><a class="reference internal" href="#what-are-the-payroll-s-objectives">4.2. What are the Payroll’s Objectives?</a></li>
<li><a class="reference internal" href="#what-are-the-responsibilities-of-payroll-function">4.3. What are the Responsibilities of Payroll Function?</a></li>
<li><a class="reference internal" href="#payroll-objectives">4.2. Payroll Objectives</a></li>
<li><a class="reference internal" href="#responsibilities-and-functions-of-payroll">4.3. Responsibilities and Functions of Payroll</a></li>
<li><a class="reference internal" href="#payroll-stakeholders">4.4. Payroll Stakeholders</a><ul>
<li><a class="reference internal" href="#government-stakeholders">4.4.1. Government Stakeholders</a></li>
<li><a class="reference internal" href="#federal-government">4.4.2. Federal Government</a></li>
<li><a class="reference internal" href="#provincial-territorial-governments">4.4.3. Provincial/Territorial Governments</a></li>
<li><a class="reference internal" href="#internal-stakeholders">4.4.4. Internal Stakeholders</a></li>
<li><a class="reference internal" href="#external-stakeholders">4.4.5. External Stakeholders</a></li>
</ul>
</li>
<li><a class="reference internal" href="#review-summary">4.5. Review Summary</a></li>
<li><a class="reference internal" href="#review-questions">4.6. Review Questions</a></li>
<li><a class="reference internal" href="#legislation">4.5. Legislation</a></li>
<li><a class="reference internal" href="#the-employee-employer-relationship">4.6. The Employee-Employer Relationship</a></li>
<li><a class="reference internal" href="#review-summary">4.7. Review Summary</a></li>
<li><a class="reference internal" href="#review-questions">4.8. Review Questions</a></li>
</ul>
</li>
</ul>

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@@ -62,11 +62,13 @@ to confidently perform essential payroll functions encountered in day-to-day ope
<li class="toctree-l1"><a class="reference internal" href="terminology.html">3. TERMINOLOGY</a></li>
<li class="toctree-l1"><a class="reference internal" href="compliance.html">4. PAYROLL COMPLIANCE AND REGULATIONS</a><ul>
<li class="toctree-l2"><a class="reference internal" href="compliance.html#introduction">4.1. Introduction</a></li>
<li class="toctree-l2"><a class="reference internal" href="compliance.html#what-are-the-payroll-s-objectives">4.2. What are the Payroll’s Objectives?</a></li>
<li class="toctree-l2"><a class="reference internal" href="compliance.html#what-are-the-responsibilities-of-payroll-function">4.3. What are the Responsibilities of Payroll Function?</a></li>
<li class="toctree-l2"><a class="reference internal" href="compliance.html#payroll-objectives">4.2. Payroll Objectives</a></li>
<li class="toctree-l2"><a class="reference internal" href="compliance.html#responsibilities-and-functions-of-payroll">4.3. Responsibilities and Functions of Payroll</a></li>
<li class="toctree-l2"><a class="reference internal" href="compliance.html#payroll-stakeholders">4.4. Payroll Stakeholders</a></li>
<li class="toctree-l2"><a class="reference internal" href="compliance.html#review-summary">4.5. Review Summary</a></li>
<li class="toctree-l2"><a class="reference internal" href="compliance.html#review-questions">4.6. Review Questions</a></li>
<li class="toctree-l2"><a class="reference internal" href="compliance.html#legislation">4.5. Legislation</a></li>
<li class="toctree-l2"><a class="reference internal" href="compliance.html#the-employee-employer-relationship">4.6. The Employee-Employer Relationship</a></li>
<li class="toctree-l2"><a class="reference internal" href="compliance.html#review-summary">4.7. Review Summary</a></li>
<li class="toctree-l2"><a class="reference internal" href="compliance.html#review-questions">4.8. Review Questions</a></li>
</ul>
</li>
<li class="toctree-l1"><a class="reference internal" href="compensation.html">5. DETERMINING ANNUAL AND PAY PERIOD EARNINGS</a></li>

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@@ -1,4 +1,4 @@
# Sphinx build info version 1
# This file records the configuration used when building these files. When it is not found, a full rebuild will be done.
config: fd5cf6b96fc11692f2a1f690c6553900
config: e71a59c32b96a99736c5e694850e3da0
tags: 62a1e7829a13fc7881b6498c52484ec0

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@@ -115,13 +115,13 @@
</a>
</li>
<li class="toctree-l2">
<a class="reference internal" href="#what-are-the-payrolls-objectives">
4.2. What are the Payroll&rsquo;s Objectives?
<a class="reference internal" href="#payroll-objectives">
4.2. Payroll Objectives
</a>
</li>
<li class="toctree-l2">
<a class="reference internal" href="#what-are-the-responsibilities-of-payroll-function">
4.3. What are the Responsibilities of Payroll Function?
<a class="reference internal" href="#responsibilities-and-functions-of-payroll">
4.3. Responsibilities and Functions of Payroll
</a>
</li>
<li class="toctree-l2">
@@ -129,14 +129,24 @@
4.4. Payroll Stakeholders
</a>
</li>
<li class="toctree-l2">
<a class="reference internal" href="#legislation">
4.5. Legislation
</a>
</li>
<li class="toctree-l2">
<a class="reference internal" href="#the-employee-employer-relationship">
4.6. The Employee-Employer Relationship
</a>
</li>
<li class="toctree-l2">
<a class="reference internal" href="#review-summary">
4.5. Review Summary
4.7. Review Summary
</a>
</li>
<li class="toctree-l2">
<a class="reference internal" href="#review-questions">
4.6. Review Questions
4.8. Review Questions
</a>
</li>
</ul>
@@ -651,10 +661,10 @@ type of relationship that exists between the worker and the organization and to
any payments made comply with legislation.
</p>
</section>
<section id="what-are-the-payroll-s-objectives">
<section id="payroll-objectives">
<h3>
What are the Payroll&rsquo;s Objectives?
<a class="headerlink" href="#what-are-the-payroll-s-objectives" title="Link to this heading">
Payroll Objectives
<a class="headerlink" href="#payroll-objectives" title="Link to this heading">
&para;
</a>
</h3>
@@ -738,10 +748,10 @@ for example, union collective agreements or group insurance policies. Payroll pr
must therefore ensure the organization is compliant with all stakeholder requirements.
</p>
</section>
<section id="what-are-the-responsibilities-of-payroll-function">
<section id="responsibilities-and-functions-of-payroll">
<h3>
What are the Responsibilities of Payroll Function?
<a class="headerlink" href="#what-are-the-responsibilities-of-payroll-function" title="Link to this heading">
Responsibilities and Functions of Payroll
<a class="headerlink" href="#responsibilities-and-functions-of-payroll" title="Link to this heading">
&para;
</a>
</h3>
@@ -1101,6 +1111,204 @@ employees under federal jurisdiction in the following industries and organizatio
</div>
</blockquote>
</section>
<section id="provincial-territorial-governments">
<h4>
Provincial/Territorial Governments
<a class="headerlink" href="#provincial-territorial-governments" title="Link to this heading">
&para;
</a>
</h4>
<p>
Under the Constitution Act of 1867, the exclusive legislative authority of the provinces and
territories exists over:
</p>
<blockquote>
<div>
<ul class="simple">
<li>
<p>
all laws regarding property and civil rights, which give the provinces/territories the authority to enact legislation to establish employment standards for working conditions
</p>
</li>
<li>
<p>
employment in manufacturing, mining, construction, wholesale and retail trade, service industries, local businesses and any industry or occupation not specifically covered under federal jurisdiction
</p>
</li>
</ul>
</div>
</blockquote>
<p>
The existing divisions between federal and provincial/territorial control impact payroll when
dealing with employment/labour standards. Employment/labour standards are rules legislated
by each provincial/territorial jurisdiction that dictate issues such as hours of work, minimum
wage, overtime, vacation pay and termination pay requirements.
</p>
<blockquote>
<div>
<p>
<strong>
Example:
</strong>
</p>
<p>
The Gap is a retail business with stores across Canada. The workers in each store are
governed under the employment/labour standards legislated in the jurisdiction in which they
work. For example, the minimum general hourly wage in effect January 1, 2020 (which is
governed by provincial/territorial employment/labour standards) is higher in Ontario than in
Prince Edward Island. An employee working in Ontario would receive a higher hourly
minimum wage than an employee with the same position in Prince Edward Island.
</p>
<p>
Employers must follow the employment/labour standards legislated by the jurisdiction in
which their employees work, unless they are governed by federal labour standards. Federal
labour standards apply to certain industries and organizations, regardless of where the
employees work.
</p>
</div>
</blockquote>
<p>
The person or persons performing the payroll function must clearly understand under which
employment/labour standards jurisdiction the employees of the organization fall.
Organizations may have some employees who fall under federal jurisdiction and another
group of employees who fall under provincial/territorial legislation.
</p>
</section>
<section id="internal-stakeholders">
<h4>
Internal Stakeholders
<a class="headerlink" href="#internal-stakeholders" title="Link to this heading">
&para;
</a>
</h4>
<p>
Internal stakeholders are those individuals or departments closely related to the organization
that the payroll department is serving. This group includes employers, employees and other
departments in the organization.
</p>
<p>
<strong>
Employers
</strong>
- Management may require certain information from payroll to make sound
business decisions.
</p>
<p>
<strong>
Employees
</strong>
- Employees require that their pay is received in a timely and accurate manner to
meet personal obligations. Employees must also be assured that their personal information is
kept confidential.
</p>
<p>
<strong>
Other departments
</strong>
- Many departments interact with payroll, either for information or
reporting. According to the Canadian Payroll Association&rsquo;s 2020 National Payroll Week
(NPW) Payroll Professional Research Survey, fifty-five percent of payroll practitioners
report through the finance department and thirty-two percent report through the human
resources department. Information such as general ledger posting, payroll and benefit costs
and salary information must flow between payroll, human resources and finance in formats
needed for their various requirements.
</p>
<p>
In addition, other departments such as contracts and manufacturing often need payroll
information for budgeting, analytical and quality purposes.
</p>
</section>
<section id="external-stakeholders">
<h4>
External Stakeholders
<a class="headerlink" href="#external-stakeholders" title="Link to this heading">
&para;
</a>
</h4>
<p>
External stakeholders are organizations that are neither government nor internal stakeholders,
yet have a close working relationship with the payroll function. Compliance with external
stakeholder requirements is also a responsibility of the payroll department. In most cases,
compliance will require that payroll request a cheque from accounts payable and send it to
the external organization along with supporting documentation.
</p>
<p>
<strong>
Benefit Carriers
</strong>
are insurance companies that provide benefit coverage to employees.
Payroll is responsible for deducting and remitting premiums for the insurance coverage to the
carriers and for providing reports on employee enrolment and coverage levels.
</p>
<p>
<strong>
Courts and the CRA
</strong>
require payroll to accurately deduct and remit amounts ordered to be
withheld through garnishments, third party demands, requirements to pay and support
deduction orders.
</p>
<p>
<strong>
Unions
</strong>
require that payroll accurately deduct and remit union dues and initiation fees, and to
ensure that the terms of the collective agreement are adhered to. It is estimated that just under
one-third of the workforce in Canada belongs to a trade union. Payroll professionals must be
familiar with the role and activities of trade unions and the responsibilities of the employer
and the payroll department in a unionized environment.
</p>
<p>
<strong>
Pension Providers
</strong>
are third party pension plan providers that may require payroll to provide
enrolment reports on participating employees and length of service calculations, and to remit
employee deductions and employer contributions
</p>
<p>
<strong>
Charities
</strong>
have arrangements with some organizations to facilitate employee donations
through payroll deductions. Payroll is responsible for remitting these deductions to the
charity.
</p>
<p>
<strong>
Third Party Administrators
</strong>
are organizations that affect the administration of the payroll
function. Examples of these external stakeholders are banking institutions or benefit
organizations that offer Group Registered Retirement Saving Plans (RRSP). Payroll is
responsible for deducting any employee contributions and remitting employer and employee
contributions to the plan administrator.
</p>
<p>
<strong>
Outsource/Software vendors
</strong>
are payroll service providers or payroll software vendors that
work with the payroll department to ensure the payroll is being processed accurately and
efficiently.
</p>
</section>
</section>
<section id="legislation">
<h3>
Legislation
<a class="headerlink" href="#legislation" title="Link to this heading">
&para;
</a>
</h3>
</section>
<section id="the-employee-employer-relationship">
<h3>
The Employee-Employer Relationship
<a class="headerlink" href="#the-employee-employer-relationship" title="Link to this heading">
&para;
</a>
</h3>
</section>
<section id="review-summary">
<h3>
@@ -1130,6 +1338,32 @@ operations.
processes, and payroll reporting. In addition to technical expertise, practitioners must also possess strong personal and
professional skills to manage responsibilities effectively and adapt to evolving regulatory environments.
</p>
<p>
Stakeholders are the individuals, groups, and agencies&mdash;both internal and external to the organization&mdash;who have a vested
interest in the function and output of the payroll department. Their involvement and expectations influence how payroll is
managed, ensuring that it aligns with organizational goals and legal obligations.
</p>
<p>
Payroll management stakeholders include federal and provincial/territorial governments, internal stakeholders, and external
stakeholders. Internal stakeholders consist of employees, employers, and other departments within the organization, all of
whom rely on accurate and timely payroll services. External stakeholders encompass benefit carriers, courts, unions, pension
providers, charities, third-party administrators, and outsource or software vendors. These entities interact with payroll
data and processes, often requiring coordination and compliance.
</p>
<p>
The federal parliament holds the authority to enact laws for the peace, order, and good government of Canada. It exercises
control over industries and undertakings that are inter-provincial, national, or international in nature, as well as
rganizations deemed to serve the general advantage of Canada or multiple provinces, including Crown corporations.
In contrast, provincial and territorial legislatures have jurisdiction over direct taxation for regional purposes and laws
concerning property, civil rights, and employment in sectors such as manufacturing, mining, construction, wholesale and
retail trade, service industries, and local businesses. Any industry or occupation not specifically under federal
jurisdiction falls within provincial or territorial control.
</p>
<p>
Employers are required to adhere to the employment and labour standards legislated by the jurisdiction in which their
employees work, unless they are governed by federal labour standards. Where legislation mandates employer compliance,
financial penalties or legal action may be imposed to enforce adherence and promote accountability.
</p>
</section>
<section id="review-questions">
<h3>
@@ -1144,6 +1378,57 @@ professional skills to manage responsibilities effectively and adapt to evolving
<p>
List four definitions of payroll.
</p>
<p>
List the three types of payroll management stakeholders and provide an example of each.
</p>
<p>
Explain the difference between legislation and regulation.
</p>
<p>
What are two examples of sources of information that you use (or could use) to keep upto-date on payroll compliance changes?
</p>
<p>
List three external stakeholders and explain their compliance requirements.
</p>
<p>
Indicate the jurisdiction the following employees fall under:
</p>
<blockquote>
<div>
<ul class="simple">
<li>
<p>
Canada Post Corporation
</p>
</li>
<li>
<p>
An insurance company
</p>
</li>
<li>
<p>
A uranium mining company
</p>
</li>
<li>
<p>
Canadian Broadcasting Corporation
</p>
</li>
<li>
<p>
A retail department store with locations in every province
</p>
</li>
<li>
<p>
A chartered bank.
</p>
</li>
</ul>
</div>
</blockquote>
</section>
</section>
<span id="document-compensation">