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intro
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<title>INTRODUCTION TO CANADIAN PAYROLL — 🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</title>
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<link rel="index" title="Index" href="genindex.html" />
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<div class="related" role="navigation" aria-label="Related">
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<h3>Navigation</h3>
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<ul>
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<li class="right" style="margin-right: 10px">
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<a href="genindex.html" title="General Index"
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accesskey="I">index</a></li>
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<li class="nav-item nav-item-0"><a href="index.html">🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</a> »</li>
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<li class="nav-item nav-item-this"><a href="">INTRODUCTION TO CANADIAN PAYROLL</a></li>
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</ul>
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</div>
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<div class="document">
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<div class="bodywrapper">
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<div class="body" role="main">
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<section id="introduction-to-canadian-payroll">
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<h1>INTRODUCTION TO CANADIAN PAYROLL<a class="headerlink" href="#introduction-to-canadian-payroll" title="Link to this heading">¶</a></h1>
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<p>Payroll is a necessary function in every organization that has employees,
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as each employee expects to be paid for the work they perform. While the
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amount of maximum remuneration that an employee receives for their work is
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not legislated by any government (unless the employee is a federal or
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provincial/territorial civil servant), there is legislation in place at
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both the federal and provincial/territorial levels that governs many
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aspects of processing employees’ pay, their taxable benefits and observing
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their rights as employees.</p>
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<p>t is important to note that this course deals with payroll, the function of paying employees
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for work performed for employers. Self-employed workers or contractors, who submit
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invoices for the work they perform and receive payment through accounts payable and not
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payroll, are not employees.</p>
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<p>Both the federal and the Québec governments provide factors that can be used to determine
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whether an employee-employer relationship exists. It is crucial to know how to determine the
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type of relationship that exists between the worker and the organization and to ensure that
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any payments made comply with legislation.</p>
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<section id="payroll-objectives-and-definitions">
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<h2>Payroll Objectives and Definitions<a class="headerlink" href="#payroll-objectives-and-definitions" title="Link to this heading">¶</a></h2>
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<p>The <strong>primary objective of the payroll function</strong> in every organization is to
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pay employees accurately and on time, in compliance with legislative
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requirements, for a full annual payroll cycle.</p>
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<p>Every employee expects to receive their pay on the day it is due in the
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manner arranged with their employer, either by cheque or direct deposit.
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In addition to ensuring that employees have been paid, payroll
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practitioners must also be able to communicate payroll information to
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all stakeholders.</p>
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<ul class="simple">
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<li><p><strong>Payroll</strong> is the process of paying employees in exchange for the services they perform.</p></li>
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<li><p><strong>Legislation</strong> refers to laws enacted by a legislative body. In Canada</p></li>
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</ul>
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<p>there are many legislative sources that payroll practitioners must comply
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with at two separate levels: the federal and the provincial/territorial
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governments. Later in the chapter we will explore the compliance
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requirements for the various pieces of legislation from these sources.</p>
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<ul class="simple">
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<li><p><strong>Compliance</strong> is the observance of official requirements. For payroll</p></li>
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</ul>
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<p>practitioners, this means performing payroll functions according to
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federal and provincial/territorial legislative and non-governmental
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stakeholder requirements.</p>
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<p>The legislative requirements are termed <strong>statutory</strong>. This means they are
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enacted, created, or regulated by statute, a law enacted by the legislative
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branch of a government. Fines and penalties can be imposed if an organization
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is not in compliance with the legislative requirements in each jurisdiction.</p>
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<p>When dealing with federal and provincial/territorial government agencies,
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payroll administrator must know the many pieces of legislation that
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regulate their work and the compliance requirements associated with each.
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Payroll administrators are responsible for ensuring their organization is
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compliant with all payroll related legislation, thus eliminating the
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potential for any fines or penalties.</p>
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<p>In payroll, there are also compliance requirements from other non-government stakeholders,
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for example, union collective agreements or group insurance policies. Payroll administrator
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must therefore ensure the organization is compliant with all stakeholder requirements.</p>
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<p>The responsibilities of the payroll administrator will differ depending on
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the size of the organization, the number of jurisdictions in which they pay,
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the reporting structure under which they work, and whether there are other
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related departments, such as human resources, finance and administration in
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the organization.</p>
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<p>Small and medium-sized organizations may have payroll administrators whose
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positions include other functions that, in a larger organization, would
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fall under other departments. This payroll practitioner may be required to
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handle multiple tasks, such as employee recruitment, human resource policy
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development, benefits administration, accounts payable, accounts receivable,
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budgets and/or administration.</p>
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<p>Larger organizations may have a distinct payroll department with specific
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payroll positions, in addition to separate human resources, accounting and
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administration groups. Even in a multi-departmental organization, payroll
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administrators must have knowledge of the various stages of the life cycle
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of an employee. From hiring through termination of employment, many of
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these stages will impact how to produce the employee’s pay and prepare
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required reports.</p>
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<p>The payroll department in a large organization may have:</p>
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<blockquote>
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<div><ul class="simple">
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<li><p>payroll administrators who are responsible for entering payroll data into the system and making required payroll remittances</p></li>
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<li><p>payroll coordinators who are responsible for preparing the payroll journal entries and reconciling the payroll related accounts</p></li>
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<li><p>payroll managers who manage the payroll function, the payroll staff and represent payroll at the management level</p></li>
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</ul>
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</div></blockquote>
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<section id="legislation-vs-regulation">
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<h3>Legislation vs. regulation<a class="headerlink" href="#legislation-vs-regulation" title="Link to this heading">¶</a></h3>
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<p><strong>The legislation</strong> specifies the __requirements__.</p>
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<p><strong>The regulation</strong> specifies the __methods__ of applying the legislation.</p>
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</section>
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<section id="payroll-content-knowledge">
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<h3>Payroll Content Knowledge<a class="headerlink" href="#payroll-content-knowledge" title="Link to this heading">¶</a></h3>
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<p>Payroll administrators should know the following to effectively perform
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|
their duties:</p>
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<blockquote>
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<div><ul class="simple">
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<li><p><strong>Payroll Compliance Legislation:</strong> the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act, Employment/Labour Standards, privacy legislation, Workers’ Compensation and provincial/territorial payroll-specific legislation</p></li>
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<li><p><strong>Payroll Processes:</strong> the remuneration and deduction components of payroll and how to use these components to calculate a net pay in both regular and non-regular circumstances</p></li>
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<li><p><strong>Payroll Reporting:</strong> how to calculate and remit amounts due to government agencies, insurance companies, unions and other third parties.</p></li>
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</ul>
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</div></blockquote>
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<p>In addition, payroll reporting includes accounting for payroll expenses and accruals to internal financial systems and federal and provincial/territorial year-end reporting.</p>
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</section>
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<section id="technical-skills">
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<h3>Technical Skills<a class="headerlink" href="#technical-skills" title="Link to this heading">¶</a></h3>
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|
<p>The technical skills required by payroll professionals include proficiency in
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computer programs such as payroll software and financial systems,
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spreadsheets, databases and word processing.</p>
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<p>Organizations often change their payroll and business systems to meet new
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technology requirements and corporate reporting needs. It is important for
|
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payroll personnel to have the ability to be adaptable to changing systems.
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As a payroll practitioner, you must be prepared and willing to embrace
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continuous learning.</p>
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</section>
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<section id="personal-and-professional-skills">
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|
<h3>Personal and Professional Skills<a class="headerlink" href="#personal-and-professional-skills" title="Link to this heading">¶</a></h3>
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|
<p>The following personal and professional skills will assist payroll
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administrators in dealing with the various stakeholders involved in the
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payroll process:</p>
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<blockquote>
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|
<div><ul class="simple">
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<li><p>written communication skills, such as preparing employee emails and memos, management reports, policies and procedures and correspondence with various levels of government</p></li>
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|
<li><p>verbal communication skills, to be able to respond to internal and external stakeholder inquiries</p></li>
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<li><p>the ability to read, understand and interpret legal terminology found in documents such as collective agreements, benefit contracts and government regulations</p></li>
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<li><p>excellent mathematical skills to perform various calculations</p></li>
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<li><p>problem solving, decision-making, time management and organizational skills</p></li>
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</ul>
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</div></blockquote>
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</section>
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<section id="behavioural-and-ethical-standards">
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<h3>Behavioural and Ethical Standards<a class="headerlink" href="#behavioural-and-ethical-standards" title="Link to this heading">¶</a></h3>
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<p>Behaviour and ethics are two areas that build on the skills that an effective payroll practitioner
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must have. Effective payroll professionals should be:</p>
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<blockquote>
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<div><ul class="simple">
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<li><p>trustworthy, as the potential for fraud is ever present</p></li>
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<li><p>conscientious, with a keen attention to detail</p></li>
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<li><p>discreet, due to the confidential nature of information being handled</p></li>
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<li><p>tactful in dealing with employees who can be very sensitive when</p></li>
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</ul>
|
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<p>discussing their financial issues</p>
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<ul class="simple">
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<li><p>perceptive, able to understand all sides of an issue</p></li>
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<li><p>able to work under the pressures of absolute deadlines</p></li>
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<li><p>able to use common sense in order to recognize problems quickly and</p></li>
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</ul>
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<p>apply sound solutions</p>
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<ul class="simple">
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<li><p>able to remain objective and maintain a factual perspective when</p></li>
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</ul>
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<p>dealing with questions and inquiries</p>
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|
</div></blockquote>
|
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|
</section>
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||||||
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</section>
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<section id="payroll-stakeholders">
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<h2>Payroll Stakeholders<a class="headerlink" href="#payroll-stakeholders" title="Link to this heading">¶</a></h2>
|
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<p><strong>Stakeholders</strong> are the individuals, groups and agencies, both internal
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and external to the organization, who share an interest in the function and
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output of the payroll department. Stakeholders can be considered customers of the payroll department and payroll practitioners
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can take a proactive customer service approach to serving these individuals and groups.</p>
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<section id="payroll-management-stakeholders">
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<h3>Payroll Management Stakeholders<a class="headerlink" href="#payroll-management-stakeholders" title="Link to this heading">¶</a></h3>
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||||||
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<p><strong>Payroll Management Stakeholders</strong> are the federal and provincial/territorial governments,
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the internal stakeholders and the external stakeholders. Internal stakeholders
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include employees, employers and other departments within the organization.
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External stakeholders include benefit carriers, courts, unions, pension
|
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providers, charities, third party administrators and outsource/software vendors.</p>
|
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</section>
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<section id="government-stakeholders">
|
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<h3>Government Stakeholders<a class="headerlink" href="#government-stakeholders" title="Link to this heading">¶</a></h3>
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<p>Government legislation provides the rules and regulations that the payroll function must
|
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administer with respect to payments made to employees. For this reason, it is important for
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||||||
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the payroll practitioner to understand both the scope and the source of payroll-related
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legislation.</p>
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<p>Canada is ruled by a federal government with ten largely self-governing provinces and three
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territories controlled by the federal government. Payroll practitioners have to be compliant
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not only with the federal government legislation, but with the provincial and territorial
|
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governments’ legislation as well.</p>
|
||||||
|
<p>As a result, payroll practitioners and their organizations are affected by the enactment of
|
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legislation at both the federal and provincial/territorial level.
|
||||||
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The federal parliament has the power to make laws for the peace, order and good government
|
||||||
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of Canada. The federal cabinet is responsible for most of the legislation introduced by
|
||||||
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parliament, and has the sole power to prepare and introduce tax legislation involving the
|
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expenditure of public money.</p>
|
||||||
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<p>The provincial/territorial legislatures have power over direct taxation in the province or
|
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territory for the purposes of natural resources, prisons (except for federal penitentiaries),
|
||||||
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charitable institutions, hospitals (except marine hospitals), municipal institutions, education,
|
||||||
|
licences for provincial/territorial and municipal revenue purposes, local works, incorporation
|
||||||
|
of provincial/territorial organizations, the creation of courts and the administration of justice,
|
||||||
|
fines and penalties for breaking provincial/territorial laws.</p>
|
||||||
|
<p>In the case of old age, disability, and survivor’s pensions, again both the federal and
|
||||||
|
provincial/territorial governments have power. In this instance, if their laws conflict, the
|
||||||
|
provincial/territorial power prevails.</p>
|
||||||
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<p>The federal government cannot transfer any of its powers to a provincial/territorial
|
||||||
|
legislature, nor can a provincial/territorial legislature transfer any of its powers to the federal
|
||||||
|
government. The federal government can, however, delegate the administration of a federal
|
||||||
|
act to a provincial/territorial agency, and a provincial/territorial legislature can delegate the
|
||||||
|
administration of a provincial/territorial act to a federal agency.</p>
|
||||||
|
</section>
|
||||||
|
<section id="federal-government">
|
||||||
|
<h3>Federal Government<a class="headerlink" href="#federal-government" title="Link to this heading">¶</a></h3>
|
||||||
|
<p>The <em>Constitution Act of 1867</em> outlined the division of legislative power and authority between
|
||||||
|
federal and provincial/territorial jurisdictional governments. The exclusive legislative
|
||||||
|
authority of the Parliament of Canada extends to all matters regarding:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>the regulation of trade and commerce</p></li>
|
||||||
|
<li><p>the raising of money by any mode or system of taxation</p></li>
|
||||||
|
<li><p>the borrowing of money on the public credit</p></li>
|
||||||
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<li><p>the postal service</p></li>
|
||||||
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<li><p>fixing and providing salaries and allowances for civil and other officers of the Government of Canada</p></li>
|
||||||
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<li><p>navigation and shipping</p></li>
|
||||||
|
<li><p>ferries between a province and any British or foreign country or between two provinces</p></li>
|
||||||
|
<li><p>criminal law, except the Constitution of Courts of Criminal Jurisdiction, but including the Procedure in Criminal Matters</p></li>
|
||||||
|
<li><p>anything not specifically assigned to the provinces under this Act</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>The Canada Labour Code is legislation that consolidates certain statutes respecting labour.
|
||||||
|
Part I deals with Industrial Relations, Part II deals with Occupational Health and Safety and
|
||||||
|
Part III deals with Labour Standards. The primary objective of Part III is to establish and
|
||||||
|
protect employees’ and employers’ rights to fair and equitable conditions of employment.</p>
|
||||||
|
<p>Part III provisions establish minimum requirements concerning the working conditions of
|
||||||
|
employees under federal jurisdiction in the following industries and organizations:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>industries and undertakings of inter-provincial/territorial, national, or international nature, that is, transportation, communications, radio and television broadcasting, banking, uranium mining, grain elevators, and flour and feed operations</p></li>
|
||||||
|
<li><p>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)</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
</section>
|
||||||
|
<section id="provincial-territorial-governments">
|
||||||
|
<h3>Provincial/Territorial Governments<a class="headerlink" href="#provincial-territorial-governments" title="Link to this heading">¶</a></h3>
|
||||||
|
<p>Under the <em>Constitution Act of 1867</em>, 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>
|
||||||
|
<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>
|
||||||
|
<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>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>Employers - Management may require certain information from payroll to make sound
|
||||||
|
business decisions.</p>
|
||||||
|
<p>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.</p>
|
||||||
|
<p>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.</p>
|
||||||
|
<p>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>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>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.</p>
|
||||||
|
<p>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.</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>Trade unions negotiate with the employer, through collective bargaining, the wages, benefits,
|
||||||
|
allowances and other terms and conditions of employment on behalf of their member
|
||||||
|
employees. The outcome of negotiations is a collective agreement, which is a legally binding
|
||||||
|
contract between the employer, the union and the employees.</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="content-review">
|
||||||
|
<h2>Content Review<a class="headerlink" href="#content-review" title="Link to this heading">¶</a></h2>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><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></li>
|
||||||
|
<li><p>Payroll is the process of paying employees in exchange for the services they perform.</p></li>
|
||||||
|
<li><p>Legislation refers to laws enacted by a legislative body.</p></li>
|
||||||
|
<li><p>Compliance is the observance of official requirements.</p></li>
|
||||||
|
<li><p>Payroll practitioner knowledge consists of information on payroll compliance legislation, payroll processes and payroll reporting as well as technical, personal and professional skills.</p></li>
|
||||||
|
<li><p>Stakeholders are the individuals, groups and agencies, both internal and external to the organization, who share an interest in the function and output of the payroll department.</p></li>
|
||||||
|
<li><p>Payroll management stakeholders are the federal and provincial/territorial governments, the internal stakeholders, and the external stakeholders. Internal stakeholders include employees, employers and other departments within the organization.</p></li>
|
||||||
|
<li><p>External stakeholders include benefit carriers, courts, unions, pension providers, charities, third party administrators and outsource/software vendors.</p></li>
|
||||||
|
<li><p>The federal parliament has the power to make laws for the peace, order and good government of Canada.</p></li>
|
||||||
|
<li><p>The provincial/territorial legislatures have power over direct taxation in the province/territory for provincial/territorial purposes.</p></li>
|
||||||
|
<li><p>Federal control exists over industries and undertakings of inter-provincial/territorial, national, or international nature and organizations whose operations have been declared for the general advantage of Canada or two or more provinces and Crown corporations.</p></li>
|
||||||
|
<li><p>Provincial/territorial legislation exists over all laws regarding property and civil rights, and 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>
|
||||||
|
<li><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.</p></li>
|
||||||
|
<li><p>Where legislation requires employer compliance, there are financial penalties or the possibility of legal action to encourage compliance.</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
</section>
|
||||||
|
<section id="review-questions">
|
||||||
|
<h2>Review Questions<a class="headerlink" href="#review-questions" title="Link to this heading">¶</a></h2>
|
||||||
|
<ol class="arabic simple">
|
||||||
|
<li><p>What is the primary objective of the payroll department?</p></li>
|
||||||
|
<li><p>List the three types of payroll management stakeholders and provide an example of each.</p></li>
|
||||||
|
<li><p>Explain the difference between legislation and regulation.</p></li>
|
||||||
|
<li><p>List three external stakeholders and explain their compliance requirements.</p></li>
|
||||||
|
</ol>
|
||||||
|
</section>
|
||||||
|
</section>
|
||||||
|
|
||||||
|
|
||||||
|
<div class="clearer"></div>
|
||||||
|
</div>
|
||||||
|
</div>
|
||||||
|
</div>
|
||||||
|
<div class="sphinxsidebar" role="navigation" aria-label="Main">
|
||||||
|
<div class="sphinxsidebarwrapper">
|
||||||
|
<div>
|
||||||
|
<h3><a href="index.html">Table of Contents</a></h3>
|
||||||
|
<ul>
|
||||||
|
<li><a class="reference internal" href="#">INTRODUCTION TO CANADIAN PAYROLL</a><ul>
|
||||||
|
<li><a class="reference internal" href="#payroll-objectives-and-definitions">Payroll Objectives and Definitions</a><ul>
|
||||||
|
<li><a class="reference internal" href="#legislation-vs-regulation">Legislation vs. regulation</a></li>
|
||||||
|
<li><a class="reference internal" href="#payroll-content-knowledge">Payroll Content Knowledge</a></li>
|
||||||
|
<li><a class="reference internal" href="#technical-skills">Technical Skills</a></li>
|
||||||
|
<li><a class="reference internal" href="#personal-and-professional-skills">Personal and Professional Skills</a></li>
|
||||||
|
<li><a class="reference internal" href="#behavioural-and-ethical-standards">Behavioural and Ethical Standards</a></li>
|
||||||
|
</ul>
|
||||||
|
</li>
|
||||||
|
<li><a class="reference internal" href="#payroll-stakeholders">Payroll Stakeholders</a><ul>
|
||||||
|
<li><a class="reference internal" href="#payroll-management-stakeholders">Payroll Management Stakeholders</a></li>
|
||||||
|
<li><a class="reference internal" href="#government-stakeholders">Government Stakeholders</a></li>
|
||||||
|
<li><a class="reference internal" href="#federal-government">Federal Government</a></li>
|
||||||
|
<li><a class="reference internal" href="#provincial-territorial-governments">Provincial/Territorial Governments</a></li>
|
||||||
|
<li><a class="reference internal" href="#internal-stakeholders">Internal Stakeholders</a></li>
|
||||||
|
<li><a class="reference internal" href="#external-stakeholders">External Stakeholders</a></li>
|
||||||
|
</ul>
|
||||||
|
</li>
|
||||||
|
<li><a class="reference internal" href="#content-review">Content Review</a></li>
|
||||||
|
<li><a class="reference internal" href="#review-questions">Review Questions</a></li>
|
||||||
|
</ul>
|
||||||
|
</li>
|
||||||
|
</ul>
|
||||||
|
|
||||||
|
</div>
|
||||||
|
<div role="note" aria-label="source link">
|
||||||
|
<h3>This Page</h3>
|
||||||
|
<ul class="this-page-menu">
|
||||||
|
<li><a href="_sources/1_introduction.rst.txt"
|
||||||
|
rel="nofollow">Show Source</a></li>
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||||||
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</ul>
|
||||||
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</div>
|
||||||
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<search id="searchbox" style="display: none" role="search">
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<h3 id="searchlabel">Quick search</h3>
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<div class="searchformwrapper">
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<form class="search" action="search.html" method="get">
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<input type="text" name="q" aria-labelledby="searchlabel" autocomplete="off" autocorrect="off" autocapitalize="off" spellcheck="false"/>
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<input type="submit" value="Go" />
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</div>
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||||||
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<div class="related" role="navigation" aria-label="Related">
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||||||
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<h3>Navigation</h3>
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||||||
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<ul>
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<li class="right" style="margin-right: 10px">
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<a href="genindex.html" title="General Index"
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||||||
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>index</a></li>
|
||||||
|
<li class="nav-item nav-item-0"><a href="index.html">🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</a> »</li>
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||||||
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<li class="nav-item nav-item-this"><a href="">INTRODUCTION TO CANADIAN PAYROLL</a></li>
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© Copyright 2025.
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475
docs/build/html/3_contracts.html
vendored
Normal file
475
docs/build/html/3_contracts.html
vendored
Normal file
@@ -0,0 +1,475 @@
|
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<!DOCTYPE html>
|
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<title>EMPLOYEE vs. INDEPENDENT CONTRACTOR — 🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</title>
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<link rel="stylesheet" type="text/css" href="_static/pygments.css?v=03e43079" />
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<link rel="search" title="Search" href="search.html" />
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</head><body>
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<h3>Navigation</h3>
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<ul>
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<li class="right" style="margin-right: 10px">
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<a href="genindex.html" title="General Index"
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accesskey="I">index</a></li>
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||||||
|
<li class="nav-item nav-item-0"><a href="index.html">🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</a> »</li>
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<li class="nav-item nav-item-this"><a href="">EMPLOYEE vs. INDEPENDENT CONTRACTOR</a></li>
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</ul>
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<div class="document">
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<div class="documentwrapper">
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<div class="bodywrapper">
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<div class="body" role="main">
|
||||||
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|
||||||
|
<section id="employee-vs-independent-contractor">
|
||||||
|
<h1>EMPLOYEE vs. INDEPENDENT CONTRACTOR<a class="headerlink" href="#employee-vs-independent-contractor" title="Link to this heading">¶</a></h1>
|
||||||
|
<section id="the-employee-employer-relationship">
|
||||||
|
<h2>The Employee-Employer Relationship<a class="headerlink" href="#the-employee-employer-relationship" title="Link to this heading">¶</a></h2>
|
||||||
|
<p>Determining the nature of the working relationship between an individual and an organization is essential in all employment situations. Whether the individual is classified as an employee or self-employed directly affects the statutory withholding requirements and the organization’s compliance with applicable legislation. To support this assessment, the Canada Revenue Agency (CRA) provides a set of guidelines designed to help distinguish between the two classifications. Importantly, the decision is not made by the worker but must be based on objective criteria and legal standards.</p>
|
||||||
|
<p>Payroll practitioners play an important role in promoting awareness of this distinction throughout the organization. By proactively communicating the significance of establishing a valid employee-employer relationship, payroll professionals help ensure that employment classifications are accurate and compliant.</p>
|
||||||
|
<p>Once an employee-employer relationship is confirmed, the payroll department becomes responsible for meeting compliance obligations related to statutory withholdings. This includes deducting the appropriate amounts—such as income tax, Canada Pension Plan contributions, and Employment Insurance premiums—from employee pay and remitting them to the government within the required timelines. Proper classification and adherence to these rules are key to maintaining legal and financial accountability.</p>
|
||||||
|
<p>Where an employee-employer relationship exists, the CRA requires the employer to:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>register with the Canada Revenue Agency for a Business Number (BN)</p></li>
|
||||||
|
<li><p>withhold the statutory deductions of income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums on amounts paid to employees</p></li>
|
||||||
|
<li><p>remit the amounts withheld as well as the required employer’s share of CPP contributions and EI premiums to the Canada Revenue Agency</p></li>
|
||||||
|
<li><p>report the employees’ income and deductions on the appropriate information return</p></li>
|
||||||
|
<li><p>give the employees copies of their T4 slips by the end of February of the following calendar year</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>Information on the factors to consider when determining whether an employee-employer relationship exists can be found in the
|
||||||
|
Canada Revenue Agency guide, Employee or Self-Employed? - RC4110. The guide is available on the CRA’s website,
|
||||||
|
<a class="reference external" href="https://www.canada.ca/en/revenue-agency.html">https://www.canada.ca/en/revenue-agency.html</a>.</p>
|
||||||
|
<section id="contract-of-service-employment">
|
||||||
|
<h3>Contract of Service (Employment)<a class="headerlink" href="#contract-of-service-employment" title="Link to this heading">¶</a></h3>
|
||||||
|
<p>A <strong>contract of service</strong> is an arrangement whereby an individual (the employee) agrees to
|
||||||
|
work on a full-time or part-time basis for an employer for a specified or indeterminate period
|
||||||
|
of time.</p>
|
||||||
|
<p>Under a contract of service, one party serves another in return for a salary or some other form
|
||||||
|
of remuneration.</p>
|
||||||
|
</section>
|
||||||
|
<section id="contract-for-service-subcontracting">
|
||||||
|
<h3>Contract for Service (Subcontracting)<a class="headerlink" href="#contract-for-service-subcontracting" title="Link to this heading">¶</a></h3>
|
||||||
|
<p>A <strong>contract for service</strong> is a business relationship whereby one party agrees to perform certain
|
||||||
|
specific work stipulated in the contract for another party. It usually calls for the
|
||||||
|
accomplishment of a clearly defined task but does not normally require that the contracting
|
||||||
|
party do anything him/herself. A person who carries out a contract for service may be
|
||||||
|
considered a contract worker, a self-employed person or an independent contractor.</p>
|
||||||
|
<p>A business relationship is formed when a self-employed individual enters into a verbal or written agreement to complete
|
||||||
|
specific work for a payer in exchange for compensation. This arrangement does not establish an employer-employee relationship;
|
||||||
|
instead, it represents a contract for services.</p>
|
||||||
|
<p>Under this type of agreement, the self-employed individual is responsible for delivering a final result within an agreed
|
||||||
|
timeframe, using methods of their own choosing. They are not subject to the direction or supervision of the payer while
|
||||||
|
completing the work, and they retain autonomy over how tasks are executed. In most cases, the payer does not participate in
|
||||||
|
or influence the work process, meaning control over the work lies entirely with the self-employed individual. This structure
|
||||||
|
reflects a high level of independence and flexibility, distinguishing it clearly from traditional employment relationships.</p>
|
||||||
|
<p>Under a contract for service, a self-employed individual accepts both the potential for profit and the risk of financial loss.
|
||||||
|
Prior to engagement, the individual agrees on the total cost of the work, uses personal tools and equipment, and assumes full
|
||||||
|
responsibility for how the work is performed. This means the individual bears any unforeseen costs or challenges that arise
|
||||||
|
during the project. Conversely, if the work is completed more efficiently than expected, the financial gain—through retained
|
||||||
|
profits—is greater.</p>
|
||||||
|
<p>Organizations often utilize contracts for service when they require tasks or projects that fall outside their normal business
|
||||||
|
operations. While the relationship between a payer and a self-employed contractor may resemble that of an employer and
|
||||||
|
employee, there is a key distinction. In a contract for service, the payer specifies the desired outcome or deliverable, but
|
||||||
|
not how the work should be completed. In contrast, a contract of service allows the employer to direct both the tasks and the
|
||||||
|
method by which they are carried out, establishing a more controlled, employee-based relationship.</p>
|
||||||
|
<p>Under a contract for service, the payer exercises general oversight to ensure that the agreed work is completed as specified.
|
||||||
|
However, this oversight does not extend to controlling how the work is performed. The self-employed individual retains
|
||||||
|
autonomy over the methods used to complete the tasks. Receiving general instructions from a project manager or similar
|
||||||
|
representative does not establish an employer-employee relationship.</p>
|
||||||
|
<p>An employee-employer relationship is recognized when an organization has the authority to direct and control both the work and
|
||||||
|
the manner in which it is performed. If there is uncertainty about whether such a relationship exists, the Canada Revenue
|
||||||
|
Agency (CRA) recommends submitting Form CPT1 — Request for a CPP/EI Ruling: Employee or Self-Employed? — to obtain
|
||||||
|
clarification. A sample of this form can be found at the end of this section.</p>
|
||||||
|
<p>Independent contractors or self-employed individuals are not classified as employees if no employer-employee relationship is
|
||||||
|
present. They typically submit invoices and receive payment through accounts payable. However, the act of submitting an
|
||||||
|
invoice alone is not sufficient to confirm self-employment status. Proper assessment of the working relationship is essential
|
||||||
|
sto ensure accurate classification and compliance with tax and labor regulations.</p>
|
||||||
|
</section>
|
||||||
|
</section>
|
||||||
|
<section id="factors-determining-the-type-of-contract">
|
||||||
|
<h2>Factors Determining the Type of Contract<a class="headerlink" href="#factors-determining-the-type-of-contract" title="Link to this heading">¶</a></h2>
|
||||||
|
<p>The CRA uses a two-step approach to examine the relationship between the worker and the
|
||||||
|
payer for relationships outside the province of Québec. The approach used for relationships
|
||||||
|
in the province of Québec will be discussed in a later chapter.</p>
|
||||||
|
<p><strong>Step 1:</strong>
|
||||||
|
The first step is to establish what the intent was when the worker and the payer entered into
|
||||||
|
the working arrangement. Did they intend to enter into an employee-employer relationship
|
||||||
|
(contract of service) or did they intend to enter into a business relationship (contract for
|
||||||
|
service). The CRA must determine not only how the working relationship has been defined
|
||||||
|
but why it was defined that way.</p>
|
||||||
|
<p><strong>Step 2:</strong>
|
||||||
|
The CRA then considers certain factors when determining if a contract of service or a
|
||||||
|
contract for service exists. In order to understand the working relationship and verify that the
|
||||||
|
intent of the worker and the payer is reflected in the facts, they will ask a series of questions
|
||||||
|
that relate to the following factors:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>the level of control the payer has over the worker</p></li>
|
||||||
|
<li><p>whether or not the worker provides the tools and equipment</p></li>
|
||||||
|
<li><p>whether the worker can subcontract the work or hire assistants</p></li>
|
||||||
|
<li><p>the degree of financial risk taken by the worker</p></li>
|
||||||
|
<li><p>the degree of responsibility for investment and management held by the worker</p></li>
|
||||||
|
<li><p>the worker’s opportunity for profit</p></li>
|
||||||
|
<li><p>any other relevant factors, such as written contracts</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>The CRA will look at the answers independently and then together and consider whether or
|
||||||
|
not they reflect the intent that was originally stated. Considered individually, the response to
|
||||||
|
each of these questions is not conclusive; however, when weighed together, certain
|
||||||
|
conclusions may be drawn. When there is no common intent, the CRA will decide if the
|
||||||
|
answers are more consistent with a contract of service or a contract for service.
|
||||||
|
Each of these factors will be discussed in the material and indicators showing whether the
|
||||||
|
worker is an employee or self-employed will be provided.</p>
|
||||||
|
<section id="control">
|
||||||
|
<h3>Control<a class="headerlink" href="#control" title="Link to this heading">¶</a></h3>
|
||||||
|
<p>One of the key factors in determining a worker’s status is the extent to which the payer has the ability, authority, or
|
||||||
|
right to control both what work is performed and how it is carried out. Equally important is the level of independence the
|
||||||
|
worker maintains in performing their duties.</p>
|
||||||
|
<p>In evaluating the relationship, both the payer’s oversight of the worker’s day-to-day activities and their overall
|
||||||
|
influence are assessed. However, it is the payer’s right to exercise control—rather than whether that control is actively
|
||||||
|
used—that holds the most weight in determining the nature of the working relationship.</p>
|
||||||
|
<p>Worker is an <em>Employee</em> when:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>The relationship is one of subordination.</p></li>
|
||||||
|
<li><p>The payer will often direct, scrutinize, and effectively control many elements of how the work is performed.</p></li>
|
||||||
|
<li><p>The payer controls both the results of the work and the method used to do the work.</p></li>
|
||||||
|
<li><p>The payer determines what jobs the worker will do.</p></li>
|
||||||
|
<li><p>The worker receives training or direction from the payer on how to do the work.</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>Worker is a <em>Self-Employed</em> when:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>Individual usually works independently, does not have anyone overseeing them.</p></li>
|
||||||
|
<li><p>The worker is usually free to work when and for whom they choose and may provide their services to different payers at the same time.</p></li>
|
||||||
|
<li><p>The worker can accept or refuse work from the payer.</p></li>
|
||||||
|
<li><p>The working relationship between the payer and the worker does not present a degree of continuity, loyalty, security, subordination, or integration.</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
</section>
|
||||||
|
<section id="tools-and-equipment">
|
||||||
|
<h3>Tools and Equipment<a class="headerlink" href="#tools-and-equipment" title="Link to this heading">¶</a></h3>
|
||||||
|
<p>Ownership of tools and equipment is not a definitive factor in determining the nature of a working relationship or the type
|
||||||
|
of contract in place. While self-employed individuals often use their own tools to fulfill contractual obligations—making
|
||||||
|
such ownership common in business relationships—this alone does not confirm self-employment. Employees may also be required
|
||||||
|
to supply their own tools, depending on the trade or occupation.</p>
|
||||||
|
<p>In typical employee-employer relationships, the employer provides the necessary equipment and assumes the costs associated
|
||||||
|
with its use, including maintenance, insurance, transportation, rental fees, and operational expenses such as fuel. However,
|
||||||
|
in certain industries—such as automotive repair, painting, carpentry, and technical fields like software development or
|
||||||
|
surveying—it is standard practice for employees to use their own tools or specialized instruments.</p>
|
||||||
|
<p>In contrast, self-employed individuals not only supply their own equipment but also bear the associated costs. Significant
|
||||||
|
financial investment in tools—especially those that require ongoing maintenance or replacement—can suggest a business
|
||||||
|
relationship, as these individuals assume both the potential for profit and the risk of loss.</p>
|
||||||
|
<p>Ultimately, the key consideration is the scale of the investment and the financial responsibility related to repairs,
|
||||||
|
replacement, and insurance, rather than mere ownership itself.</p>
|
||||||
|
<p>The worker is an employee when:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>The payer supplies most of the tools and equipment.</p></li>
|
||||||
|
<li><p>The payer retains the right of use over the tools and equipment provided to the worker.</p></li>
|
||||||
|
<li><p>The worker supplies the tools and equipment and the payer reimburses the worker for their use</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>The worker is a self-employed individual when:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>The worker provides the tools and equipment required and is responsible for the cost of repairs, insurance and maintenance and retains the right over the use of these assets.</p></li>
|
||||||
|
<li><p>The worker supplies his or her own workspace, is responsible for the costs to maintain it, and does substantial work from that site.</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
</section>
|
||||||
|
<section id="subcontracting-work-or-hiring-assistants">
|
||||||
|
<h3>Subcontracting Work or Hiring Assistants<a class="headerlink" href="#subcontracting-work-or-hiring-assistants" title="Link to this heading">¶</a></h3>
|
||||||
|
<p>As subcontracting work or hiring assistants can affect a worker’s chance of profit or risk of loss, this can help determine
|
||||||
|
the type of business relationship.</p>
|
||||||
|
<p>The worker is an employee when:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>The worker cannot hire helpers or assistants.</p></li>
|
||||||
|
<li><p>The worker must perform the services personally.</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>The worker is a self-employed individual when:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>The worker does not have to perform the service personally.</p></li>
|
||||||
|
<li><p>They can hire another party to complete the work, without consulting with the payer.</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
</section>
|
||||||
|
<section id="financial-risk">
|
||||||
|
<h3>Financial Risk<a class="headerlink" href="#financial-risk" title="Link to this heading">¶</a></h3>
|
||||||
|
<p>When evaluating the nature of a working relationship, the Canada Revenue Agency (CRA) considers whether the individual
|
||||||
|
incurs fixed, ongoing costs or unreimbursed expenses. In traditional employee arrangements, employers typically reimburse
|
||||||
|
expenses that arise as part of the job—for example, travel or business-related costs.</p>
|
||||||
|
<p>In contrast, self-employed individuals often assume greater financial risk by covering recurring operational costs
|
||||||
|
regardless of whether active work is being performed. These may include equipment leasing, office space rental, or other
|
||||||
|
business overheads. While both employees and contractors may receive reimbursement for certain expenses, the CRA places
|
||||||
|
particular emphasis on identifying costs that are not reimbursed. The presence of such expenses may indicate a business
|
||||||
|
relationship, reflecting the independence and financial responsibility characteristic of self-employment.</p>
|
||||||
|
<p>The worker is an employee when:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>The worker is not usually responsible for any operating expenses.</p></li>
|
||||||
|
<li><p>The worker is not financially liable if he or she does not fulfill the obligations of the contract.</p></li>
|
||||||
|
<li><p>The payer determines and controls the method and amount of pay.</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>The worker is a self-employed individual when:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>The worker is financially liable if he or she does not fulfill the obligations of the contract.</p></li>
|
||||||
|
<li><p>The worker does not receive any protection or benefits from the payer.</p></li>
|
||||||
|
<li><p>The worker hires helpers to assist and pays them.</p></li>
|
||||||
|
<li><p>The worker advertises the services offered.</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
</section>
|
||||||
|
<section id="responsibility-for-investment-and-management">
|
||||||
|
<h3>Responsibility for Investment and Management<a class="headerlink" href="#responsibility-for-investment-and-management" title="Link to this heading">¶</a></h3>
|
||||||
|
<p>When assessing whether a business relationship exists, one important indicator is the worker’s financial investment in the
|
||||||
|
services they provide. If an individual is required to invest in equipment, materials, or other resources to complete the
|
||||||
|
work, this suggests the presence of a contract for service rather than an employment relationship.</p>
|
||||||
|
<p>Another key factor is decision-making authority related to financial outcomes. When the worker independently makes business
|
||||||
|
decisions that influence their profit or loss—such as pricing, project selection, or service delivery methods—it further
|
||||||
|
supports the classification of a self-employed individual operating under a business arrangement. These characteristics
|
||||||
|
reflect the autonomy and financial risk typically associated with self-employment.</p>
|
||||||
|
<p>The worker is an employee when:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>The worker has no capital investment in the business.</p></li>
|
||||||
|
<li><p>The worker does not have a business presence.</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>The worker is a self-employed individual when:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>The worker has capital investment, manages his or her staff, hires and pays individuals to help perform the work, and has established a business presence.</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
</section>
|
||||||
|
<section id="opportunity-for-profit">
|
||||||
|
<h3>Opportunity for Profit<a class="headerlink" href="#opportunity-for-profit" title="Link to this heading">¶</a></h3>
|
||||||
|
<p>A business relationship is often indicated when a worker has the ability to realize a profit or incur a loss, reflecting their
|
||||||
|
control over the financial and operational aspects of the services they provide. Self-employed individuals typically
|
||||||
|
negotiate their own rates, choose which contracts to accept, and may take on multiple contracts simultaneously. To fulfill
|
||||||
|
contractual obligations, they often incur and manage expenses, which directly influence their potential for profit.</p>
|
||||||
|
<p>In contrast, employees generally do not bear financial risk or benefit from profit. While commission-based employees may
|
||||||
|
increase their earnings through performance, this does not represent profit in the traditional sense, as it does not reflect
|
||||||
|
income earned beyond expenses. Moreover, employees do not typically share in a business’s profits or losses.</p>
|
||||||
|
<p>When assessing worker classification, the Canada Revenue Agency (CRA) considers the extent to which the individual controls
|
||||||
|
their revenue and expenses. Another key factor is the method of payment: employees are usually compensated at a fixed rate
|
||||||
|
based on a consistent pay schedule (e.g., hourly, weekly, or annually). Self-employed individuals, however, are often paid a
|
||||||
|
flat rate for a specific job, especially when they absorb related costs—an arrangement that commonly signals a business
|
||||||
|
relationship.</p>
|
||||||
|
<p>The worker is an employee when:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>The worker is not in a position to realize a business profit or loss.</p></li>
|
||||||
|
<li><p>The worker is entitled to benefit plans that are normally only offered to employees.</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>The worker is a self-employed individual when:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>The worker is compensated by a flat fee.</p></li>
|
||||||
|
<li><p>The worker can hire and pay a substitute.</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>The worker is an employee when:</p>
|
||||||
|
<p>The worker is a self-employed individual when:</p>
|
||||||
|
</section>
|
||||||
|
</section>
|
||||||
|
<section id="review-summary">
|
||||||
|
<h2>Review Summary<a class="headerlink" href="#review-summary" title="Link to this heading">¶</a></h2>
|
||||||
|
<p>Employment relationships are defined through contractual arrangements. A contract of service refers to a traditional
|
||||||
|
employer-employee relationship, where an individual commits to working for an employer—either on a full-time or part-time
|
||||||
|
basis—for a specified or ongoing period. The employer has authority over both the duties and how they are executed.</p>
|
||||||
|
<p>Conversely, a contract for service reflects a business arrangement where an independent contractor agrees to perform specific
|
||||||
|
tasks, with discretion over how the work is completed. This signifies a client-provider relationship rather than an employment
|
||||||
|
one.</p>
|
||||||
|
<p>To assess worker classification—particularly outside Québec—the Canada Revenue Agency (CRA) employs a two-step evaluation. Key
|
||||||
|
considerations include:</p>
|
||||||
|
<p>Control: Whether the payer holds the right to determine what work is done and how it is executed.</p>
|
||||||
|
<p>Independence: The degree of autonomy exercised by the worker.</p>
|
||||||
|
<p>Ownership of Tools: Significant investment in tools and equipment, along with maintenance and insurance responsibilities, may indicate a business relationship.</p>
|
||||||
|
<p>Financial Risk: Ongoing operational costs or unreimbursed expenses reflect a higher likelihood of self-employment.</p>
|
||||||
|
<p>Revenue Control: The ability to manage pricing, accept multiple contracts, and influence earnings supports classification under a contract for service.</p>
|
||||||
|
<p>Collectively, these factors guide proper categorization for legal and tax purposes, helping organizations ensure compliance and mitigate potential risk.</p>
|
||||||
|
</section>
|
||||||
|
<section id="review-questions">
|
||||||
|
<h2>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>
|
||||||
|
<blockquote>
|
||||||
|
<div><p>The primary objective of the payroll department is to pay employees accurately and
|
||||||
|
on time, in compliance with the legislative requirements for a full annual payroll
|
||||||
|
cycle.</p>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>List four definitions of payroll.</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>the department that administers the payroll</p></li>
|
||||||
|
<li><p>the total number of people employed by an organization</p></li>
|
||||||
|
<li><p>the wages and salaries paid out in a year</p></li>
|
||||||
|
<li><p>a list of employees to be paid and the amount due to each</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>List the three types of payroll management stakeholders and provide an example of each.</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><p>Payroll management stakeholders are government (federal and provincial/territorial), internal
|
||||||
|
(employees, employers and other departments) and external (benefit carriers, courts, unions, pension
|
||||||
|
providers, charities, third party administrators and outsource/software vendors).</p>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>Explain the difference between legislation and regulation.</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><p>Legislation determines what the rules are, while regulations determine how the rules are to be applied.</p>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>What are two examples of sources of information that you use (or could use) to keep upto-date on payroll compliance changes?</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><p>The Canadian Payroll Association offers Payroll InfoLine, a phone-in and e-mail information service for members</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>The Canada Revenue Agency (CRA) produces guides, publications and Income Tax Bulletins, folios and Circulars, posts news bulletins and enables</p></li>
|
||||||
|
</ul>
|
||||||
|
<p>participation on an electronic mailing list with e-mail alerts for new content to the site
|
||||||
|
- The Revenu Québec (RQ) website provides guides, publications, bulletins, forms, online services and enables participation on an electronic mailing list with e-mail notifications of tax news articles
|
||||||
|
- Employment/labour standards (federal, provincial and territorial) publications and websites
|
||||||
|
- Employment and Social Development Canada (ESDC) and Service Canada (SC) publications including information regarding the Employment Insurance (EI) program and the Social Insurance Number
|
||||||
|
- CCH Canada Limited publishes a series of volumes on employment and labour law, pensions and benefits, etc., that supplies information on legislation with regular updates as changes become law
|
||||||
|
- Carswell publishes The Canadian Payroll Manual and offers a phone-in service to subscribers</p>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>Copies of legislation are available from the printing offices of the federal, provincial and territorial governments as well as through government websites.</p>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>List three external stakeholders and explain their compliance requirements.</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><p>Benefit Carriers - 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 - Payroll must accurately deduct and remit amounts ordered to be withheld through garnishments, third party demands, requirements to pay and support deduction orders.
|
||||||
|
Unions - Payroll must accurately deduct and remit union dues and initiation fees, and ensure that the terms of the collective agreement are adhered to.
|
||||||
|
Pension Providers - Third party pension plan providers may require payroll to provide enrolment reports on participating employees and length of service calculations, and to remit employee deductions and employer contributions.</p>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>Indicate the jurisdiction the following employees fall under:</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><ul class="simple">
|
||||||
|
<li><p>Canada Post Corporation (F)</p></li>
|
||||||
|
<li><p>An insurance company (P)</p></li>
|
||||||
|
<li><p>A uranium mining company (F)</p></li>
|
||||||
|
<li><p>Canadian Broadcasting Corporation (F)</p></li>
|
||||||
|
<li><p>A retail department store with locations in every province (P)</p></li>
|
||||||
|
<li><p>A chartered bank (F)</p></li>
|
||||||
|
</ul>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>What is the difference between a contract of service and a contract for service?</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><p>A contract of service is an arrangement whereby an individual (the employee) agrees to work on a full-time or part-time basis for an employer for a specified or indeterminate period of time.</p>
|
||||||
|
<p>A contract for service is a business relationship whereby one party agrees to perform certain specific work stipulated in the contract for another party.</p>
|
||||||
|
</div></blockquote>
|
||||||
|
<p>What are the factors that the Canada Revenue Agency (CRA) considers when
|
||||||
|
determining if a contract of service or a contract for service exists?</p>
|
||||||
|
<p>Please consider the following scenario.</p>
|
||||||
|
<blockquote>
|
||||||
|
<div><p>You are a payroll professional working for a large manufacturing company. Your
|
||||||
|
organization has had many change initiatives over the last number of years including
|
||||||
|
three mergers and two large group terminations. Your company endorses the use of
|
||||||
|
consultants rather than growing the number of permanent employees.</p>
|
||||||
|
<p>Write a memo to your supervisor, who is the Chief Financial Officer of the company, to
|
||||||
|
explain why your role must coordinate with the Accounts Payable Department to ensure
|
||||||
|
that these payments are being handled correctly. Please prepare your answer in a separate
|
||||||
|
document.</p>
|
||||||
|
<p><em>At the last weekly Finance meeting, Tom and I discussed the increase in the number of contractor invoices being
|
||||||
|
processed through accounts payable (AP). We have some concerns as to whether these individuals would be considered truly
|
||||||
|
selfemployed by the Canada Revenue Agency (CRA), or whether the CRA would determine them to be employees.</em></p>
|
||||||
|
<p><em>If the worker is considered self-employed, then payment, on submission of an invoice, will continue to be handled by AP. If, however, the worker is considered an
|
||||||
|
employee, they would have to be set up on payroll, as they would be in receipt of income from employment, subject to all legislated statutory withholdings.</em></p>
|
||||||
|
<p><em>I have attached the CRA’s form Request for a CPP/EI Ruling - Employee or SelfEmployed? - CPT1 for your information. This form can be completed by the
|
||||||
|
company and sent with supporting documentation, such as the terms and conditions of the contract, for a ruling from the CRA on the individual’s status.</em></p>
|
||||||
|
<p><em>I think that Payroll must coordinate with the Accounts Payable Department to ensure that these payments are being handled correctly.</em></p>
|
||||||
|
<p><em>Tom and I would be pleased to meet with you to ensure the company is in
|
||||||
|
compliance with all legislative requirements. Would you be available next Friday
|
||||||
|
morning at 10:00 to discuss?</em></p>
|
||||||
|
</div></blockquote>
|
||||||
|
</section>
|
||||||
|
</section>
|
||||||
|
|
||||||
|
|
||||||
|
<div class="clearer"></div>
|
||||||
|
</div>
|
||||||
|
</div>
|
||||||
|
</div>
|
||||||
|
<div class="sphinxsidebar" role="navigation" aria-label="Main">
|
||||||
|
<div class="sphinxsidebarwrapper">
|
||||||
|
<div>
|
||||||
|
<h3><a href="index.html">Table of Contents</a></h3>
|
||||||
|
<ul>
|
||||||
|
<li><a class="reference internal" href="#">EMPLOYEE vs. INDEPENDENT CONTRACTOR</a><ul>
|
||||||
|
<li><a class="reference internal" href="#the-employee-employer-relationship">The Employee-Employer Relationship</a><ul>
|
||||||
|
<li><a class="reference internal" href="#contract-of-service-employment">Contract of Service (Employment)</a></li>
|
||||||
|
<li><a class="reference internal" href="#contract-for-service-subcontracting">Contract for Service (Subcontracting)</a></li>
|
||||||
|
</ul>
|
||||||
|
</li>
|
||||||
|
<li><a class="reference internal" href="#factors-determining-the-type-of-contract">Factors Determining the Type of Contract</a><ul>
|
||||||
|
<li><a class="reference internal" href="#control">Control</a></li>
|
||||||
|
<li><a class="reference internal" href="#tools-and-equipment">Tools and Equipment</a></li>
|
||||||
|
<li><a class="reference internal" href="#subcontracting-work-or-hiring-assistants">Subcontracting Work or Hiring Assistants</a></li>
|
||||||
|
<li><a class="reference internal" href="#financial-risk">Financial Risk</a></li>
|
||||||
|
<li><a class="reference internal" href="#responsibility-for-investment-and-management">Responsibility for Investment and Management</a></li>
|
||||||
|
<li><a class="reference internal" href="#opportunity-for-profit">Opportunity for Profit</a></li>
|
||||||
|
</ul>
|
||||||
|
</li>
|
||||||
|
<li><a class="reference internal" href="#review-summary">Review Summary</a></li>
|
||||||
|
<li><a class="reference internal" href="#review-questions">Review Questions</a></li>
|
||||||
|
</ul>
|
||||||
|
</li>
|
||||||
|
</ul>
|
||||||
|
|
||||||
|
</div>
|
||||||
|
<div role="note" aria-label="source link">
|
||||||
|
<h3>This Page</h3>
|
||||||
|
<ul class="this-page-menu">
|
||||||
|
<li><a href="_sources/3_contracts.rst.txt"
|
||||||
|
rel="nofollow">Show Source</a></li>
|
||||||
|
</ul>
|
||||||
|
</div>
|
||||||
|
<search id="searchbox" style="display: none" role="search">
|
||||||
|
<h3 id="searchlabel">Quick search</h3>
|
||||||
|
<div class="searchformwrapper">
|
||||||
|
<form class="search" action="search.html" method="get">
|
||||||
|
<input type="text" name="q" aria-labelledby="searchlabel" autocomplete="off" autocorrect="off" autocapitalize="off" spellcheck="false"/>
|
||||||
|
<input type="submit" value="Go" />
|
||||||
|
</form>
|
||||||
|
</div>
|
||||||
|
</search>
|
||||||
|
<script>document.getElementById('searchbox').style.display = "block"</script>
|
||||||
|
</div>
|
||||||
|
</div>
|
||||||
|
<div class="clearer"></div>
|
||||||
|
</div>
|
||||||
|
<div class="related" role="navigation" aria-label="Related">
|
||||||
|
<h3>Navigation</h3>
|
||||||
|
<ul>
|
||||||
|
<li class="right" style="margin-right: 10px">
|
||||||
|
<a href="genindex.html" title="General Index"
|
||||||
|
>index</a></li>
|
||||||
|
<li class="nav-item nav-item-0"><a href="index.html">🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</a> »</li>
|
||||||
|
<li class="nav-item nav-item-this"><a href="">EMPLOYEE vs. INDEPENDENT CONTRACTOR</a></li>
|
||||||
|
</ul>
|
||||||
|
</div>
|
||||||
|
<div class="footer" role="contentinfo">
|
||||||
|
© Copyright 2025.
|
||||||
|
Created using <a href="https://www.sphinx-doc.org/">Sphinx</a> 8.2.3.
|
||||||
|
</div>
|
||||||
|
</body>
|
||||||
|
</html>
|
||||||
400
docs/build/html/_sources/1_introduction.rst.txt
vendored
Normal file
400
docs/build/html/_sources/1_introduction.rst.txt
vendored
Normal file
@@ -0,0 +1,400 @@
|
|||||||
|
####################################
|
||||||
|
INTRODUCTION TO CANADIAN PAYROLL
|
||||||
|
####################################
|
||||||
|
|
||||||
|
Payroll is a necessary function in every organization that has employees,
|
||||||
|
as each employee expects to be paid for the work they perform. While the
|
||||||
|
amount of maximum remuneration that an employee receives for their work is
|
||||||
|
not legislated by any government (unless the employee is a federal or
|
||||||
|
provincial/territorial civil servant), there is legislation in place at
|
||||||
|
both the federal and provincial/territorial levels that governs many
|
||||||
|
aspects of processing employees' pay, their taxable benefits and observing
|
||||||
|
their rights as employees.
|
||||||
|
|
||||||
|
t is important to note that this course deals with payroll, the function of paying employees
|
||||||
|
for work performed for employers. Self-employed workers or contractors, who submit
|
||||||
|
invoices for the work they perform and receive payment through accounts payable and not
|
||||||
|
payroll, are not employees.
|
||||||
|
|
||||||
|
Both the federal and the Québec governments provide factors that can be used to determine
|
||||||
|
whether an employee-employer relationship exists. It is crucial to know how to determine the
|
||||||
|
type of relationship that exists between the worker and the organization and to ensure that
|
||||||
|
any payments made comply with legislation.
|
||||||
|
|
||||||
|
Payroll Objectives and Definitions
|
||||||
|
===================================
|
||||||
|
|
||||||
|
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.
|
||||||
|
|
||||||
|
Every employee expects to receive their pay on the day it is due in the
|
||||||
|
manner arranged with their employer, either by cheque or direct deposit.
|
||||||
|
In addition to ensuring that employees have been paid, payroll
|
||||||
|
practitioners must also be able to communicate payroll information to
|
||||||
|
all stakeholders.
|
||||||
|
|
||||||
|
- **Payroll** is the process of paying employees in exchange for the services they perform.
|
||||||
|
|
||||||
|
- **Legislation** refers to laws enacted by a legislative body. In Canada
|
||||||
|
there are many legislative sources that payroll practitioners must comply
|
||||||
|
with at two separate levels: the federal and the provincial/territorial
|
||||||
|
governments. Later in the chapter we will explore the compliance
|
||||||
|
requirements for the various pieces of legislation from these sources.
|
||||||
|
|
||||||
|
- **Compliance** is the observance of official requirements. For payroll
|
||||||
|
practitioners, this means performing payroll functions according to
|
||||||
|
federal and provincial/territorial legislative and non-governmental
|
||||||
|
stakeholder requirements.
|
||||||
|
|
||||||
|
The legislative requirements are termed **statutory**. This means they are
|
||||||
|
enacted, created, or regulated by statute, a law enacted by the legislative
|
||||||
|
branch of a government. Fines and penalties can be imposed if an organization
|
||||||
|
is not in compliance with the legislative requirements in each jurisdiction.
|
||||||
|
|
||||||
|
When dealing with federal and provincial/territorial government agencies,
|
||||||
|
payroll administrator must know the many pieces of legislation that
|
||||||
|
regulate their work and the compliance requirements associated with each.
|
||||||
|
Payroll administrators are responsible for ensuring their organization is
|
||||||
|
compliant with all payroll related legislation, thus eliminating the
|
||||||
|
potential for any fines or penalties.
|
||||||
|
|
||||||
|
In payroll, there are also compliance requirements from other non-government stakeholders,
|
||||||
|
for example, union collective agreements or group insurance policies. Payroll administrator
|
||||||
|
must therefore ensure the organization is compliant with all stakeholder requirements.
|
||||||
|
|
||||||
|
The responsibilities of the payroll administrator 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, finance and administration in
|
||||||
|
the organization.
|
||||||
|
|
||||||
|
Small and medium-sized organizations may have payroll administrators whose
|
||||||
|
positions include other functions that, in a larger organization, would
|
||||||
|
fall under other departments. This payroll practitioner may be required to
|
||||||
|
handle multiple tasks, such as employee recruitment, human resource policy
|
||||||
|
development, benefits administration, accounts payable, accounts receivable,
|
||||||
|
budgets and/or administration.
|
||||||
|
|
||||||
|
Larger organizations may have a distinct payroll department with specific
|
||||||
|
payroll positions, in addition to separate human resources, accounting and
|
||||||
|
administration groups. Even in a multi-departmental organization, payroll
|
||||||
|
administrators must have knowledge of the various stages of the life cycle
|
||||||
|
of an employee. From hiring through termination of employment, many of
|
||||||
|
these stages will impact how to produce the employee's pay and prepare
|
||||||
|
required reports.
|
||||||
|
|
||||||
|
The payroll department in a large organization may have:
|
||||||
|
|
||||||
|
- payroll administrators who are responsible for entering payroll data into the system and making required payroll remittances
|
||||||
|
|
||||||
|
- payroll coordinators who are responsible for preparing the payroll journal entries and reconciling the payroll related accounts
|
||||||
|
|
||||||
|
- payroll managers who manage the payroll function, the payroll staff and represent payroll at the management level
|
||||||
|
|
||||||
|
Legislation vs. regulation
|
||||||
|
~~~~~~~~~~~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
**The legislation** specifies the __requirements__.
|
||||||
|
|
||||||
|
**The regulation** specifies the __methods__ of applying the legislation.
|
||||||
|
|
||||||
|
Payroll Content Knowledge
|
||||||
|
~~~~~~~~~~~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
Payroll administrators should know the following to effectively perform
|
||||||
|
their duties:
|
||||||
|
- **Payroll Compliance Legislation:** the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act, Employment/Labour Standards, privacy legislation, Workers' Compensation and provincial/territorial payroll-specific legislation
|
||||||
|
|
||||||
|
- **Payroll Processes:** the remuneration and deduction components of payroll and how to use these components to calculate a net pay in both regular and non-regular circumstances
|
||||||
|
|
||||||
|
- **Payroll Reporting:** how to calculate and remit amounts due to government agencies, insurance companies, unions and other third parties.
|
||||||
|
|
||||||
|
In addition, payroll reporting includes accounting for payroll expenses and accruals to internal financial systems and federal and provincial/territorial year-end reporting.
|
||||||
|
|
||||||
|
Technical Skills
|
||||||
|
~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
The technical skills required by payroll professionals include proficiency in
|
||||||
|
computer programs such as payroll software and financial systems,
|
||||||
|
spreadsheets, databases and word processing.
|
||||||
|
|
||||||
|
Organizations often change their payroll and business systems to meet new
|
||||||
|
technology requirements and corporate reporting needs. It is important for
|
||||||
|
payroll personnel to have the ability to be adaptable to changing systems.
|
||||||
|
As a payroll practitioner, you must be prepared and willing to embrace
|
||||||
|
continuous learning.
|
||||||
|
|
||||||
|
Personal and Professional Skills
|
||||||
|
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
The following personal and professional skills will assist payroll
|
||||||
|
administrators in dealing with the various stakeholders involved in the
|
||||||
|
payroll process:
|
||||||
|
|
||||||
|
- written communication skills, such as preparing employee emails and memos, management reports, policies and procedures and correspondence with various levels of government
|
||||||
|
|
||||||
|
- verbal communication skills, to be able to respond to internal and external stakeholder inquiries
|
||||||
|
|
||||||
|
- the ability to read, understand and interpret legal terminology found in documents such as collective agreements, benefit contracts and government regulations
|
||||||
|
|
||||||
|
- excellent mathematical skills to perform various calculations
|
||||||
|
|
||||||
|
- problem solving, decision-making, time management and organizational skills
|
||||||
|
|
||||||
|
Behavioural and Ethical Standards
|
||||||
|
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
Behaviour and ethics are two areas that build on the skills that an effective payroll practitioner
|
||||||
|
must have. Effective payroll professionals should be:
|
||||||
|
|
||||||
|
- trustworthy, as the potential for fraud is ever present
|
||||||
|
|
||||||
|
- conscientious, with a keen attention to detail
|
||||||
|
|
||||||
|
- discreet, due to the confidential nature of information being handled
|
||||||
|
|
||||||
|
- tactful in dealing with employees who can be very sensitive when
|
||||||
|
discussing their financial issues
|
||||||
|
|
||||||
|
- perceptive, able to understand all sides of an issue
|
||||||
|
|
||||||
|
- able to work under the pressures of absolute deadlines
|
||||||
|
|
||||||
|
- able to use common sense in order to recognize problems quickly and
|
||||||
|
apply sound solutions
|
||||||
|
|
||||||
|
- able to remain objective and maintain a factual perspective when
|
||||||
|
dealing with questions and inquiries
|
||||||
|
|
||||||
|
Payroll Stakeholders
|
||||||
|
=====================
|
||||||
|
|
||||||
|
**Stakeholders** are the individuals, groups and agencies, both internal
|
||||||
|
and external to the organization, who share an interest in the function and
|
||||||
|
output of the payroll department. Stakeholders can be considered customers of the payroll department and payroll practitioners
|
||||||
|
can take a proactive customer service approach to serving these individuals and groups.
|
||||||
|
|
||||||
|
Payroll Management Stakeholders
|
||||||
|
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
**Payroll Management Stakeholders** are the federal and provincial/territorial governments,
|
||||||
|
the internal stakeholders and the external stakeholders. Internal stakeholders
|
||||||
|
include employees, employers and other departments within the organization.
|
||||||
|
External stakeholders include benefit carriers, courts, unions, pension
|
||||||
|
providers, charities, third party administrators and outsource/software vendors.
|
||||||
|
|
||||||
|
Government Stakeholders
|
||||||
|
~~~~~~~~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
Government legislation provides the rules and regulations that the payroll function must
|
||||||
|
administer with respect to payments made to employees. For this reason, it is important for
|
||||||
|
the payroll practitioner to understand both the scope and the source of payroll-related
|
||||||
|
legislation.
|
||||||
|
|
||||||
|
Canada is ruled by a federal government with ten largely self-governing provinces and three
|
||||||
|
territories controlled by the federal government. Payroll practitioners have to be compliant
|
||||||
|
not only with the federal government legislation, but with the provincial and territorial
|
||||||
|
governments' legislation as well.
|
||||||
|
|
||||||
|
As a result, payroll practitioners and their organizations are affected by the enactment of
|
||||||
|
legislation at both the federal and provincial/territorial level.
|
||||||
|
The federal parliament has the power to make laws for the peace, order and good government
|
||||||
|
of Canada. The federal cabinet is responsible for most of the legislation introduced by
|
||||||
|
parliament, and has the sole power to prepare and introduce tax legislation involving the
|
||||||
|
expenditure of public money.
|
||||||
|
|
||||||
|
The provincial/territorial legislatures have power over direct taxation in the province or
|
||||||
|
territory for the purposes of natural resources, prisons (except for federal penitentiaries),
|
||||||
|
charitable institutions, hospitals (except marine hospitals), municipal institutions, education,
|
||||||
|
licences for provincial/territorial and municipal revenue purposes, local works, incorporation
|
||||||
|
of provincial/territorial organizations, the creation of courts and the administration of justice,
|
||||||
|
fines and penalties for breaking provincial/territorial laws.
|
||||||
|
|
||||||
|
In the case of old age, disability, and survivor's pensions, again both the federal and
|
||||||
|
provincial/territorial governments have power. In this instance, if their laws conflict, the
|
||||||
|
provincial/territorial power prevails.
|
||||||
|
|
||||||
|
The federal government cannot transfer any of its powers to a provincial/territorial
|
||||||
|
legislature, nor can a provincial/territorial legislature transfer any of its powers to the federal
|
||||||
|
government. The federal government can, however, delegate the administration of a federal
|
||||||
|
act to a provincial/territorial agency, and a provincial/territorial legislature can delegate the
|
||||||
|
administration of a provincial/territorial act to a federal agency.
|
||||||
|
|
||||||
|
Federal Government
|
||||||
|
~~~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
The *Constitution Act of 1867* outlined the division of legislative power and authority between
|
||||||
|
federal and provincial/territorial jurisdictional governments. The exclusive legislative
|
||||||
|
authority of the Parliament of Canada extends to all matters regarding:
|
||||||
|
|
||||||
|
- the regulation of trade and commerce
|
||||||
|
|
||||||
|
- the raising of money by any mode or system of taxation
|
||||||
|
|
||||||
|
- the borrowing of money on the public credit
|
||||||
|
|
||||||
|
- the postal service
|
||||||
|
|
||||||
|
- fixing and providing salaries and allowances for civil and other officers of the Government of Canada
|
||||||
|
|
||||||
|
- navigation and shipping
|
||||||
|
|
||||||
|
- ferries between a province and any British or foreign country or between two provinces
|
||||||
|
|
||||||
|
- criminal law, except the Constitution of Courts of Criminal Jurisdiction, but including the Procedure in Criminal Matters
|
||||||
|
|
||||||
|
- anything not specifically assigned to the provinces under this Act
|
||||||
|
|
||||||
|
|
||||||
|
The Canada Labour Code is legislation that consolidates certain statutes respecting labour.
|
||||||
|
Part I deals with Industrial Relations, Part II deals with Occupational Health and Safety and
|
||||||
|
Part III deals with Labour Standards. The primary objective of Part III is to establish and
|
||||||
|
protect employees' and employers' rights to fair and equitable conditions of employment.
|
||||||
|
|
||||||
|
Part III provisions establish minimum requirements concerning the working conditions of
|
||||||
|
employees under federal jurisdiction in the following industries and organizations:
|
||||||
|
|
||||||
|
- industries and undertakings of inter-provincial/territorial, national, or international nature, that is, transportation, communications, radio and television broadcasting, banking, uranium mining, grain elevators, and flour and feed operations
|
||||||
|
|
||||||
|
- 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.
|
||||||
|
|
||||||
|
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.
|
||||||
|
|
||||||
|
Trade unions negotiate with the employer, through collective bargaining, the wages, benefits,
|
||||||
|
allowances and other terms and conditions of employment on behalf of their member
|
||||||
|
employees. The outcome of negotiations is a collective agreement, which is a legally binding
|
||||||
|
contract between the employer, the union and the employees.
|
||||||
|
|
||||||
|
**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.
|
||||||
|
|
||||||
|
Content Review
|
||||||
|
==================
|
||||||
|
|
||||||
|
- 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.
|
||||||
|
|
||||||
|
- Payroll is the process of paying employees in exchange for the services they perform.
|
||||||
|
|
||||||
|
- Legislation refers to laws enacted by a legislative body.
|
||||||
|
|
||||||
|
- Compliance is the observance of official requirements.
|
||||||
|
|
||||||
|
- Payroll practitioner knowledge consists of information on payroll compliance legislation, payroll processes and payroll reporting as well as technical, personal and professional skills.
|
||||||
|
|
||||||
|
- Stakeholders are the individuals, groups and agencies, both internal and external to the organization, who share an interest in the function and output of the payroll department.
|
||||||
|
|
||||||
|
- Payroll management stakeholders are the federal and provincial/territorial governments, the internal stakeholders, and the external stakeholders. Internal stakeholders include employees, employers and other departments within the organization.
|
||||||
|
|
||||||
|
- External stakeholders include benefit carriers, courts, unions, pension providers, charities, third party administrators and outsource/software vendors.
|
||||||
|
|
||||||
|
- The federal parliament has the power to make laws for the peace, order and good government of Canada.
|
||||||
|
|
||||||
|
- The provincial/territorial legislatures have power over direct taxation in the province/territory for provincial/territorial purposes.
|
||||||
|
|
||||||
|
- Federal control exists over industries and undertakings of inter-provincial/territorial, national, or international nature and organizations whose operations have been declared for the general advantage of Canada or two or more provinces and Crown corporations.
|
||||||
|
|
||||||
|
- Provincial/territorial legislation exists over all laws regarding property and civil rights, and employment in manufacturing, mining, construction, wholesale and retail trade, service industries, local businesses and any industry or occupation not specifically covered under federal jurisdiction.
|
||||||
|
|
||||||
|
- Employers must follow the employment/labour standards legislated by the jurisdiction in which their employees work, unless they are governed by federal labour standards.
|
||||||
|
|
||||||
|
- Where legislation requires employer compliance, there are financial penalties or the possibility of legal action to encourage compliance.
|
||||||
|
|
||||||
|
Review Questions
|
||||||
|
=================
|
||||||
|
|
||||||
|
1. What is the primary objective of the payroll department?
|
||||||
|
|
||||||
|
2. List the three types of payroll management stakeholders and provide an example of each.
|
||||||
|
|
||||||
|
3. Explain the difference between legislation and regulation.
|
||||||
|
|
||||||
|
4. List three external stakeholders and explain their compliance requirements.
|
||||||
393
docs/build/html/_sources/3_contracts.rst.txt
vendored
Normal file
393
docs/build/html/_sources/3_contracts.rst.txt
vendored
Normal file
@@ -0,0 +1,393 @@
|
|||||||
|
====================================
|
||||||
|
EMPLOYEE vs. INDEPENDENT CONTRACTOR
|
||||||
|
====================================
|
||||||
|
|
||||||
|
The Employee-Employer Relationship
|
||||||
|
-----------------------------------
|
||||||
|
|
||||||
|
Determining the nature of the working relationship between an individual and an organization is essential in all employment situations. Whether the individual is classified as an employee or self-employed directly affects the statutory withholding requirements and the organization’s compliance with applicable legislation. To support this assessment, the Canada Revenue Agency (CRA) provides a set of guidelines designed to help distinguish between the two classifications. Importantly, the decision is not made by the worker but must be based on objective criteria and legal standards.
|
||||||
|
|
||||||
|
Payroll practitioners play an important role in promoting awareness of this distinction throughout the organization. By proactively communicating the significance of establishing a valid employee-employer relationship, payroll professionals help ensure that employment classifications are accurate and compliant.
|
||||||
|
|
||||||
|
Once an employee-employer relationship is confirmed, the payroll department becomes responsible for meeting compliance obligations related to statutory withholdings. This includes deducting the appropriate amounts—such as income tax, Canada Pension Plan contributions, and Employment Insurance premiums—from employee pay and remitting them to the government within the required timelines. Proper classification and adherence to these rules are key to maintaining legal and financial accountability.
|
||||||
|
|
||||||
|
Where an employee-employer relationship exists, the CRA requires the employer to:
|
||||||
|
|
||||||
|
- register with the Canada Revenue Agency for a Business Number (BN)
|
||||||
|
- withhold the statutory deductions of income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums on amounts paid to employees
|
||||||
|
- remit the amounts withheld as well as the required employer's share of CPP contributions and EI premiums to the Canada Revenue Agency
|
||||||
|
- report the employees' income and deductions on the appropriate information return
|
||||||
|
- give the employees copies of their T4 slips by the end of February of the following calendar year
|
||||||
|
|
||||||
|
Information on the factors to consider when determining whether an employee-employer relationship exists can be found in the
|
||||||
|
Canada Revenue Agency guide, Employee or Self-Employed? - RC4110. The guide is available on the CRA's website,
|
||||||
|
https://www.canada.ca/en/revenue-agency.html.
|
||||||
|
|
||||||
|
Contract of Service (Employment)
|
||||||
|
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
A **contract of service** is an arrangement whereby an individual (the employee) agrees to
|
||||||
|
work on a full-time or part-time basis for an employer for a specified or indeterminate period
|
||||||
|
of time.
|
||||||
|
|
||||||
|
Under a contract of service, one party serves another in return for a salary or some other form
|
||||||
|
of remuneration.
|
||||||
|
|
||||||
|
Contract for Service (Subcontracting)
|
||||||
|
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
A **contract for service** is a business relationship whereby one party agrees to perform certain
|
||||||
|
specific work stipulated in the contract for another party. It usually calls for the
|
||||||
|
accomplishment of a clearly defined task but does not normally require that the contracting
|
||||||
|
party do anything him/herself. A person who carries out a contract for service may be
|
||||||
|
considered a contract worker, a self-employed person or an independent contractor.
|
||||||
|
|
||||||
|
A business relationship is formed when a self-employed individual enters into a verbal or written agreement to complete
|
||||||
|
specific work for a payer in exchange for compensation. This arrangement does not establish an employer-employee relationship;
|
||||||
|
instead, it represents a contract for services.
|
||||||
|
|
||||||
|
Under this type of agreement, the self-employed individual is responsible for delivering a final result within an agreed
|
||||||
|
timeframe, using methods of their own choosing. They are not subject to the direction or supervision of the payer while
|
||||||
|
completing the work, and they retain autonomy over how tasks are executed. In most cases, the payer does not participate in
|
||||||
|
or influence the work process, meaning control over the work lies entirely with the self-employed individual. This structure
|
||||||
|
reflects a high level of independence and flexibility, distinguishing it clearly from traditional employment relationships.
|
||||||
|
|
||||||
|
Under a contract for service, a self-employed individual accepts both the potential for profit and the risk of financial loss.
|
||||||
|
Prior to engagement, the individual agrees on the total cost of the work, uses personal tools and equipment, and assumes full
|
||||||
|
responsibility for how the work is performed. This means the individual bears any unforeseen costs or challenges that arise
|
||||||
|
during the project. Conversely, if the work is completed more efficiently than expected, the financial gain—through retained
|
||||||
|
profits—is greater.
|
||||||
|
|
||||||
|
Organizations often utilize contracts for service when they require tasks or projects that fall outside their normal business
|
||||||
|
operations. While the relationship between a payer and a self-employed contractor may resemble that of an employer and
|
||||||
|
employee, there is a key distinction. In a contract for service, the payer specifies the desired outcome or deliverable, but
|
||||||
|
not how the work should be completed. In contrast, a contract of service allows the employer to direct both the tasks and the
|
||||||
|
method by which they are carried out, establishing a more controlled, employee-based relationship.
|
||||||
|
|
||||||
|
Under a contract for service, the payer exercises general oversight to ensure that the agreed work is completed as specified.
|
||||||
|
However, this oversight does not extend to controlling how the work is performed. The self-employed individual retains
|
||||||
|
autonomy over the methods used to complete the tasks. Receiving general instructions from a project manager or similar
|
||||||
|
representative does not establish an employer-employee relationship.
|
||||||
|
|
||||||
|
An employee-employer relationship is recognized when an organization has the authority to direct and control both the work and
|
||||||
|
the manner in which it is performed. If there is uncertainty about whether such a relationship exists, the Canada Revenue
|
||||||
|
Agency (CRA) recommends submitting Form CPT1 — Request for a CPP/EI Ruling: Employee or Self-Employed? — to obtain
|
||||||
|
clarification. A sample of this form can be found at the end of this section.
|
||||||
|
|
||||||
|
Independent contractors or self-employed individuals are not classified as employees if no employer-employee relationship is
|
||||||
|
present. They typically submit invoices and receive payment through accounts payable. However, the act of submitting an
|
||||||
|
invoice alone is not sufficient to confirm self-employment status. Proper assessment of the working relationship is essential
|
||||||
|
sto ensure accurate classification and compliance with tax and labor regulations.
|
||||||
|
|
||||||
|
Factors Determining the Type of Contract
|
||||||
|
-----------------------------------------
|
||||||
|
|
||||||
|
The CRA uses a two-step approach to examine the relationship between the worker and the
|
||||||
|
payer for relationships outside the province of Québec. The approach used for relationships
|
||||||
|
in the province of Québec will be discussed in a later chapter.
|
||||||
|
|
||||||
|
**Step 1:**
|
||||||
|
The first step is to establish what the intent was when the worker and the payer entered into
|
||||||
|
the working arrangement. Did they intend to enter into an employee-employer relationship
|
||||||
|
(contract of service) or did they intend to enter into a business relationship (contract for
|
||||||
|
service). The CRA must determine not only how the working relationship has been defined
|
||||||
|
but why it was defined that way.
|
||||||
|
|
||||||
|
**Step 2:**
|
||||||
|
The CRA then considers certain factors when determining if a contract of service or a
|
||||||
|
contract for service exists. In order to understand the working relationship and verify that the
|
||||||
|
intent of the worker and the payer is reflected in the facts, they will ask a series of questions
|
||||||
|
that relate to the following factors:
|
||||||
|
|
||||||
|
- the level of control the payer has over the worker
|
||||||
|
|
||||||
|
- whether or not the worker provides the tools and equipment
|
||||||
|
|
||||||
|
- whether the worker can subcontract the work or hire assistants
|
||||||
|
|
||||||
|
- the degree of financial risk taken by the worker
|
||||||
|
|
||||||
|
- the degree of responsibility for investment and management held by the worker
|
||||||
|
|
||||||
|
- the worker's opportunity for profit
|
||||||
|
|
||||||
|
- any other relevant factors, such as written contracts
|
||||||
|
|
||||||
|
The CRA will look at the answers independently and then together and consider whether or
|
||||||
|
not they reflect the intent that was originally stated. Considered individually, the response to
|
||||||
|
each of these questions is not conclusive; however, when weighed together, certain
|
||||||
|
conclusions may be drawn. When there is no common intent, the CRA will decide if the
|
||||||
|
answers are more consistent with a contract of service or a contract for service.
|
||||||
|
Each of these factors will be discussed in the material and indicators showing whether the
|
||||||
|
worker is an employee or self-employed will be provided.
|
||||||
|
|
||||||
|
Control
|
||||||
|
~~~~~~~
|
||||||
|
|
||||||
|
One of the key factors in determining a worker's status is the extent to which the payer has the ability, authority, or
|
||||||
|
right to control both what work is performed and how it is carried out. Equally important is the level of independence the
|
||||||
|
worker maintains in performing their duties.
|
||||||
|
|
||||||
|
In evaluating the relationship, both the payer's oversight of the worker's day-to-day activities and their overall
|
||||||
|
influence are assessed. However, it is the payer's right to exercise control—rather than whether that control is actively
|
||||||
|
used—that holds the most weight in determining the nature of the working relationship.
|
||||||
|
|
||||||
|
Worker is an *Employee* when:
|
||||||
|
|
||||||
|
- The relationship is one of subordination.
|
||||||
|
- The payer will often direct, scrutinize, and effectively control many elements of how the work is performed.
|
||||||
|
- The payer controls both the results of the work and the method used to do the work.
|
||||||
|
- The payer determines what jobs the worker will do.
|
||||||
|
- The worker receives training or direction from the payer on how to do the work.
|
||||||
|
|
||||||
|
Worker is a *Self-Employed* when:
|
||||||
|
|
||||||
|
- Individual usually works independently, does not have anyone overseeing them.
|
||||||
|
- The worker is usually free to work when and for whom they choose and may provide their services to different payers at the same time.
|
||||||
|
- The worker can accept or refuse work from the payer.
|
||||||
|
- The working relationship between the payer and the worker does not present a degree of continuity, loyalty, security, subordination, or integration.
|
||||||
|
|
||||||
|
Tools and Equipment
|
||||||
|
~~~~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
Ownership of tools and equipment is not a definitive factor in determining the nature of a working relationship or the type
|
||||||
|
of contract in place. While self-employed individuals often use their own tools to fulfill contractual obligations—making
|
||||||
|
such ownership common in business relationships—this alone does not confirm self-employment. Employees may also be required
|
||||||
|
to supply their own tools, depending on the trade or occupation.
|
||||||
|
|
||||||
|
In typical employee-employer relationships, the employer provides the necessary equipment and assumes the costs associated
|
||||||
|
with its use, including maintenance, insurance, transportation, rental fees, and operational expenses such as fuel. However,
|
||||||
|
in certain industries—such as automotive repair, painting, carpentry, and technical fields like software development or
|
||||||
|
surveying—it is standard practice for employees to use their own tools or specialized instruments.
|
||||||
|
|
||||||
|
In contrast, self-employed individuals not only supply their own equipment but also bear the associated costs. Significant
|
||||||
|
financial investment in tools—especially those that require ongoing maintenance or replacement—can suggest a business
|
||||||
|
relationship, as these individuals assume both the potential for profit and the risk of loss.
|
||||||
|
|
||||||
|
Ultimately, the key consideration is the scale of the investment and the financial responsibility related to repairs,
|
||||||
|
replacement, and insurance, rather than mere ownership itself.
|
||||||
|
|
||||||
|
The worker is an employee when:
|
||||||
|
|
||||||
|
- The payer supplies most of the tools and equipment.
|
||||||
|
- The payer retains the right of use over the tools and equipment provided to the worker.
|
||||||
|
- The worker supplies the tools and equipment and the payer reimburses the worker for their use
|
||||||
|
|
||||||
|
The worker is a self-employed individual when:
|
||||||
|
|
||||||
|
- The worker provides the tools and equipment required and is responsible for the cost of repairs, insurance and maintenance and retains the right over the use of these assets.
|
||||||
|
- The worker supplies his or her own workspace, is responsible for the costs to maintain it, and does substantial work from that site.
|
||||||
|
|
||||||
|
Subcontracting Work or Hiring Assistants
|
||||||
|
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
As subcontracting work or hiring assistants can affect a worker's chance of profit or risk of loss, this can help determine
|
||||||
|
the type of business relationship.
|
||||||
|
|
||||||
|
The worker is an employee when:
|
||||||
|
|
||||||
|
- The worker cannot hire helpers or assistants.
|
||||||
|
- The worker must perform the services personally.
|
||||||
|
|
||||||
|
The worker is a self-employed individual when:
|
||||||
|
|
||||||
|
- The worker does not have to perform the service personally.
|
||||||
|
- They can hire another party to complete the work, without consulting with the payer.
|
||||||
|
|
||||||
|
Financial Risk
|
||||||
|
~~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
When evaluating the nature of a working relationship, the Canada Revenue Agency (CRA) considers whether the individual
|
||||||
|
incurs fixed, ongoing costs or unreimbursed expenses. In traditional employee arrangements, employers typically reimburse
|
||||||
|
expenses that arise as part of the job—for example, travel or business-related costs.
|
||||||
|
|
||||||
|
In contrast, self-employed individuals often assume greater financial risk by covering recurring operational costs
|
||||||
|
regardless of whether active work is being performed. These may include equipment leasing, office space rental, or other
|
||||||
|
business overheads. While both employees and contractors may receive reimbursement for certain expenses, the CRA places
|
||||||
|
particular emphasis on identifying costs that are not reimbursed. The presence of such expenses may indicate a business
|
||||||
|
relationship, reflecting the independence and financial responsibility characteristic of self-employment.
|
||||||
|
|
||||||
|
The worker is an employee when:
|
||||||
|
|
||||||
|
- The worker is not usually responsible for any operating expenses.
|
||||||
|
- The worker is not financially liable if he or she does not fulfill the obligations of the contract.
|
||||||
|
- The payer determines and controls the method and amount of pay.
|
||||||
|
|
||||||
|
The worker is a self-employed individual when:
|
||||||
|
|
||||||
|
- The worker is financially liable if he or she does not fulfill the obligations of the contract.
|
||||||
|
- The worker does not receive any protection or benefits from the payer.
|
||||||
|
- The worker hires helpers to assist and pays them.
|
||||||
|
- The worker advertises the services offered.
|
||||||
|
|
||||||
|
Responsibility for Investment and Management
|
||||||
|
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
When assessing whether a business relationship exists, one important indicator is the worker's financial investment in the
|
||||||
|
services they provide. If an individual is required to invest in equipment, materials, or other resources to complete the
|
||||||
|
work, this suggests the presence of a contract for service rather than an employment relationship.
|
||||||
|
|
||||||
|
Another key factor is decision-making authority related to financial outcomes. When the worker independently makes business
|
||||||
|
decisions that influence their profit or loss—such as pricing, project selection, or service delivery methods—it further
|
||||||
|
supports the classification of a self-employed individual operating under a business arrangement. These characteristics
|
||||||
|
reflect the autonomy and financial risk typically associated with self-employment.
|
||||||
|
|
||||||
|
The worker is an employee when:
|
||||||
|
|
||||||
|
- The worker has no capital investment in the business.
|
||||||
|
- The worker does not have a business presence.
|
||||||
|
|
||||||
|
The worker is a self-employed individual when:
|
||||||
|
|
||||||
|
- The worker has capital investment, manages his or her staff, hires and pays individuals to help perform the work, and has established a business presence.
|
||||||
|
|
||||||
|
Opportunity for Profit
|
||||||
|
~~~~~~~~~~~~~~~~~~~~~~~~~
|
||||||
|
|
||||||
|
A business relationship is often indicated when a worker has the ability to realize a profit or incur a loss, reflecting their
|
||||||
|
control over the financial and operational aspects of the services they provide. Self-employed individuals typically
|
||||||
|
negotiate their own rates, choose which contracts to accept, and may take on multiple contracts simultaneously. To fulfill
|
||||||
|
contractual obligations, they often incur and manage expenses, which directly influence their potential for profit.
|
||||||
|
|
||||||
|
In contrast, employees generally do not bear financial risk or benefit from profit. While commission-based employees may
|
||||||
|
increase their earnings through performance, this does not represent profit in the traditional sense, as it does not reflect
|
||||||
|
income earned beyond expenses. Moreover, employees do not typically share in a business's profits or losses.
|
||||||
|
|
||||||
|
When assessing worker classification, the Canada Revenue Agency (CRA) considers the extent to which the individual controls
|
||||||
|
their revenue and expenses. Another key factor is the method of payment: employees are usually compensated at a fixed rate
|
||||||
|
based on a consistent pay schedule (e.g., hourly, weekly, or annually). Self-employed individuals, however, are often paid a
|
||||||
|
flat rate for a specific job, especially when they absorb related costs—an arrangement that commonly signals a business
|
||||||
|
relationship.
|
||||||
|
|
||||||
|
The worker is an employee when:
|
||||||
|
|
||||||
|
- The worker is not in a position to realize a business profit or loss.
|
||||||
|
- The worker is entitled to benefit plans that are normally only offered to employees.
|
||||||
|
|
||||||
|
The worker is a self-employed individual when:
|
||||||
|
|
||||||
|
- The worker is compensated by a flat fee.
|
||||||
|
- The worker can hire and pay a substitute.
|
||||||
|
|
||||||
|
The worker is an employee when:
|
||||||
|
|
||||||
|
The worker is a self-employed individual when:
|
||||||
|
|
||||||
|
Review Summary
|
||||||
|
--------------
|
||||||
|
|
||||||
|
Employment relationships are defined through contractual arrangements. A contract of service refers to a traditional
|
||||||
|
employer-employee relationship, where an individual commits to working for an employer—either on a full-time or part-time
|
||||||
|
basis—for a specified or ongoing period. The employer has authority over both the duties and how they are executed.
|
||||||
|
|
||||||
|
Conversely, a contract for service reflects a business arrangement where an independent contractor agrees to perform specific
|
||||||
|
tasks, with discretion over how the work is completed. This signifies a client-provider relationship rather than an employment
|
||||||
|
one.
|
||||||
|
|
||||||
|
To assess worker classification—particularly outside Québec—the Canada Revenue Agency (CRA) employs a two-step evaluation. Key
|
||||||
|
considerations include:
|
||||||
|
|
||||||
|
Control: Whether the payer holds the right to determine what work is done and how it is executed.
|
||||||
|
|
||||||
|
Independence: The degree of autonomy exercised by the worker.
|
||||||
|
|
||||||
|
Ownership of Tools: Significant investment in tools and equipment, along with maintenance and insurance responsibilities, may indicate a business relationship.
|
||||||
|
|
||||||
|
Financial Risk: Ongoing operational costs or unreimbursed expenses reflect a higher likelihood of self-employment.
|
||||||
|
|
||||||
|
Revenue Control: The ability to manage pricing, accept multiple contracts, and influence earnings supports classification under a contract for service.
|
||||||
|
|
||||||
|
Collectively, these factors guide proper categorization for legal and tax purposes, helping organizations ensure compliance and mitigate potential risk.
|
||||||
|
|
||||||
|
Review Questions
|
||||||
|
----------------
|
||||||
|
|
||||||
|
What is the primary objective of the payroll department?
|
||||||
|
|
||||||
|
The primary objective of the payroll department is to pay employees accurately and
|
||||||
|
on time, in compliance with the legislative requirements for a full annual payroll
|
||||||
|
cycle.
|
||||||
|
|
||||||
|
List four definitions of payroll.
|
||||||
|
|
||||||
|
- the department that administers the payroll
|
||||||
|
- the total number of people employed by an organization
|
||||||
|
- the wages and salaries paid out in a year
|
||||||
|
- a list of employees to be paid and the amount due to each
|
||||||
|
|
||||||
|
List the three types of payroll management stakeholders and provide an example of each.
|
||||||
|
|
||||||
|
Payroll management stakeholders are government (federal and provincial/territorial), internal
|
||||||
|
(employees, employers and other departments) and external (benefit carriers, courts, unions, pension
|
||||||
|
providers, charities, third party administrators and outsource/software vendors).
|
||||||
|
|
||||||
|
Explain the difference between legislation and regulation.
|
||||||
|
|
||||||
|
Legislation determines what the rules are, while regulations determine how the rules are to be applied.
|
||||||
|
|
||||||
|
What are two examples of sources of information that you use (or could use) to keep upto-date on payroll compliance changes?
|
||||||
|
|
||||||
|
The Canadian Payroll Association offers Payroll InfoLine, a phone-in and e-mail information service for members
|
||||||
|
|
||||||
|
- The Canada Revenue Agency (CRA) produces guides, publications and Income Tax Bulletins, folios and Circulars, posts news bulletins and enables
|
||||||
|
participation on an electronic mailing list with e-mail alerts for new content to the site
|
||||||
|
- The Revenu Québec (RQ) website provides guides, publications, bulletins, forms, online services and enables participation on an electronic mailing list with e-mail notifications of tax news articles
|
||||||
|
- Employment/labour standards (federal, provincial and territorial) publications and websites
|
||||||
|
- Employment and Social Development Canada (ESDC) and Service Canada (SC) publications including information regarding the Employment Insurance (EI) program and the Social Insurance Number
|
||||||
|
- CCH Canada Limited publishes a series of volumes on employment and labour law, pensions and benefits, etc., that supplies information on legislation with regular updates as changes become law
|
||||||
|
- Carswell publishes The Canadian Payroll Manual and offers a phone-in service to subscribers
|
||||||
|
|
||||||
|
Copies of legislation are available from the printing offices of the federal, provincial and territorial governments as well as through government websites.
|
||||||
|
|
||||||
|
List three external stakeholders and explain their compliance requirements.
|
||||||
|
|
||||||
|
Benefit Carriers - 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 - Payroll must accurately deduct and remit amounts ordered to be withheld through garnishments, third party demands, requirements to pay and support deduction orders.
|
||||||
|
Unions - Payroll must accurately deduct and remit union dues and initiation fees, and ensure that the terms of the collective agreement are adhered to.
|
||||||
|
Pension Providers - Third party pension plan providers may require payroll to provide enrolment reports on participating employees and length of service calculations, and to remit employee deductions and employer contributions.
|
||||||
|
|
||||||
|
Indicate the jurisdiction the following employees fall under:
|
||||||
|
|
||||||
|
- Canada Post Corporation (F)
|
||||||
|
- An insurance company (P)
|
||||||
|
- A uranium mining company (F)
|
||||||
|
- Canadian Broadcasting Corporation (F)
|
||||||
|
- A retail department store with locations in every province (P)
|
||||||
|
- A chartered bank (F)
|
||||||
|
|
||||||
|
What is the difference between a contract of service and a contract for service?
|
||||||
|
|
||||||
|
A contract of service is an arrangement whereby an individual (the employee) agrees to work on a full-time or part-time basis for an employer for a specified or indeterminate period of time.
|
||||||
|
|
||||||
|
A contract for service is a business relationship whereby one party agrees to perform certain specific work stipulated in the contract for another party.
|
||||||
|
|
||||||
|
What are the factors that the Canada Revenue Agency (CRA) considers when
|
||||||
|
determining if a contract of service or a contract for service exists?
|
||||||
|
|
||||||
|
Please consider the following scenario.
|
||||||
|
|
||||||
|
You are a payroll professional working for a large manufacturing company. Your
|
||||||
|
organization has had many change initiatives over the last number of years including
|
||||||
|
three mergers and two large group terminations. Your company endorses the use of
|
||||||
|
consultants rather than growing the number of permanent employees.
|
||||||
|
|
||||||
|
Write a memo to your supervisor, who is the Chief Financial Officer of the company, to
|
||||||
|
explain why your role must coordinate with the Accounts Payable Department to ensure
|
||||||
|
that these payments are being handled correctly. Please prepare your answer in a separate
|
||||||
|
document.
|
||||||
|
|
||||||
|
*At the last weekly Finance meeting, Tom and I discussed the increase in the number of contractor invoices being
|
||||||
|
processed through accounts payable (AP). We have some concerns as to whether these individuals would be considered truly
|
||||||
|
selfemployed by the Canada Revenue Agency (CRA), or whether the CRA would determine them to be employees.*
|
||||||
|
|
||||||
|
*If the worker is considered self-employed, then payment, on submission of an invoice, will continue to be handled by AP. If, however, the worker is considered an
|
||||||
|
employee, they would have to be set up on payroll, as they would be in receipt of income from employment, subject to all legislated statutory withholdings.*
|
||||||
|
|
||||||
|
*I have attached the CRA's form Request for a CPP/EI Ruling - Employee or SelfEmployed? - CPT1 for your information. This form can be completed by the
|
||||||
|
company and sent with supporting documentation, such as the terms and conditions of the contract, for a ruling from the CRA on the individual's status.*
|
||||||
|
|
||||||
|
*I think that Payroll must coordinate with the Accounts Payable Department to ensure that these payments are being handled correctly.*
|
||||||
|
|
||||||
|
*Tom and I would be pleased to meet with you to ensure the company is in
|
||||||
|
compliance with all legislative requirements. Would you be available next Friday
|
||||||
|
morning at 10:00 to discuss?*
|
||||||
42
docs/build/html/compensation.html
vendored
42
docs/build/html/compensation.html
vendored
@@ -5,7 +5,7 @@
|
|||||||
<meta charset="utf-8" />
|
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|
||||||
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|
<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 — 🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</title>
|
<title>5. CALCULATING NET EARNINGS — 🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</title>
|
||||||
<link rel="stylesheet" type="text/css" href="_static/pygments.css?v=03e43079" />
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<link rel="stylesheet" type="text/css" href="_static/pygments.css?v=03e43079" />
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<link rel="stylesheet" type="text/css" href="_static/classic.css?v=2bf1fcf8" />
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|
||||||
|
|
||||||
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|
|||||||
|
|
||||||
<link rel="index" title="Index" href="genindex.html" />
|
<link rel="index" title="Index" href="genindex.html" />
|
||||||
<link rel="search" title="Search" href="search.html" />
|
<link rel="search" title="Search" href="search.html" />
|
||||||
<link rel="next" title="8. OBNOARDING EMPLOYEE" href="onboarding_employee.html" />
|
<link rel="next" title="6. OBNOARDING EMPLOYEE" href="onboarding_employee.html" />
|
||||||
<link rel="prev" title="4. Canada Pension Plan" href="cpp-and-ei.html" />
|
<link rel="prev" title="2. Canada Pension Plan" href="cpp-and-ei.html" />
|
||||||
</head><body>
|
</head><body>
|
||||||
<div class="related" role="navigation" aria-label="Related">
|
<div class="related" role="navigation" aria-label="Related">
|
||||||
<h3>Navigation</h3>
|
<h3>Navigation</h3>
|
||||||
@@ -25,13 +25,13 @@
|
|||||||
<a href="genindex.html" title="General Index"
|
<a href="genindex.html" title="General Index"
|
||||||
accesskey="I">index</a></li>
|
accesskey="I">index</a></li>
|
||||||
<li class="right" >
|
<li class="right" >
|
||||||
<a href="onboarding_employee.html" title="8. OBNOARDING EMPLOYEE"
|
<a href="onboarding_employee.html" title="6. OBNOARDING EMPLOYEE"
|
||||||
accesskey="N">next</a> |</li>
|
accesskey="N">next</a> |</li>
|
||||||
<li class="right" >
|
<li class="right" >
|
||||||
<a href="cpp-and-ei.html" title="4. Canada Pension Plan"
|
<a href="cpp-and-ei.html" title="2. Canada Pension Plan"
|
||||||
accesskey="P">previous</a> |</li>
|
accesskey="P">previous</a> |</li>
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<li class="nav-item nav-item-0"><a href="index.html">🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</a> »</li>
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<li class="nav-item nav-item-0"><a href="index.html">🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</a> »</li>
|
||||||
<li class="nav-item nav-item-this"><a href=""><span class="section-number">7. </span>CALCULATING NET EARNINGS</a></li>
|
<li class="nav-item nav-item-this"><a href=""><span class="section-number">5. </span>CALCULATING NET EARNINGS</a></li>
|
||||||
</ul>
|
</ul>
|
||||||
</div>
|
</div>
|
||||||
|
|
||||||
@@ -41,18 +41,18 @@
|
|||||||
<div class="body" role="main">
|
<div class="body" role="main">
|
||||||
|
|
||||||
<section id="calculating-net-earnings">
|
<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">5. </span>CALCULATING NET EARNINGS<a class="headerlink" href="#calculating-net-earnings" title="Link to this heading">¶</a></h1>
|
||||||
<section id="employment-income">
|
<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">5.1. </span>Employment Income<a class="headerlink" href="#employment-income" title="Link to this heading">¶</a></h2>
|
||||||
</section>
|
</section>
|
||||||
<section id="allowances">
|
<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">5.2. </span>Allowances<a class="headerlink" href="#allowances" title="Link to this heading">¶</a></h2>
|
||||||
</section>
|
</section>
|
||||||
<section id="expenses">
|
<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">5.3. </span>Expenses<a class="headerlink" href="#expenses" title="Link to this heading">¶</a></h2>
|
||||||
</section>
|
</section>
|
||||||
<section id="benefits">
|
<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">5.4. </span>Benefits<a class="headerlink" href="#benefits" title="Link to this heading">¶</a></h2>
|
||||||
</section>
|
</section>
|
||||||
</section>
|
</section>
|
||||||
|
|
||||||
@@ -66,11 +66,11 @@
|
|||||||
<div>
|
<div>
|
||||||
<h3><a href="index.html">Table of Contents</a></h3>
|
<h3><a href="index.html">Table of Contents</a></h3>
|
||||||
<ul>
|
<ul>
|
||||||
<li><a class="reference internal" href="#">7. CALCULATING NET EARNINGS</a><ul>
|
<li><a class="reference internal" href="#">5. 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="#employment-income">5.1. Employment Income</a></li>
|
||||||
<li><a class="reference internal" href="#allowances">7.2. Allowances</a></li>
|
<li><a class="reference internal" href="#allowances">5.2. Allowances</a></li>
|
||||||
<li><a class="reference internal" href="#expenses">7.3. Expenses</a></li>
|
<li><a class="reference internal" href="#expenses">5.3. Expenses</a></li>
|
||||||
<li><a class="reference internal" href="#benefits">7.4. Benefits</a></li>
|
<li><a class="reference internal" href="#benefits">5.4. Benefits</a></li>
|
||||||
</ul>
|
</ul>
|
||||||
</li>
|
</li>
|
||||||
</ul>
|
</ul>
|
||||||
@@ -79,12 +79,12 @@
|
|||||||
<div>
|
<div>
|
||||||
<h4>Previous topic</h4>
|
<h4>Previous topic</h4>
|
||||||
<p class="topless"><a href="cpp-and-ei.html"
|
<p class="topless"><a href="cpp-and-ei.html"
|
||||||
title="previous chapter"><span class="section-number">4. </span>Canada Pension Plan</a></p>
|
title="previous chapter"><span class="section-number">2. </span>Canada Pension Plan</a></p>
|
||||||
</div>
|
</div>
|
||||||
<div>
|
<div>
|
||||||
<h4>Next topic</h4>
|
<h4>Next topic</h4>
|
||||||
<p class="topless"><a href="onboarding_employee.html"
|
<p class="topless"><a href="onboarding_employee.html"
|
||||||
title="next chapter"><span class="section-number">8. </span>OBNOARDING EMPLOYEE</a></p>
|
title="next chapter"><span class="section-number">6. </span>OBNOARDING EMPLOYEE</a></p>
|
||||||
</div>
|
</div>
|
||||||
<div role="note" aria-label="source link">
|
<div role="note" aria-label="source link">
|
||||||
<h3>This Page</h3>
|
<h3>This Page</h3>
|
||||||
@@ -114,13 +114,13 @@
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<li class="nav-item nav-item-this"><a href=""><span class="section-number">3. </span>PAYROLL COMPLIANCE AND REGULATIONS</a></li>
|
<li class="nav-item nav-item-this"><a href=""><span class="section-number">1. </span>PAYROLL COMPLIANCE AND REGULATIONS</a></li>
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<div class="body" role="main">
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<section id="payroll-compliance-and-regulations">
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<section id="payroll-compliance-and-regulations">
|
||||||
<h1><span class="section-number">3. </span>PAYROLL COMPLIANCE AND REGULATIONS<a class="headerlink" href="#payroll-compliance-and-regulations" title="Link to this heading">¶</a></h1>
|
<h1><span class="section-number">1. </span>PAYROLL COMPLIANCE AND REGULATIONS<a class="headerlink" href="#payroll-compliance-and-regulations" title="Link to this heading">¶</a></h1>
|
||||||
<p><strong>LEARNING OBJECTIVES</strong></p>
|
<p><strong>LEARNING OBJECTIVES</strong></p>
|
||||||
<p>This chapter provides a comprehensive introduction to the fundamentals of payroll compliance and regulations in Canada.
|
<p>This chapter provides a comprehensive introduction to the fundamentals of payroll compliance and regulations in Canada.
|
||||||
It outlines the key stakeholders involved, the core objectives of payroll, and the legal frameworks that shape payroll
|
It outlines the key stakeholders involved, the core objectives of payroll, and the legal frameworks that shape payroll
|
||||||
@@ -61,7 +61,7 @@ accurate classification and compliance.</p>
|
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</ol>
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</ol>
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</div></blockquote>
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</div></blockquote>
|
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<section id="introduction">
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<section id="introduction">
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<h2><span class="section-number">3.1. </span>Introduction<a class="headerlink" href="#introduction" title="Link to this heading">¶</a></h2>
|
<h2><span class="section-number">1.1. </span>Introduction<a class="headerlink" href="#introduction" title="Link to this heading">¶</a></h2>
|
||||||
<p>Payroll is an essential operational function in any organization that employs staff, ensuring individuals are compensated
|
<p>Payroll is an essential operational function in any organization that employs staff, ensuring individuals are compensated
|
||||||
appropriately for their work. The payroll process is subject to a robust framework of legislation. Both federal and
|
appropriately for their work. The payroll process is subject to a robust framework of legislation. Both federal and
|
||||||
provincial/territorial governments enact regulations that oversee various elements of payroll administration,
|
provincial/territorial governments enact regulations that oversee various elements of payroll administration,
|
||||||
@@ -79,7 +79,7 @@ individual are handled in full compliance with applicable legislation. This dist
|
|||||||
administration and helps prevent legal or financial errors tied to misclassification.</p>
|
administration and helps prevent legal or financial errors tied to misclassification.</p>
|
||||||
</section>
|
</section>
|
||||||
<section id="payroll-objectives">
|
<section id="payroll-objectives">
|
||||||
<h2><span class="section-number">3.2. </span>Payroll Objectives<a class="headerlink" href="#payroll-objectives" title="Link to this heading">¶</a></h2>
|
<h2><span class="section-number">1.2. </span>Payroll Objectives<a class="headerlink" href="#payroll-objectives" title="Link to this heading">¶</a></h2>
|
||||||
<p>The payroll function plays a vital role in every organization, with its primary objective being to ensure employees are
|
<p>The payroll function plays a vital role in every organization, with its primary objective being to ensure employees are
|
||||||
compensated accurately and on time, in accordance with legislative requirements throughout the full annual payroll cycle.</p>
|
compensated accurately and on time, in accordance with legislative requirements throughout the full annual payroll cycle.</p>
|
||||||
<p>Employees expect to receive their pay as scheduled and in the method agreed upon with their employer, whether by cheque or
|
<p>Employees expect to receive their pay as scheduled and in the method agreed upon with their employer, whether by cheque or
|
||||||
@@ -117,7 +117,7 @@ contractual arrangements. Maintaining compliance across all stakeholder requirem
|
|||||||
effectiveness of the payroll function.</p>
|
effectiveness of the payroll function.</p>
|
||||||
</section>
|
</section>
|
||||||
<section id="responsibilities-and-functions-of-payroll">
|
<section id="responsibilities-and-functions-of-payroll">
|
||||||
<h2><span class="section-number">3.3. </span>Responsibilities and Functions of Payroll<a class="headerlink" href="#responsibilities-and-functions-of-payroll" title="Link to this heading">¶</a></h2>
|
<h2><span class="section-number">1.3. </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 a payroll practitioner can vary significantly based on the size and structure of the organization,
|
<p>The responsibilities of a payroll practitioner can vary significantly based on the size and structure of the organization,
|
||||||
the jurisdictions in which employees are paid, and the presence of other supporting departments such as human resources,
|
the jurisdictions in which employees are paid, and the presence of other supporting departments such as human resources,
|
||||||
finance, and administration. These factors influence both the scope and complexity of payroll duties within the organization.</p>
|
finance, and administration. These factors influence both the scope and complexity of payroll duties within the organization.</p>
|
||||||
@@ -194,7 +194,7 @@ approach when responding to questions and inquiries ensures fair and consistent
|
|||||||
</div></blockquote>
|
</div></blockquote>
|
||||||
</section>
|
</section>
|
||||||
<section id="payroll-stakeholders">
|
<section id="payroll-stakeholders">
|
||||||
<h2><span class="section-number">3.4. </span>Payroll Stakeholders<a class="headerlink" href="#payroll-stakeholders" title="Link to this heading">¶</a></h2>
|
<h2><span class="section-number">1.4. </span>Payroll Stakeholders<a class="headerlink" href="#payroll-stakeholders" title="Link to this heading">¶</a></h2>
|
||||||
<p>Stakeholders refer to the individuals, groups, and organizations—both within and outside the company—that have a vested
|
<p>Stakeholders refer to the individuals, groups, and organizations—both within and outside the company—that have a vested
|
||||||
interest in the operations and outcomes of the payroll department. These stakeholders can be viewed as internal customers,
|
interest in the operations and outcomes of the payroll department. These stakeholders can be viewed as internal customers,
|
||||||
and payroll practitioners are encouraged to adopt a proactive, service-oriented approach in meeting their needs and
|
and payroll practitioners are encouraged to adopt a proactive, service-oriented approach in meeting their needs and
|
||||||
@@ -205,7 +205,7 @@ employers and other departments within the organization. External stakeholders i
|
|||||||
benefit carriers, courts, unions, pension providers, charities, third party administrators and
|
benefit carriers, courts, unions, pension providers, charities, third party administrators and
|
||||||
outsource/software vendors.</p>
|
outsource/software vendors.</p>
|
||||||
<section id="government-stakeholders">
|
<section id="government-stakeholders">
|
||||||
<h3><span class="section-number">3.4.1. </span>Government Stakeholders<a class="headerlink" href="#government-stakeholders" title="Link to this heading">¶</a></h3>
|
<h3><span class="section-number">1.4.1. </span>Government Stakeholders<a class="headerlink" href="#government-stakeholders" title="Link to this heading">¶</a></h3>
|
||||||
<p>Government legislation establishes the rules and regulations that govern payroll practices, particularly in relation to
|
<p>Government legislation establishes the rules and regulations that govern payroll practices, particularly in relation to
|
||||||
employee compensation. It is therefore essential for payroll practitioners to understand both the scope and the origin of all
|
employee compensation. It is therefore essential for payroll practitioners to understand both the scope and the origin of all
|
||||||
payroll-related laws.</p>
|
payroll-related laws.</p>
|
||||||
@@ -244,7 +244,7 @@ provincial/territorial requirements. Québec collects its provincial income tax
|
|||||||
</div></blockquote>
|
</div></blockquote>
|
||||||
</section>
|
</section>
|
||||||
<section id="federal-government">
|
<section id="federal-government">
|
||||||
<h3><span class="section-number">3.4.2. </span>Federal Government<a class="headerlink" href="#federal-government" title="Link to this heading">¶</a></h3>
|
<h3><span class="section-number">1.4.2. </span>Federal Government<a class="headerlink" href="#federal-government" title="Link to this heading">¶</a></h3>
|
||||||
<p>The Constitution Act of 1867 outlined the division of legislative power and authority between
|
<p>The Constitution Act of 1867 outlined the division of legislative power and authority between
|
||||||
federal and provincial/territorial jurisdictional governments. The exclusive legislative
|
federal and provincial/territorial jurisdictional governments. The exclusive legislative
|
||||||
authority of the Parliament of Canada extends to all matters regarding:</p>
|
authority of the Parliament of Canada extends to all matters regarding:</p>
|
||||||
@@ -274,7 +274,7 @@ employees under federal jurisdiction in the following industries and organizatio
|
|||||||
</div></blockquote>
|
</div></blockquote>
|
||||||
</section>
|
</section>
|
||||||
<section id="provincial-territorial-governments">
|
<section id="provincial-territorial-governments">
|
||||||
<h3><span class="section-number">3.4.3. </span>Provincial/Territorial Governments<a class="headerlink" href="#provincial-territorial-governments" title="Link to this heading">¶</a></h3>
|
<h3><span class="section-number">1.4.3. </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
|
<p>Under the Constitution Act of 1867, the exclusive legislative authority of the provinces and
|
||||||
territories exists over:</p>
|
territories exists over:</p>
|
||||||
<blockquote>
|
<blockquote>
|
||||||
@@ -309,7 +309,7 @@ Organizations may have some employees who fall under federal jurisdiction and an
|
|||||||
group of employees who fall under provincial/territorial legislation.</p>
|
group of employees who fall under provincial/territorial legislation.</p>
|
||||||
</section>
|
</section>
|
||||||
<section id="internal-stakeholders">
|
<section id="internal-stakeholders">
|
||||||
<h3><span class="section-number">3.4.4. </span>Internal Stakeholders<a class="headerlink" href="#internal-stakeholders" title="Link to this heading">¶</a></h3>
|
<h3><span class="section-number">1.4.4. </span>Internal Stakeholders<a class="headerlink" href="#internal-stakeholders" title="Link to this heading">¶</a></h3>
|
||||||
<p>Internal stakeholders are the people and departments within the organization that rely on the payroll function to operate
|
<p>Internal stakeholders are the people and departments within the organization that rely on the payroll function to operate
|
||||||
effectively. They form the core audience served by payroll and include employees who depend on accurate and timely
|
effectively. They form the core audience served by payroll and include employees who depend on accurate and timely
|
||||||
compensation, employers who oversee workforce management, and other internal teams—such as human resources, finance,
|
compensation, employers who oversee workforce management, and other internal teams—such as human resources, finance,
|
||||||
@@ -331,7 +331,7 @@ needed for their various requirements.</p>
|
|||||||
information for budgeting, analytical and quality purposes.</p>
|
information for budgeting, analytical and quality purposes.</p>
|
||||||
</section>
|
</section>
|
||||||
<section id="external-stakeholders">
|
<section id="external-stakeholders">
|
||||||
<h3><span class="section-number">3.4.5. </span>External Stakeholders<a class="headerlink" href="#external-stakeholders" title="Link to this heading">¶</a></h3>
|
<h3><span class="section-number">1.4.5. </span>External Stakeholders<a class="headerlink" href="#external-stakeholders" title="Link to this heading">¶</a></h3>
|
||||||
<p>External stakeholders are entities outside of both the organization and government that maintain a collaborative or
|
<p>External stakeholders are entities outside of both the organization and government that maintain a collaborative or
|
||||||
service-based relationship with the payroll function. These may include benefit providers, insurance carriers, pension
|
service-based relationship with the payroll function. These may include benefit providers, insurance carriers, pension
|
||||||
plan administrators, unions, and third-party service vendors. Although not formally part of the company or regulatory bodies,
|
plan administrators, unions, and third-party service vendors. Although not formally part of the company or regulatory bodies,
|
||||||
@@ -369,7 +369,7 @@ efficiently.</p>
|
|||||||
</section>
|
</section>
|
||||||
</section>
|
</section>
|
||||||
<section id="legislations-and-regulations">
|
<section id="legislations-and-regulations">
|
||||||
<h2><span class="section-number">3.5. </span>Legislations and Regulations<a class="headerlink" href="#legislations-and-regulations" title="Link to this heading">¶</a></h2>
|
<h2><span class="section-number">1.5. </span>Legislations and Regulations<a class="headerlink" href="#legislations-and-regulations" title="Link to this heading">¶</a></h2>
|
||||||
<p>Federal and provincial/territorial legislation, and amendments to existing legislation and
|
<p>Federal and provincial/territorial legislation, and amendments to existing legislation and
|
||||||
regulations, can affect the operations of a payroll department, as the requirement to comply
|
regulations, can affect the operations of a payroll department, as the requirement to comply
|
||||||
with the new or amended legislation must be satisfied.</p>
|
with the new or amended legislation must be satisfied.</p>
|
||||||
@@ -410,7 +410,7 @@ associations, and online portals—can support this ongoing effort to stay infor
|
|||||||
</ul>
|
</ul>
|
||||||
</div></blockquote>
|
</div></blockquote>
|
||||||
<section id="legislative-compliance">
|
<section id="legislative-compliance">
|
||||||
<h3><span class="section-number">3.5.1. </span>Legislative Compliance<a class="headerlink" href="#legislative-compliance" title="Link to this heading">¶</a></h3>
|
<h3><span class="section-number">1.5.1. </span>Legislative Compliance<a class="headerlink" href="#legislative-compliance" title="Link to this heading">¶</a></h3>
|
||||||
<p>Payroll plays a critical role not only in ensuring that employees are paid accurately and on time, but also in
|
<p>Payroll plays a critical role not only in ensuring that employees are paid accurately and on time, but also in
|
||||||
supporting and maintaining compliance with numerous government regulations. This includes legislative obligations related to
|
supporting and maintaining compliance with numerous government regulations. This includes legislative obligations related to
|
||||||
payroll source deductions, Canada Pension Plan contributions, Employment Insurance premiums, and both federal and
|
payroll source deductions, Canada Pension Plan contributions, Employment Insurance premiums, and both federal and
|
||||||
@@ -434,14 +434,14 @@ information slips issued at year-end to validate the amounts of CPP contribution
|
|||||||
</div></blockquote>
|
</div></blockquote>
|
||||||
</section>
|
</section>
|
||||||
<section id="self-assessment">
|
<section id="self-assessment">
|
||||||
<h3><span class="section-number">3.5.2. </span>Self-Assessment<a class="headerlink" href="#self-assessment" title="Link to this heading">¶</a></h3>
|
<h3><span class="section-number">1.5.2. </span>Self-Assessment<a class="headerlink" href="#self-assessment" title="Link to this heading">¶</a></h3>
|
||||||
<p>Both the federal and provincial/territorial tax systems in Canada operate on the principle of self-assessment. Under this system, taxpayers and their representatives—including employers—are responsible for accurately calculating, reporting, and remitting taxes and other required contributions by the prescribed deadlines.</p>
|
<p>Both the federal and provincial/territorial tax systems in Canada operate on the principle of self-assessment. Under this system, taxpayers and their representatives—including employers—are responsible for accurately calculating, reporting, and remitting taxes and other required contributions by the prescribed deadlines.</p>
|
||||||
<p>The Canada Revenue Agency (CRA) and Revenu Québec (RQ) serve as administrators of these systems, ensuring that individuals and organizations remain compliant and that all amounts owed are properly paid.</p>
|
<p>The Canada Revenue Agency (CRA) and Revenu Québec (RQ) serve as administrators of these systems, ensuring that individuals and organizations remain compliant and that all amounts owed are properly paid.</p>
|
||||||
<p>Importantly, both agencies acknowledge the right of taxpayers to organize their financial affairs in a way that minimizes their tax liability, provided it remains within legal boundaries. While tax planning is permitted, tax evasion—such as failing to report income, neglecting to remit amounts due, or submitting false information—is strictly prohibited and subject to enforcement actions.</p>
|
<p>Importantly, both agencies acknowledge the right of taxpayers to organize their financial affairs in a way that minimizes their tax liability, provided it remains within legal boundaries. While tax planning is permitted, tax evasion—such as failing to report income, neglecting to remit amounts due, or submitting false information—is strictly prohibited and subject to enforcement actions.</p>
|
||||||
</section>
|
</section>
|
||||||
</section>
|
</section>
|
||||||
<section id="the-employee-employer-relationship">
|
<section id="the-employee-employer-relationship">
|
||||||
<h2><span class="section-number">3.6. </span>The Employee-Employer Relationship<a class="headerlink" href="#the-employee-employer-relationship" title="Link to this heading">¶</a></h2>
|
<h2><span class="section-number">1.6. </span>The Employee-Employer Relationship<a class="headerlink" href="#the-employee-employer-relationship" title="Link to this heading">¶</a></h2>
|
||||||
<p>Determining the nature of the working relationship between an individual and an organization is essential in all employment situations. Whether the individual is classified as an employee or self-employed directly affects the statutory withholding requirements and the organization’s compliance with applicable legislation. To support this assessment, the Canada Revenue Agency (CRA) provides a set of guidelines designed to help distinguish between the two classifications. Importantly, the decision is not made by the worker but must be based on objective criteria and legal standards.</p>
|
<p>Determining the nature of the working relationship between an individual and an organization is essential in all employment situations. Whether the individual is classified as an employee or self-employed directly affects the statutory withholding requirements and the organization’s compliance with applicable legislation. To support this assessment, the Canada Revenue Agency (CRA) provides a set of guidelines designed to help distinguish between the two classifications. Importantly, the decision is not made by the worker but must be based on objective criteria and legal standards.</p>
|
||||||
<p>Payroll practitioners play an important role in promoting awareness of this distinction throughout the organization. By proactively communicating the significance of establishing a valid employee-employer relationship, payroll professionals help ensure that employment classifications are accurate and compliant.</p>
|
<p>Payroll practitioners play an important role in promoting awareness of this distinction throughout the organization. By proactively communicating the significance of establishing a valid employee-employer relationship, payroll professionals help ensure that employment classifications are accurate and compliant.</p>
|
||||||
<p>Once an employee-employer relationship is confirmed, the payroll department becomes responsible for meeting compliance obligations related to statutory withholdings. This includes deducting the appropriate amounts—such as income tax, Canada Pension Plan contributions, and Employment Insurance premiums—from employee pay and remitting them to the government within the required timelines. Proper classification and adherence to these rules are key to maintaining legal and financial accountability.</p>
|
<p>Once an employee-employer relationship is confirmed, the payroll department becomes responsible for meeting compliance obligations related to statutory withholdings. This includes deducting the appropriate amounts—such as income tax, Canada Pension Plan contributions, and Employment Insurance premiums—from employee pay and remitting them to the government within the required timelines. Proper classification and adherence to these rules are key to maintaining legal and financial accountability.</p>
|
||||||
@@ -459,7 +459,7 @@ information slips issued at year-end to validate the amounts of CPP contribution
|
|||||||
Canada Revenue Agency guide, Employee or Self-Employed? - RC4110. The guide is available on the CRA’s website,
|
Canada Revenue Agency guide, Employee or Self-Employed? - RC4110. The guide is available on the CRA’s website,
|
||||||
<a class="reference external" href="https://www.canada.ca/en/revenue-agency.html">https://www.canada.ca/en/revenue-agency.html</a>.</p>
|
<a class="reference external" href="https://www.canada.ca/en/revenue-agency.html">https://www.canada.ca/en/revenue-agency.html</a>.</p>
|
||||||
<section id="contract-of-service-employment">
|
<section id="contract-of-service-employment">
|
||||||
<h3><span class="section-number">3.6.1. </span>Contract of Service (Employment)<a class="headerlink" href="#contract-of-service-employment" title="Link to this heading">¶</a></h3>
|
<h3><span class="section-number">1.6.1. </span>Contract of Service (Employment)<a class="headerlink" href="#contract-of-service-employment" title="Link to this heading">¶</a></h3>
|
||||||
<p>A <strong>contract of service</strong> is an arrangement whereby an individual (the employee) agrees to
|
<p>A <strong>contract of service</strong> is an arrangement whereby an individual (the employee) agrees to
|
||||||
work on a full-time or part-time basis for an employer for a specified or indeterminate period
|
work on a full-time or part-time basis for an employer for a specified or indeterminate period
|
||||||
of time.</p>
|
of time.</p>
|
||||||
@@ -467,7 +467,7 @@ of time.</p>
|
|||||||
of remuneration.</p>
|
of remuneration.</p>
|
||||||
</section>
|
</section>
|
||||||
<section id="contract-for-service-subcontracting">
|
<section id="contract-for-service-subcontracting">
|
||||||
<h3><span class="section-number">3.6.2. </span>Contract for Service (Subcontracting)<a class="headerlink" href="#contract-for-service-subcontracting" title="Link to this heading">¶</a></h3>
|
<h3><span class="section-number">1.6.2. </span>Contract for Service (Subcontracting)<a class="headerlink" href="#contract-for-service-subcontracting" title="Link to this heading">¶</a></h3>
|
||||||
<p>A <strong>contract for service</strong> is a business relationship whereby one party agrees to perform certain
|
<p>A <strong>contract for service</strong> is a business relationship whereby one party agrees to perform certain
|
||||||
specific work stipulated in the contract for another party. It usually calls for the
|
specific work stipulated in the contract for another party. It usually calls for the
|
||||||
accomplishment of a clearly defined task but does not normally require that the contracting
|
accomplishment of a clearly defined task but does not normally require that the contracting
|
||||||
@@ -505,7 +505,7 @@ invoice alone is not sufficient to confirm self-employment status. Proper assess
|
|||||||
sto ensure accurate classification and compliance with tax and labor regulations.</p>
|
sto ensure accurate classification and compliance with tax and labor regulations.</p>
|
||||||
</section>
|
</section>
|
||||||
<section id="factors-determining-the-type-of-contract">
|
<section id="factors-determining-the-type-of-contract">
|
||||||
<h3><span class="section-number">3.6.3. </span>Factors Determining the Type of Contract<a class="headerlink" href="#factors-determining-the-type-of-contract" title="Link to this heading">¶</a></h3>
|
<h3><span class="section-number">1.6.3. </span>Factors Determining the Type of Contract<a class="headerlink" href="#factors-determining-the-type-of-contract" title="Link to this heading">¶</a></h3>
|
||||||
<p>The CRA uses a two-step approach to examine the relationship between the worker and the
|
<p>The CRA uses a two-step approach to examine the relationship between the worker and the
|
||||||
payer for relationships outside the province of Québec. The approach used for relationships
|
payer for relationships outside the province of Québec. The approach used for relationships
|
||||||
in the province of Québec will be discussed in a later chapter.</p>
|
in the province of Québec will be discussed in a later chapter.</p>
|
||||||
@@ -689,7 +689,7 @@ relationship.</p>
|
|||||||
</section>
|
</section>
|
||||||
</section>
|
</section>
|
||||||
<section id="review-summary">
|
<section id="review-summary">
|
||||||
<h2><span class="section-number">3.7. </span>Review Summary<a class="headerlink" href="#review-summary" title="Link to this heading">¶</a></h2>
|
<h2><span class="section-number">1.7. </span>Review Summary<a class="headerlink" href="#review-summary" title="Link to this heading">¶</a></h2>
|
||||||
<p>The core purpose of the payroll function within any organization is to ensure employees are compensated accurately and
|
<p>The core purpose of the payroll function within any organization is to ensure employees are compensated accurately and
|
||||||
punctually, in accordance with all applicable legislation throughout the full annual payroll cycle. This essential function
|
punctually, in accordance with all applicable legislation throughout the full annual payroll cycle. This essential function
|
||||||
supports employee satisfaction, regulatory compliance, and overall operational efficiency.</p>
|
supports employee satisfaction, regulatory compliance, and overall operational efficiency.</p>
|
||||||
@@ -730,7 +730,7 @@ considerations include:</p>
|
|||||||
<p>Collectively, these factors guide proper categorization for legal and tax purposes, helping organizations ensure compliance and mitigate potential risk.</p>
|
<p>Collectively, these factors guide proper categorization for legal and tax purposes, helping organizations ensure compliance and mitigate potential risk.</p>
|
||||||
</section>
|
</section>
|
||||||
<section id="review-questions">
|
<section id="review-questions">
|
||||||
<h2><span class="section-number">3.8. </span>Review Questions<a class="headerlink" href="#review-questions" title="Link to this heading">¶</a></h2>
|
<h2><span class="section-number">1.8. </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>What is the primary objective of the payroll department?</p>
|
||||||
<blockquote>
|
<blockquote>
|
||||||
<div><p>The primary objective of the payroll department is to pay employees accurately and
|
<div><p>The primary objective of the payroll department is to pay employees accurately and
|
||||||
@@ -832,31 +832,31 @@ morning at 10:00 to discuss?</em></p>
|
|||||||
<div>
|
<div>
|
||||||
<h3><a href="index.html">Table of Contents</a></h3>
|
<h3><a href="index.html">Table of Contents</a></h3>
|
||||||
<ul>
|
<ul>
|
||||||
<li><a class="reference internal" href="#">3. PAYROLL COMPLIANCE AND REGULATIONS</a><ul>
|
<li><a class="reference internal" href="#">1. PAYROLL COMPLIANCE AND REGULATIONS</a><ul>
|
||||||
<li><a class="reference internal" href="#introduction">3.1. Introduction</a></li>
|
<li><a class="reference internal" href="#introduction">1.1. Introduction</a></li>
|
||||||
<li><a class="reference internal" href="#payroll-objectives">3.2. Payroll Objectives</a></li>
|
<li><a class="reference internal" href="#payroll-objectives">1.2. Payroll Objectives</a></li>
|
||||||
<li><a class="reference internal" href="#responsibilities-and-functions-of-payroll">3.3. Responsibilities and Functions of Payroll</a></li>
|
<li><a class="reference internal" href="#responsibilities-and-functions-of-payroll">1.3. Responsibilities and Functions of Payroll</a></li>
|
||||||
<li><a class="reference internal" href="#payroll-stakeholders">3.4. Payroll Stakeholders</a><ul>
|
<li><a class="reference internal" href="#payroll-stakeholders">1.4. Payroll Stakeholders</a><ul>
|
||||||
<li><a class="reference internal" href="#government-stakeholders">3.4.1. Government Stakeholders</a></li>
|
<li><a class="reference internal" href="#government-stakeholders">1.4.1. Government Stakeholders</a></li>
|
||||||
<li><a class="reference internal" href="#federal-government">3.4.2. Federal Government</a></li>
|
<li><a class="reference internal" href="#federal-government">1.4.2. Federal Government</a></li>
|
||||||
<li><a class="reference internal" href="#provincial-territorial-governments">3.4.3. Provincial/Territorial Governments</a></li>
|
<li><a class="reference internal" href="#provincial-territorial-governments">1.4.3. Provincial/Territorial Governments</a></li>
|
||||||
<li><a class="reference internal" href="#internal-stakeholders">3.4.4. Internal Stakeholders</a></li>
|
<li><a class="reference internal" href="#internal-stakeholders">1.4.4. Internal Stakeholders</a></li>
|
||||||
<li><a class="reference internal" href="#external-stakeholders">3.4.5. External Stakeholders</a></li>
|
<li><a class="reference internal" href="#external-stakeholders">1.4.5. External Stakeholders</a></li>
|
||||||
</ul>
|
</ul>
|
||||||
</li>
|
</li>
|
||||||
<li><a class="reference internal" href="#legislations-and-regulations">3.5. Legislations and Regulations</a><ul>
|
<li><a class="reference internal" href="#legislations-and-regulations">1.5. Legislations and Regulations</a><ul>
|
||||||
<li><a class="reference internal" href="#legislative-compliance">3.5.1. Legislative Compliance</a></li>
|
<li><a class="reference internal" href="#legislative-compliance">1.5.1. Legislative Compliance</a></li>
|
||||||
<li><a class="reference internal" href="#self-assessment">3.5.2. Self-Assessment</a></li>
|
<li><a class="reference internal" href="#self-assessment">1.5.2. Self-Assessment</a></li>
|
||||||
</ul>
|
</ul>
|
||||||
</li>
|
</li>
|
||||||
<li><a class="reference internal" href="#the-employee-employer-relationship">3.6. The Employee-Employer Relationship</a><ul>
|
<li><a class="reference internal" href="#the-employee-employer-relationship">1.6. The Employee-Employer Relationship</a><ul>
|
||||||
<li><a class="reference internal" href="#contract-of-service-employment">3.6.1. Contract of Service (Employment)</a></li>
|
<li><a class="reference internal" href="#contract-of-service-employment">1.6.1. Contract of Service (Employment)</a></li>
|
||||||
<li><a class="reference internal" href="#contract-for-service-subcontracting">3.6.2. Contract for Service (Subcontracting)</a></li>
|
<li><a class="reference internal" href="#contract-for-service-subcontracting">1.6.2. Contract for Service (Subcontracting)</a></li>
|
||||||
<li><a class="reference internal" href="#factors-determining-the-type-of-contract">3.6.3. Factors Determining the Type of Contract</a></li>
|
<li><a class="reference internal" href="#factors-determining-the-type-of-contract">1.6.3. Factors Determining the Type of Contract</a></li>
|
||||||
</ul>
|
</ul>
|
||||||
</li>
|
</li>
|
||||||
<li><a class="reference internal" href="#review-summary">3.7. Review Summary</a></li>
|
<li><a class="reference internal" href="#review-summary">1.7. Review Summary</a></li>
|
||||||
<li><a class="reference internal" href="#review-questions">3.8. Review Questions</a></li>
|
<li><a class="reference internal" href="#review-questions">1.8. Review Questions</a></li>
|
||||||
</ul>
|
</ul>
|
||||||
</li>
|
</li>
|
||||||
</ul>
|
</ul>
|
||||||
@@ -864,13 +864,13 @@ morning at 10:00 to discuss?</em></p>
|
|||||||
</div>
|
</div>
|
||||||
<div>
|
<div>
|
||||||
<h4>Previous topic</h4>
|
<h4>Previous topic</h4>
|
||||||
<p class="topless"><a href="contracts.html"
|
<p class="topless"><a href="index.html"
|
||||||
title="previous chapter"><span class="section-number">2. </span>EMPLOYEE vs. INDEPENDENT CONTRACTOR</a></p>
|
title="previous chapter">ABOUT THE AUTHOR</a></p>
|
||||||
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|
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||||||
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title="next chapter"><span class="section-number">4. </span>Canada Pension Plan</a></p>
|
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@@ -900,13 +900,13 @@ morning at 10:00 to discuss?</em></p>
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<title>4. Canada Pension Plan — 🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</title>
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<h3>Navigation</h3>
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@@ -25,13 +25,13 @@
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<li class="nav-item nav-item-this"><a href=""><span class="section-number">4. </span>Canada Pension Plan</a></li>
|
<li class="nav-item nav-item-this"><a href=""><span class="section-number">2. </span>Canada Pension Plan</a></li>
|
||||||
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||||||
</div>
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</div>
|
||||||
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|
||||||
@@ -96,7 +96,7 @@ underscoring their legal significance and the employer’s obligation to ensure
|
|||||||
</ol>
|
</ol>
|
||||||
</div></blockquote>
|
</div></blockquote>
|
||||||
<section id="canada-pension-plan">
|
<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">2. </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>
|
<p>Objective of this section is to enable you to identify the following Canada Pension Plan components:</p>
|
||||||
<blockquote>
|
<blockquote>
|
||||||
<div><ul class="simple">
|
<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
|
<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>
|
individual lives. Québec Pension Plan requirements will be covered later in this course.</p>
|
||||||
<section id="who-must-contribute-to-the-canada-pension-plan">
|
<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">2.1. </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,
|
<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
|
employers and self-employed workers, and from revenue earned on CPP investments. The CPP is not funded through general tax
|
||||||
revenues.</p>
|
revenues.</p>
|
||||||
@@ -188,7 +188,7 @@ to CPP contributions:</p>
|
|||||||
</section>
|
</section>
|
||||||
</section>
|
</section>
|
||||||
<section id="employment-insurance">
|
<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">3. </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>
|
<p>Objective of this section is to enable you to identify the following Employment Insurance components:</p>
|
||||||
<blockquote>
|
<blockquote>
|
||||||
<div><ul class="simple">
|
<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>
|
information about private insurance plans will be covered in the later chapters.</p>
|
||||||
</section>
|
</section>
|
||||||
<section id="record-of-employment">
|
<section id="record-of-employment">
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||||||
<h1><span class="section-number">6. </span>Record of Employment<a class="headerlink" href="#record-of-employment" title="Link to this heading">¶</a></h1>
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<p>The <strong>Record of Employment</strong> (ROE) is the form used by Service Canada to determine an individual’s qualification to collect
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<p>The <strong>Record of Employment</strong> (ROE) is the form used by Service Canada to determine an individual’s qualification to collect
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Employment Insurance benefits when their employment is interrupted, how much the benefit will be and how long they will
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collect it. As payroll is responsible for completing the ROE, the form will be illustrated in this chapter, along with an
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<li><a class="reference internal" href="#record-of-employment">6. Record of Employment</a></li>
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<li><a class="reference internal" href="#record-of-employment">4. Record of Employment</a></li>
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title="previous chapter"><span class="section-number">3. </span>PAYROLL COMPLIANCE AND REGULATIONS</a></p>
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<p class="topless"><a href="compensation.html"
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title="next chapter"><span class="section-number">7. </span>CALCULATING NET EARNINGS</a></p>
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<title>14. Errors and Errata — 🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</title>
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<li class="nav-item nav-item-this"><a href=""><span class="section-number">14. </span>Errors and Errata</a></li>
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<h1><span class="section-number">14. </span>Errors and Errata<a class="headerlink" href="#errors-and-errata" title="Link to this heading">¶</a></h1>
|
<h1><span class="section-number">12. </span>Errors and Errata<a class="headerlink" href="#errors-and-errata" title="Link to this heading">¶</a></h1>
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<li class="nav-item nav-item-this"><a href="">ABOUT THE AUTHOR</a></li>
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to confidently perform essential payroll functions encountered in day-to-day operations.</p>
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to confidently perform essential payroll functions encountered in day-to-day operations.</p>
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<li class="toctree-l1"><a class="reference internal" href="introduction.html">1. INTRODUCTION TO CANADIAN PAYROLL</a><ul>
|
<li class="toctree-l1"><a class="reference internal" href="compliance.html">1. PAYROLL COMPLIANCE AND REGULATIONS</a><ul>
|
||||||
<li class="toctree-l2"><a class="reference internal" href="introduction.html#payroll-objectives-and-definitions">1.1. Payroll Objectives and Definitions</a><ul>
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<li class="toctree-l2"><a class="reference internal" href="compliance.html#introduction">1.1. Introduction</a></li>
|
||||||
<li class="toctree-l3"><a class="reference internal" href="introduction.html#legislation-vs-regulation">1.1.1. Legislation vs. regulation</a></li>
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<li class="toctree-l2"><a class="reference internal" href="compliance.html#payroll-objectives">1.2. Payroll Objectives</a></li>
|
||||||
<li class="toctree-l3"><a class="reference internal" href="introduction.html#payroll-content-knowledge">1.1.2. Payroll Content Knowledge</a></li>
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||||||
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||||||
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||||||
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<li class="toctree-l2"><a class="reference internal" href="introduction.html#payroll-stakeholders">1.2. Payroll Stakeholders</a><ul>
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<li class="toctree-l3"><a class="reference internal" href="compliance.html#contract-of-service-employment">1.6.1. Contract of Service (Employment)</a></li>
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||||||
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||||||
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||||||
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||||||
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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">2.1. Who Must Contribute to the Canada Pension Plan</a></li>
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<li class="toctree-l1"><a class="reference internal" href="cpp-and-ei.html#record-of-employment">4. Record of Employment</a></li>
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||||||
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<li class="toctree-l1"><a class="reference internal" href="compensation.html">5. CALCULATING NET EARNINGS</a><ul>
|
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|
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|
||||||
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|
||||||
</ul>
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|
||||||
</li>
|
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|
||||||
<li class="toctree-l1"><a class="reference internal" href="compliance.html">3. PAYROLL COMPLIANCE AND REGULATIONS</a><ul>
|
<li class="toctree-l1"><a class="reference internal" href="onboarding_employee.html">6. OBNOARDING EMPLOYEE</a><ul>
|
||||||
<li class="toctree-l2"><a class="reference internal" href="compliance.html#introduction">3.1. Introduction</a></li>
|
<li class="toctree-l2"><a class="reference internal" href="onboarding_employee.html#internal-forms">6.1. Internal Forms</a><ul>
|
||||||
<li class="toctree-l2"><a class="reference internal" href="compliance.html#payroll-objectives">3.2. Payroll Objectives</a></li>
|
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#authorization-for-hiring">6.1.1. Authorization for Hiring</a></li>
|
||||||
<li class="toctree-l2"><a class="reference internal" href="compliance.html#responsibilities-and-functions-of-payroll">3.3. Responsibilities and Functions of Payroll</a></li>
|
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#union-membership">6.1.2. Union Membership</a></li>
|
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<li class="toctree-l2"><a class="reference internal" href="compliance.html#payroll-stakeholders">3.4. Payroll Stakeholders</a><ul>
|
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#benefit-enrollment-forms">6.1.3. Benefit Enrollment Forms</a></li>
|
||||||
<li class="toctree-l3"><a class="reference internal" href="compliance.html#government-stakeholders">3.4.1. Government Stakeholders</a></li>
|
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#confidentiality-agreement">6.1.4. Confidentiality Agreement</a></li>
|
||||||
<li class="toctree-l3"><a class="reference internal" href="compliance.html#federal-government">3.4.2. Federal Government</a></li>
|
|
||||||
<li class="toctree-l3"><a class="reference internal" href="compliance.html#provincial-territorial-governments">3.4.3. Provincial/Territorial Governments</a></li>
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||||||
<li class="toctree-l3"><a class="reference internal" href="compliance.html#internal-stakeholders">3.4.4. Internal Stakeholders</a></li>
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<li class="toctree-l3"><a class="reference internal" href="compliance.html#external-stakeholders">3.4.5. External Stakeholders</a></li>
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||||||
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<li class="toctree-l2"><a class="reference internal" href="compliance.html#legislations-and-regulations">3.5. Legislations and Regulations</a><ul>
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|
||||||
<li class="toctree-l3"><a class="reference internal" href="compliance.html#legislative-compliance">3.5.1. Legislative Compliance</a></li>
|
<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#tax-credits-td1">6.2.1. Tax Credits (TD1)</a></li>
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||||||
<li class="toctree-l3"><a class="reference internal" href="compliance.html#self-assessment">3.5.2. Self-Assessment</a></li>
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|
||||||
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|
||||||
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|
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|
||||||
<li class="toctree-l2"><a class="reference internal" href="compliance.html#the-employee-employer-relationship">3.6. The Employee-Employer Relationship</a><ul>
|
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|
||||||
<li class="toctree-l3"><a class="reference internal" href="compliance.html#contract-of-service-employment">3.6.1. Contract of Service (Employment)</a></li>
|
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|
||||||
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||||||
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<li class="toctree-l2"><a class="reference internal" href="compliance.html#review-summary">3.7. Review Summary</a></li>
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<li class="toctree-l2"><a class="reference internal" href="compliance.html#review-questions">3.8. Review Questions</a></li>
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||||||
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|
||||||
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||||||
<li class="toctree-l1"><a class="reference internal" href="cpp-and-ei.html">4. Canada Pension Plan</a><ul>
|
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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">4.1. Who Must Contribute to the Canada Pension Plan</a></li>
|
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<li class="toctree-l1"><a class="reference internal" href="cpp-and-ei.html#employment-insurance">5. Employment Insurance</a></li>
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<li class="toctree-l1"><a class="reference internal" href="cpp-and-ei.html#record-of-employment">6. Record of Employment</a></li>
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<li class="toctree-l1"><a class="reference internal" href="compensation.html">7. CALCULATING NET EARNINGS</a><ul>
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<li class="toctree-l1"><a class="reference internal" href="onboarding_employee.html">8. OBNOARDING EMPLOYEE</a><ul>
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<li class="toctree-l2"><a class="reference internal" href="onboarding_employee.html#internal-forms">8.1. Internal Forms</a><ul>
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<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>
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<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#tax-credits-td1">8.2.1. Tax Credits (TD1)</a></li>
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<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>
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<li class="toctree-l3"><a class="reference internal" href="onboarding_employee.html#review-questions">8.3.1. Review Questions</a></li>
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<li class="toctree-l2"><a class="reference internal" href="review_questions.html#new-employee-information">10.1. New Employee Information</a></li>
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<li class="toctree-l1"><a class="reference internal" href="terminology.html">11. TERMINOLOGY</a><ul>
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<li class="toctree-l2"><a class="reference internal" href="terminology.html#insurable-earnings">11.2. Insurable Earnings</a></li>
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<li class="toctree-l1"><a class="reference internal" href="rates_2025.html">12. RATES FOR 2025</a><ul>
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<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>
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<li class="toctree-l2"><a class="reference internal" href="rates_2025.html#cpp2-contribution-rates-maximums">12.2. CPP2 CONTRIBUTION RATES MAXIMUMS</a></li>
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<li class="toctree-l1"><a class="reference internal" href="references.html">13. REFERENCES</a></li>
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<li class="toctree-l1"><a class="reference internal" href="errata.html">14. Errors and Errata</a></li>
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<li class="nav-item nav-item-this"><a href=""><span class="section-number">8. </span>OBNOARDING EMPLOYEE</a></li>
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<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">6. </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
|
<p>In the context of Canadian payroll administration, onboarding an employee refers to the formal process of integrating a new hire into
|
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both the organizational and payroll systems. It ensures that the employee is properly registered, legally compliant, and ready to be paid
|
both the organizational and payroll systems. It ensures that the employee is properly registered, legally compliant, and ready to be paid
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accurately and on time.</p>
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accurately and on time.</p>
|
||||||
@@ -101,7 +101,7 @@ accurately and on time.</p>
|
|||||||
- Net pay</p></li>
|
- Net pay</p></li>
|
||||||
</ul>
|
</ul>
|
||||||
<section id="internal-forms">
|
<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">6.1. </span>Internal Forms<a class="headerlink" href="#internal-forms" title="Link to this heading">¶</a></h2>
|
||||||
<p>Typical commencement package forms include:</p>
|
<p>Typical commencement package forms include:</p>
|
||||||
<ul class="simple">
|
<ul class="simple">
|
||||||
<li><p>Authorization for hiring</p></li>
|
<li><p>Authorization for hiring</p></li>
|
||||||
@@ -111,7 +111,7 @@ accurately and on time.</p>
|
|||||||
<li><p>Confidentiality agreement</p></li>
|
<li><p>Confidentiality agreement</p></li>
|
||||||
</ul>
|
</ul>
|
||||||
<section id="authorization-for-hiring">
|
<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">6.1.1. </span>Authorization for Hiring<a class="headerlink" href="#authorization-for-hiring" title="Link to this heading">¶</a></h3>
|
||||||
<p>This internal document includes:</p>
|
<p>This internal document includes:</p>
|
||||||
<ul class="simple">
|
<ul class="simple">
|
||||||
<li><p>New employee’s basic info</p></li>
|
<li><p>New employee’s 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>
|
<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>
|
||||||
<section id="union-membership">
|
<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">6.1.2. </span>Union Membership<a class="headerlink" href="#union-membership" title="Link to this heading">¶</a></h3>
|
||||||
<p>For unionized workplaces:</p>
|
<p>For unionized workplaces:</p>
|
||||||
<ul class="simple">
|
<ul class="simple">
|
||||||
<li><p>Amount of union dues to be deducted</p></li>
|
<li><p>Amount of union dues to be deducted</p></li>
|
||||||
@@ -131,7 +131,7 @@ accurately and on time.</p>
|
|||||||
</ul>
|
</ul>
|
||||||
</section>
|
</section>
|
||||||
<section id="benefit-enrollment-forms">
|
<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">6.1.3. </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>
|
<p>Forms cover group insurance and pension plans:</p>
|
||||||
<ul class="simple">
|
<ul class="simple">
|
||||||
<li><p>Employee indicates coverage type</p></li>
|
<li><p>Employee indicates coverage type</p></li>
|
||||||
@@ -139,7 +139,7 @@ accurately and on time.</p>
|
|||||||
</ul>
|
</ul>
|
||||||
</section>
|
</section>
|
||||||
<section id="confidentiality-agreement">
|
<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">6.1.4. </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>
|
<p>A legally binding agreement protecting sensitive company info:</p>
|
||||||
<ul class="simple">
|
<ul class="simple">
|
||||||
<li><p>Defines proprietary data</p></li>
|
<li><p>Defines proprietary data</p></li>
|
||||||
@@ -148,7 +148,7 @@ accurately and on time.</p>
|
|||||||
</section>
|
</section>
|
||||||
</section>
|
</section>
|
||||||
<section id="required-federal-and-provincial-territorial-forms">
|
<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">6.2. </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><strong>Purpose:</strong> Determine correct income tax withholdings.</p>
|
||||||
<p>Forms:</p>
|
<p>Forms:</p>
|
||||||
<ul class="simple">
|
<ul class="simple">
|
||||||
@@ -169,7 +169,7 @@ accurately and on time.</p>
|
|||||||
<li><p>Social Insurance Number</p></li>
|
<li><p>Social Insurance Number</p></li>
|
||||||
</ul>
|
</ul>
|
||||||
<section id="tax-credits-td1">
|
<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">6.2.1. </span>Tax Credits (TD1)<a class="headerlink" href="#tax-credits-td1" title="Link to this heading">¶</a></h3>
|
||||||
<ol class="arabic simple">
|
<ol class="arabic simple">
|
||||||
<li><p>Basic personal amount</p></li>
|
<li><p>Basic personal amount</p></li>
|
||||||
<li><p>Canada caregiver (infirm children)</p></li>
|
<li><p>Canada caregiver (infirm children)</p></li>
|
||||||
@@ -192,7 +192,7 @@ accurately and on time.</p>
|
|||||||
</ul>
|
</ul>
|
||||||
</section>
|
</section>
|
||||||
<section id="tax-credits-tp-1015-3-v-quebec">
|
<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">6.2.2. </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">
|
<ul class="simple">
|
||||||
<li><p>Basic amount</p></li>
|
<li><p>Basic amount</p></li>
|
||||||
<li><p>Transfer from spouse</p></li>
|
<li><p>Transfer from spouse</p></li>
|
||||||
@@ -209,7 +209,7 @@ accurately and on time.</p>
|
|||||||
</section>
|
</section>
|
||||||
</section>
|
</section>
|
||||||
<section id="entering-employee-information-into-sage50">
|
<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">6.3. </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 & Payroll section in the
|
<p>To enter a new employee into the Sage 50 Payroll module (Canada edition), start by navigating to the Employees & Payroll section in the
|
||||||
Home window. Right-click the Employees icon and choose “Add Employee” to begin creating employee’s record. Input the employee’s full legal
|
Home window. Right-click the Employees icon and choose “Add Employee” to begin creating employee’s record. Input the employee’s 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
|
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_005.png" src="_images/onboarding-employee_005.png" />
|
||||||
<img alt="_images/onboarding-employee_006.png" src="_images/onboarding-employee_006.png" />
|
<img alt="_images/onboarding-employee_006.png" src="_images/onboarding-employee_006.png" />
|
||||||
<section id="review-questions">
|
<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">6.3.1. </span>Review Questions<a class="headerlink" href="#review-questions" title="Link to this heading">¶</a></h3>
|
||||||
<ol class="arabic">
|
<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>
|
<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
|
<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>
|
</section>
|
||||||
<section id="content-review-highlights">
|
<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">6.4. </span>Content Review Highlights<a class="headerlink" href="#content-review-highlights" title="Link to this heading">¶</a></h2>
|
||||||
<ul class="simple">
|
<ul class="simple">
|
||||||
<li><p>Consent is required for personal info collection</p></li>
|
<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>
|
<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>
|
</ul>
|
||||||
</section>
|
</section>
|
||||||
<section id="review-questions-sample">
|
<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">6.5. </span>Review Questions (Sample)<a class="headerlink" href="#review-questions-sample" title="Link to this heading">¶</a></h2>
|
||||||
<ol class="arabic simple">
|
<ol class="arabic simple">
|
||||||
<li><p>What does an offer letter signature signify?</p></li>
|
<li><p>What does an offer letter signature signify?</p></li>
|
||||||
<li><p>What documents are included in a commencement package?</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>
|
</ol>
|
||||||
</section>
|
</section>
|
||||||
<section id="example-evaluations">
|
<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">6.6. </span>Example Evaluations<a class="headerlink" href="#example-evaluations" title="Link to this heading">¶</a></h2>
|
||||||
<p><strong>Gloria Meyer (Alberta):</strong>
|
<p><strong>Gloria Meyer (Alberta):</strong>
|
||||||
- Claimed: Basic, eligible dependant, transferred tuition
|
- Claimed: Basic, eligible dependant, transferred tuition
|
||||||
- Appears accurate</p>
|
- Appears accurate</p>
|
||||||
@@ -311,26 +311,26 @@ Payroll department holds this information, it cannot be disclosed to supervisors
|
|||||||
<div>
|
<div>
|
||||||
<h3><a href="index.html">Table of Contents</a></h3>
|
<h3><a href="index.html">Table of Contents</a></h3>
|
||||||
<ul>
|
<ul>
|
||||||
<li><a class="reference internal" href="#">8. OBNOARDING EMPLOYEE</a><ul>
|
<li><a class="reference internal" href="#">6. OBNOARDING EMPLOYEE</a><ul>
|
||||||
<li><a class="reference internal" href="#internal-forms">8.1. Internal Forms</a><ul>
|
<li><a class="reference internal" href="#internal-forms">6.1. 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="#authorization-for-hiring">6.1.1. 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="#union-membership">6.1.2. 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="#benefit-enrollment-forms">6.1.3. 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="#confidentiality-agreement">6.1.4. Confidentiality Agreement</a></li>
|
||||||
</ul>
|
</ul>
|
||||||
</li>
|
</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="#required-federal-and-provincial-territorial-forms">6.2. 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-td1">6.2.1. 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="#tax-credits-tp-1015-3-v-quebec">6.2.2. Tax Credits (TP-1015.3-V - Québec)</a></li>
|
||||||
</ul>
|
</ul>
|
||||||
</li>
|
</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="#entering-employee-information-into-sage50">6.3. 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="#review-questions">6.3.1. Review Questions</a></li>
|
||||||
</ul>
|
</ul>
|
||||||
</li>
|
</li>
|
||||||
<li><a class="reference internal" href="#content-review-highlights">8.4. Content Review Highlights</a></li>
|
<li><a class="reference internal" href="#content-review-highlights">6.4. 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="#review-questions-sample">6.5. 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="#example-evaluations">6.6. Example Evaluations</a></li>
|
||||||
</ul>
|
</ul>
|
||||||
</li>
|
</li>
|
||||||
</ul>
|
</ul>
|
||||||
@@ -339,12 +339,12 @@ Payroll department holds this information, it cannot be disclosed to supervisors
|
|||||||
<div>
|
<div>
|
||||||
<h4>Previous topic</h4>
|
<h4>Previous topic</h4>
|
||||||
<p class="topless"><a href="compensation.html"
|
<p class="topless"><a href="compensation.html"
|
||||||
title="previous chapter"><span class="section-number">7. </span>CALCULATING NET EARNINGS</a></p>
|
title="previous chapter"><span class="section-number">5. </span>CALCULATING NET EARNINGS</a></p>
|
||||||
</div>
|
</div>
|
||||||
<div>
|
<div>
|
||||||
<h4>Next topic</h4>
|
<h4>Next topic</h4>
|
||||||
<p class="topless"><a href="payroll_accounting.html"
|
<p class="topless"><a href="payroll_accounting.html"
|
||||||
title="next chapter"><span class="section-number">9. </span>Payroll Accounting</a></p>
|
title="next chapter"><span class="section-number">7. </span>Payroll Accounting</a></p>
|
||||||
</div>
|
</div>
|
||||||
<div role="note" aria-label="source link">
|
<div role="note" aria-label="source link">
|
||||||
<h3>This Page</h3>
|
<h3>This Page</h3>
|
||||||
@@ -374,13 +374,13 @@ Payroll department holds this information, it cannot be disclosed to supervisors
|
|||||||
<a href="genindex.html" title="General Index"
|
<a href="genindex.html" title="General Index"
|
||||||
>index</a></li>
|
>index</a></li>
|
||||||
<li class="right" >
|
<li class="right" >
|
||||||
<a href="payroll_accounting.html" title="9. Payroll Accounting"
|
<a href="payroll_accounting.html" title="7. Payroll Accounting"
|
||||||
>next</a> |</li>
|
>next</a> |</li>
|
||||||
<li class="right" >
|
<li class="right" >
|
||||||
<a href="compensation.html" title="7. CALCULATING NET EARNINGS"
|
<a href="compensation.html" title="5. CALCULATING NET EARNINGS"
|
||||||
>previous</a> |</li>
|
>previous</a> |</li>
|
||||||
<li class="nav-item nav-item-0"><a href="index.html">🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</a> »</li>
|
<li class="nav-item nav-item-0"><a href="index.html">🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</a> »</li>
|
||||||
<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">6. </span>OBNOARDING EMPLOYEE</a></li>
|
||||||
</ul>
|
</ul>
|
||||||
</div>
|
</div>
|
||||||
<div class="footer" role="contentinfo">
|
<div class="footer" role="contentinfo">
|
||||||
|
|||||||
38
docs/build/html/payroll_accounting.html
vendored
38
docs/build/html/payroll_accounting.html
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|
|||||||
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|
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|
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|
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|
||||||
|
|
||||||
<title>9. Payroll Accounting — 🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</title>
|
<title>7. Payroll Accounting — 🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</title>
|
||||||
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<li class="nav-item nav-item-this"><a href=""><span class="section-number">9. </span>Payroll Accounting</a></li>
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<h1><span class="section-number">9. </span>Payroll Accounting<a class="headerlink" href="#payroll-accounting" title="Link to this heading">¶</a></h1>
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<h1><span class="section-number">7. </span>Payroll Accounting<a class="headerlink" href="#payroll-accounting" title="Link to this heading">¶</a></h1>
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<h2><span class="section-number">9.1. </span>Journal Entries<a class="headerlink" href="#journal-entries" title="Link to this heading">¶</a></h2>
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<h2><span class="section-number">7.1. </span>Journal Entries<a class="headerlink" href="#journal-entries" title="Link to this heading">¶</a></h2>
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<h3><span class="section-number">9.1.1. </span>Accounting Recap<a class="headerlink" href="#accounting-recap" title="Link to this heading">¶</a></h3>
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<h3><span class="section-number">7.1.1. </span>Accounting Recap<a class="headerlink" href="#accounting-recap" title="Link to this heading">¶</a></h3>
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<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">
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<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">
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<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">
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<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">
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|||||||
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>
|
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>
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<section id="id1">
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<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">7.1.2. </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 organization’s accounts. Each payroll run generates a series of journal entries that reflect the distribution of wages, taxes, and deductions across various accounts.
|
<p>Journal entries are a key part of payroll accounting, as they document the financial impact of payroll transactions on the organization’s 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 organization’s 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>
|
These entries are essential for maintaining accurate financial records and ensuring that the organization’s 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>
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<h3><a href="index.html">Table of Contents</a></h3>
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<ul>
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<li><a class="reference internal" href="#">9. Payroll Accounting</a><ul>
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<li><a class="reference internal" href="#">7. Payroll Accounting</a><ul>
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||||||
<li><a class="reference internal" href="#journal-entries">9.1. Journal Entries</a><ul>
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<li><a class="reference internal" href="#journal-entries">7.1. Journal Entries</a><ul>
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||||||
<li><a class="reference internal" href="#accounting-recap">9.1.1. Accounting Recap</a></li>
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<li><a class="reference internal" href="#accounting-recap">7.1.1. Accounting Recap</a></li>
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||||||
<li><a class="reference internal" href="#id1">9.1.2. Journal Entries</a></li>
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<li><a class="reference internal" href="#id1">7.1.2. Journal Entries</a></li>
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title="previous chapter"><span class="section-number">6. </span>OBNOARDING EMPLOYEE</a></p>
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<title>12. RATES FOR 2025 — 🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</title>
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<title>10. RATES FOR 2025 — 🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</title>
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<li class="nav-item nav-item-this"><a href=""><span class="section-number">12. </span>RATES FOR 2025</a></li>
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<section id="rates-for-2025">
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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">10. </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">
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<section id="canada-quebec-pension-plan-cpp-qpp">
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<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">10.1. </span>CANADA / QUEBEC PENSION PLAN (CPP / QPP)<a class="headerlink" href="#canada-quebec-pension-plan-cpp-qpp" title="Link to this heading">¶</a></h2>
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<caption><span class="caption-text">CANADA / QUEBEC PENSION PLAN (CPP / QPP)</span><a class="headerlink" href="#id1" title="Link to this table">¶</a></caption>
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<caption><span class="caption-text">CANADA / QUEBEC PENSION PLAN (CPP / QPP)</span><a class="headerlink" href="#id1" title="Link to this table">¶</a></caption>
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<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">10.2. </span>CPP2 CONTRIBUTION RATES MAXIMUMS<a class="headerlink" href="#cpp2-contribution-rates-maximums" title="Link to this heading">¶</a></h2>
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||||||
<li><a class="reference internal" href="#">12. RATES FOR 2025</a><ul>
|
<li><a class="reference internal" href="#">10. RATES FOR 2025</a><ul>
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<li><a class="reference internal" href="#canada-quebec-pension-plan-cpp-qpp">12.1. CANADA / QUEBEC PENSION PLAN (CPP / QPP)</a></li>
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<li><a class="reference internal" href="#cpp2-contribution-rates-maximums">12.2. CPP2 CONTRIBUTION RATES MAXIMUMS</a></li>
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title="next chapter"><span class="section-number">13. </span>REFERENCES</a></p>
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<li class="nav-item nav-item-this"><a href=""><span class="section-number">13. </span>REFERENCES</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>
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<h1><span class="section-number">11. </span>REFERENCES<a class="headerlink" href="#references" title="Link to this heading">¶</a></h1>
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<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>
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<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>
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<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>
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<li class="nav-item nav-item-this"><a href=""><span class="section-number">13. </span>REFERENCES</a></li>
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<li class="nav-item nav-item-this"><a href=""><span class="section-number">10. </span>REVIEW QUESTIONS</a></li>
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<h1><span class="section-number">8. </span>REVIEW QUESTIONS<a class="headerlink" href="#review-questions" title="Link to this heading">¶</a></h1>
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<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>
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title="next chapter"><span class="section-number">11. </span>TERMINOLOGY</a></p>
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<li class="nav-item nav-item-this"><a href=""><span class="section-number">10. </span>REVIEW QUESTIONS</a></li>
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<li class="nav-item nav-item-this"><a href=""><span class="section-number">11. </span>TERMINOLOGY</a></li>
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<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">9. </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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<h2><span class="section-number">9.1. </span>Pensionable Earnings<a class="headerlink" href="#pensionable-earnings" title="Link to this heading">¶</a></h2>
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<h2><span class="section-number">11.2. </span>Insurable Earnings<a class="headerlink" href="#insurable-earnings" title="Link to this heading">¶</a></h2>
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<h2><span class="section-number">9.2. </span>Insurable Earnings<a class="headerlink" href="#insurable-earnings" title="Link to this heading">¶</a></h2>
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<ul>
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<li><a class="reference internal" href="#">11. TERMINOLOGY</a><ul>
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<li><a class="reference internal" href="#">9. TERMINOLOGY</a><ul>
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<li><a class="reference internal" href="#pensionable-earnings">11.1. Pensionable Earnings</a></li>
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<li><a class="reference internal" href="#pensionable-earnings">9.1. Pensionable Earnings</a></li>
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||||||
<li><a class="reference internal" href="#insurable-earnings">11.2. Insurable Earnings</a></li>
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<li><a class="reference internal" href="#insurable-earnings">9.2. Insurable Earnings</a></li>
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<p class="topless"><a href="review_questions.html"
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<p class="topless"><a href="review_questions.html"
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title="previous chapter"><span class="section-number">10. </span>REVIEW QUESTIONS</a></p>
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title="previous chapter"><span class="section-number">8. </span>REVIEW QUESTIONS</a></p>
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<p class="topless"><a href="rates_2025.html"
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<p class="topless"><a href="rates_2025.html"
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title="next chapter"><span class="section-number">12. </span>RATES FOR 2025</a></p>
|
title="next chapter"><span class="section-number">10. </span>RATES FOR 2025</a></p>
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<h3>This Page</h3>
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<a href="genindex.html" title="General Index"
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<a href="genindex.html" title="General Index"
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>index</a></li>
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>index</a></li>
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<li class="right" >
|
<li class="right" >
|
||||||
<a href="rates_2025.html" title="12. RATES FOR 2025"
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<a href="rates_2025.html" title="10. RATES FOR 2025"
|
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>next</a> |</li>
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>next</a> |</li>
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<li class="right" >
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<li class="right" >
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<a href="review_questions.html" title="10. REVIEW QUESTIONS"
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<a href="review_questions.html" title="8. REVIEW QUESTIONS"
|
||||||
>previous</a> |</li>
|
>previous</a> |</li>
|
||||||
<li class="nav-item nav-item-0"><a href="index.html">🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</a> »</li>
|
<li class="nav-item nav-item-0"><a href="index.html">🍁 Payroll Administration Fall 2025 (v25.08.23) documentation</a> »</li>
|
||||||
<li class="nav-item nav-item-this"><a href=""><span class="section-number">11. </span>TERMINOLOGY</a></li>
|
<li class="nav-item nav-item-this"><a href=""><span class="section-number">9. </span>TERMINOLOGY</a></li>
|
||||||
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