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@@ -134,7 +134,7 @@ professional landscape.
**Personal and Professional Skills**
The following personal and professional skills will assist payroll practitioners in dealing with
The following personal and professional skills will assist payroll professionals 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
@@ -149,8 +149,19 @@ the various stakeholders involved in the payroll process:
**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:
Professional behaviour and ethical conduct are critical components of an effective payroll practitioner's skill set. In this
role, individuals must demonstrate trustworthiness, given the constant potential for fraud. Attention to detail is essential,
making conscientiousness a valued trait.
Payroll professionals handle sensitive personal and financial data, so discretion is non-negotiable. They must also be
tactful when interacting with employees, particularly in conversations involving financial concerns, which may be emotionally
charged. Perceptiveness helps practitioners understand multiple perspectives in complex situations.
The ability to work under pressure is key, especially when managing absolute deadlines. Sound judgment and common sense allow
practitioners to identify problems quickly and implement effective solutions. Finally, maintaining objectivity and a factual
approach when responding to questions and inquiries ensures fair and consistent communication across the organization.
Effective payroll professionals should be:
- trustworthy, as the potential for fraud is ever present
- conscientious, with a keen attention to detail
@@ -164,10 +175,10 @@ must have. Effective payroll professionals should be:
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.
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,
and payroll practitioners are encouraged to adopt a proactive, service-oriented approach in meeting their needs and
expectations.
Payroll management stakeholders are the federal and provincial/territorial governments, the
internal stakeholders and the external stakeholders. Internal stakeholders include employees,
@@ -178,18 +189,17 @@ 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.
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
payroll-related laws.
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.
As a result, payroll departments are directly influenced by legislative developments at both the federal and provincial or
territorial levels, making ongoing legal awareness a critical component of payroll management.
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
@@ -257,10 +267,14 @@ 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.
Canada's division of authority between federal and provincial or territorial governments directly influences payroll
practices, particularly in relation to employment and labour standards. These standards are governed independently by
each province and territory, and outline key rules related to workplace conditions.
Among the issues addressed are hours of work, minimum wage, overtime eligibility, vacation entitlements, and termination pay.
Because each jurisdiction sets its own legislation, payroll practitioners must ensure compliance with the specific
requirements applicable to the location where the employee works. Navigating these variations is an essential aspect of
effective and lawful payroll administration.
**Example:**
@@ -284,9 +298,11 @@ 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.
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
compensation, employers who oversee workforce management, and other internal teams—such as human resources, finance,
and operations—that collaborate closely with payroll for data sharing, planning, and compliance. These stakeholders play a
direct role in shaping how payroll services are delivered and supported across the organization.
**Employers** - Management may require certain information from payroll to make sound
business decisions.
@@ -309,11 +325,16 @@ 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.
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
plan administrators, unions, and third-party service vendors. Although not formally part of the company or regulatory bodies,
their involvement directly impacts payroll operations.
Ensuring compliance with external stakeholder requirements is a key duty of the payroll department. This often includes
verifying data, meeting contractual obligations, and coordinating financial transactions. In many cases, payroll
professionals must initiate cheque requests through accounts payable and submit accompanying documentation to these
organizations to fulfill obligations accurately and on time. Maintaining strong communication and attention to detail with
external partners is essential for smooth and compliant payroll administration.
**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
@@ -354,11 +375,10 @@ Federal and provincial/territorial legislation, and amendments to existing legis
regulations, can affect the operations of a payroll department, as the requirement to comply
with the new or amended legislation must be satisfied.
Legislation determines what the rules are, while regulations determine how the rules are to be
It is important to note the difference between legislation and regulatio. **Legislation** determines what the rules are, while **regulations** determine how the rules are to be
applied.
The methods for calculating income tax deductions are specified by the federal government
through regulations.
The methods for calculating income tax deductions are specified by the federal government through regulations.
*Example:*
@@ -374,21 +394,19 @@ through regulations.
may reasonably be expected to exceed $5,000 in the taxation year of the employee in which the payment is made, the amount to be deducted or withheld by the employer is dictated
through a calculation prescribed in the regulation within the Act.
Legislative change can prove to be anything but routine, particularly if the change is
implemented at a time other than at the beginning of a calendar year, or involves some sort of
retroactivity. The change may involve a series of adjustments to individual payroll accounts
and extra work for the payroll department to finalize reconciliations and year-end balancing
requirements.
Legislative changes can present significant challenges for payroll departments, especially when implemented mid-year or
applied retroactively. These adjustments often require updates to individual payroll records, additional reconciliation
efforts, and revisions to year-end balancing procedures, placing extra demands on payroll professionals.
In general, legislation, and in particular, labour legislation, is constantly being changed,
amended, repealed or revised. As a result, it is essential to keep up-to-date with the changes
in the jurisdiction(s) in which your organization operates.
Labour legislation in particular is subject to frequent modifications, including amendments, repeals, and revisions.
Therefore, it is critical for payroll practitioners to remain informed about the laws and regulatory updates relevant to
each jurisdiction in which their organization operates.
Changes in legislation are generally publicized in the media. In large organizations, human
resource departments, tax specialists and corporate legal departments often provide this type
of information. However, in both large and small organizations, the payroll practitioner
should be proactive in keeping abreast of changes and bringing them to the attention of those
involved. There are many ways to keep informed of changes that impact payroll.
Legislative changes are typically communicated through public media. In larger organizations, updates may also be shared
internally by human resources, tax specialists, or legal departments. Regardless of the organization’s size, payroll
professionals should take a proactive role in monitoring relevant developments and ensuring that all affected parties are
made aware of any changes. A variety of resources—such as government publications, industry newsletters, professional
associations, and online portals—can support this ongoing effort to stay informed and maintain compliance.
The following are some of the available resources:
@@ -409,30 +427,23 @@ The following are some of the available resources:
Legislative Compliance
~~~~~~~~~~~~~~~~~~~~~~~
In addition to payroll's primary role of paying employees accurately and on time, payroll
practitioners are also directly or indirectly responsible for supporting and/or ensuring
compliance with the requirements of various government acts. Where legislation requires
employer compliance (for example, remittance of payroll source deductions, Canada Pension
Plan contributions, Employment Insurance premiums, and federal and provincial/territorial
income tax deductions) there are financial penalties or the possibility of legal action to
encourage compliance.
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
payroll source deductions, Canada Pension Plan contributions, Employment Insurance premiums, and both federal and
provincial/territorial income tax withholdings. When these obligations are not met, employers may face serious consequences,
including financial penalties or legal enforcement actions designed to ensure compliance.
Fines, penalties and interest charges are typically a result of audits and legal action. These
may result in seizure of bank accounts and/or assets, fines of $1,000 to $25,000, and in some
cases, jail sentences up to 12 months.
Penalties such as fines, interest charges, and legal sanctions often result from audits or investigations into
non-compliance. In more severe cases, enforcement measures may include seizure of bank accounts or assets, and fines.
Government departments and agencies responsible for administering legislation employ a
variety of systems for tracking compliance. Some systems, such as the monitoring of source
deduction remittances, are ongoing, with regimented reporting time frames that lay down a
continual audit trail. Failure to meet the requirements of this legislation will incur a rapid
response that may result in fines and penalties.
To monitor and enforce these requirements, government agencies utilize a range of tracking systems. Some, such as those
used to oversee source deduction remittances, rely on strict reporting schedules that create a consistent audit trail.
Failure to meet these time-sensitive obligations typically triggers a swift response and the imposition of penalties.
Reporting requirements that do not involve ongoing, regular reporting may not impose an
immediate fine but may initiate a visit from an auditor or other official seeking compliance.
Some compliance systems operate quarterly or annually, and the observations raised by these
systems will result in requests for additional information or explanation and, in some cases, a
request for a supplementary payment and/or a fine.
For reporting requirements that are less frequent or ongoing, the consequences of non-compliance may not be immediate.
However, they can lead to scrutiny from auditors or other officials tasked with verifying that payroll practices align with
current legislative standards. Payroll professionals must remain vigilant and informed to protect their organization from
financial and legal risk.
*Example:*
@@ -445,17 +456,11 @@ request for a supplementary payment and/or a fine.
Self-Assessment
~~~~~~~~~~~~~~~
Both the federal and provincial/territorial tax systems are based on the principle of selfassessment. This means that
taxpayers and their agents, including employers, are responsible for calculating, reporting and remitting their
contributions and the amounts withheld within the prescribed deadlines.
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.
As administrators of the tax system, the Canada Revenue Agency (CRA) and Revenu Québec (RQ) must ensure that each individual
and organization is compliant and pays all of the amounts owing.
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.
Both the CRA and RQ recognize that taxpayers and agents are entitled to plan their affairs so
that they pay only the amounts that are legally due. It is acceptable to take advantage of tax
rules to minimize the amount of taxes paid. It is not lawful, however, to evade taxes owed by
failing to report income, failing to remit taxes due or providing the CRA or RQ with false information.
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.
The Employee-Employer Relationship
-----------------------------------

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@@ -158,7 +158,7 @@ payroll practitioner should demonstrate a willingness to embrace continuous lear
best practices. This adaptability not only enhances performance but also supports long-term career growth in an ever-changing
professional landscape.</p>
<p><strong>Personal and Professional Skills</strong></p>
<p>The following personal and professional skills will assist payroll practitioners in dealing with
<p>The following personal and professional skills will assist payroll professionals in dealing with
the various stakeholders involved in the payroll process:</p>
<blockquote>
<div><ul class="simple">
@@ -170,8 +170,16 @@ the various stakeholders involved in the payroll process:</p>
</ul>
</div></blockquote>
<p><strong>Behavioural and Ethical Standards</strong></p>
<p>Behaviour and ethics are two areas that build on the skills that an effective payroll practitioner
must have. Effective payroll professionals should be:</p>
<p>Professional behaviour and ethical conduct are critical components of an effective payroll practitioner’s skill set. In this
role, individuals must demonstrate trustworthiness, given the constant potential for fraud. Attention to detail is essential,
making conscientiousness a valued trait.</p>
<p>Payroll professionals handle sensitive personal and financial data, so discretion is non-negotiable. They must also be
tactful when interacting with employees, particularly in conversations involving financial concerns, which may be emotionally
charged. Perceptiveness helps practitioners understand multiple perspectives in complex situations.</p>
<p>The ability to work under pressure is key, especially when managing absolute deadlines. Sound judgment and common sense allow
practitioners to identify problems quickly and implement effective solutions. Finally, maintaining objectivity and a factual
approach when responding to questions and inquiries ensures fair and consistent communication across the organization.</p>
<p>Effective payroll professionals should be:</p>
<blockquote>
<div><ul class="simple">
<li><p>trustworthy, as the potential for fraud is ever present</p></li>
@@ -187,10 +195,10 @@ must have. Effective payroll professionals should be:</p>
</section>
<section id="payroll-stakeholders">
<h2><span class="section-number">4.4. </span>Payroll Stakeholders<a class="headerlink" href="#payroll-stakeholders" title="Link to this heading"></a></h2>
<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.
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.</p>
<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,
and payroll practitioners are encouraged to adopt a proactive, service-oriented approach in meeting their needs and
expectations.</p>
<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. External stakeholders include
@@ -198,16 +206,15 @@ benefit carriers, courts, unions, pension providers, charities, third party admi
outsource/software vendors.</p>
<section id="government-stakeholders">
<h3><span class="section-number">4.4.1. </span>Government Stakeholders<a class="headerlink" href="#government-stakeholders" title="Link to this heading"></a></h3>
<p>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.</p>
<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
payroll-related laws.</p>
<p>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.</p>
<p>As a result, payroll practitioners and their organizations are affected by the enactment of
legislation at both the federal and provincial/territorial level.</p>
<p>As a result, payroll departments are directly influenced by legislative developments at both the federal and provincial or
territorial levels, making ongoing legal awareness a critical component of payroll management.</p>
<p>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
@@ -276,10 +283,13 @@ territories exists over:</p>
<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>Canada’s division of authority between federal and provincial or territorial governments directly influences payroll
practices, particularly in relation to employment and labour standards. These standards are governed independently by
each province and territory, and outline key rules related to workplace conditions.</p>
<p>Among the issues addressed are hours of work, minimum wage, overtime eligibility, vacation entitlements, and termination pay.
Because each jurisdiction sets its own legislation, payroll practitioners must ensure compliance with the specific
requirements applicable to the location where the employee works. Navigating these variations is an essential aspect of
effective and lawful payroll administration.</p>
<blockquote>
<div><p><strong>Example:</strong></p>
<p>The Gap is a retail business with stores across Canada. The workers in each store are
@@ -300,9 +310,11 @@ group of employees who fall under provincial/territorial legislation.</p>
</section>
<section id="internal-stakeholders">
<h3><span class="section-number">4.4.4. </span>Internal Stakeholders<a class="headerlink" href="#internal-stakeholders" title="Link to this heading"></a></h3>
<p>Internal stakeholders are those individuals or departments closely related to the organization
that the payroll department is serving. This group includes employers, employees and other
departments in the organization.</p>
<p>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
compensation, employers who oversee workforce management, and other internal teams—such as human resources, finance,
and operations—that collaborate closely with payroll for data sharing, planning, and compliance. These stakeholders play a
direct role in shaping how payroll services are delivered and supported across the organization.</p>
<p><strong>Employers</strong> - Management may require certain information from payroll to make sound
business decisions.</p>
<p><strong>Employees</strong> - Employees require that their pay is received in a timely and accurate manner to
@@ -320,11 +332,15 @@ information for budgeting, analytical and quality purposes.</p>
</section>
<section id="external-stakeholders">
<h3><span class="section-number">4.4.5. </span>External Stakeholders<a class="headerlink" href="#external-stakeholders" title="Link to this heading"></a></h3>
<p>External stakeholders are organizations that are neither government nor internal stakeholders,
yet have a close working relationship with the payroll function. Compliance with external
stakeholder requirements is also a responsibility of the payroll department. In most cases,
compliance will require that payroll request a cheque from accounts payable and send it to
the external organization along with supporting documentation.</p>
<p>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
plan administrators, unions, and third-party service vendors. Although not formally part of the company or regulatory bodies,
their involvement directly impacts payroll operations.</p>
<p>Ensuring compliance with external stakeholder requirements is a key duty of the payroll department. This often includes
verifying data, meeting contractual obligations, and coordinating financial transactions. In many cases, payroll
professionals must initiate cheque requests through accounts payable and submit accompanying documentation to these
organizations to fulfill obligations accurately and on time. Maintaining strong communication and attention to detail with
external partners is essential for smooth and compliant payroll administration.</p>
<p><strong>Benefit Carriers</strong> are insurance companies that provide benefit coverage to employees.
Payroll is responsible for deducting and remitting premiums for the insurance coverage to the
carriers and for providing reports on employee enrolment and coverage levels.</p>
@@ -357,10 +373,9 @@ efficiently.</p>
<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
with the new or amended legislation must be satisfied.</p>
<p>Legislation determines what the rules are, while regulations determine how the rules are to be
<p>It is important to note the difference between legislation and regulatio. <strong>Legislation</strong> determines what the rules are, while <strong>regulations</strong> determine how the rules are to be
applied.</p>
<p>The methods for calculating income tax deductions are specified by the federal government
through regulations.</p>
<p>The methods for calculating income tax deductions are specified by the federal government through regulations.</p>
<blockquote>
<div><p><em>Example:</em></p>
<p><em>The Income Tax Act</em></p>
@@ -371,19 +386,17 @@ through regulations.</p>
may reasonably be expected to exceed $5,000 in the taxation year of the employee in which the payment is made, the amount to be deducted or withheld by the employer is dictated
through a calculation prescribed in the regulation within the Act.</p>
</div></blockquote>
<p>Legislative change can prove to be anything but routine, particularly if the change is
implemented at a time other than at the beginning of a calendar year, or involves some sort of
retroactivity. The change may involve a series of adjustments to individual payroll accounts
and extra work for the payroll department to finalize reconciliations and year-end balancing
requirements.</p>
<p>In general, legislation, and in particular, labour legislation, is constantly being changed,
amended, repealed or revised. As a result, it is essential to keep up-to-date with the changes
in the jurisdiction(s) in which your organization operates.</p>
<p>Changes in legislation are generally publicized in the media. In large organizations, human
resource departments, tax specialists and corporate legal departments often provide this type
of information. However, in both large and small organizations, the payroll practitioner
should be proactive in keeping abreast of changes and bringing them to the attention of those
involved. There are many ways to keep informed of changes that impact payroll.</p>
<p>Legislative changes can present significant challenges for payroll departments, especially when implemented mid-year or
applied retroactively. These adjustments often require updates to individual payroll records, additional reconciliation
efforts, and revisions to year-end balancing procedures, placing extra demands on payroll professionals.</p>
<p>Labour legislation in particular is subject to frequent modifications, including amendments, repeals, and revisions.
Therefore, it is critical for payroll practitioners to remain informed about the laws and regulatory updates relevant to
each jurisdiction in which their organization operates.</p>
<p>Legislative changes are typically communicated through public media. In larger organizations, updates may also be shared
internally by human resources, tax specialists, or legal departments. Regardless of the organization’s size, payroll
professionals should take a proactive role in monitoring relevant developments and ensuring that all affected parties are
made aware of any changes. A variety of resources—such as government publications, industry newsletters, professional
associations, and online portals—can support this ongoing effort to stay informed and maintain compliance.</p>
<p>The following are some of the available resources:</p>
<blockquote>
<div><ul class="simple">
@@ -398,26 +411,20 @@ involved. There are many ways to keep informed of changes that impact payroll.</
</div></blockquote>
<section id="legislative-compliance">
<h3><span class="section-number">4.5.1. </span>Legislative Compliance<a class="headerlink" href="#legislative-compliance" title="Link to this heading"></a></h3>
<p>In addition to payroll’s primary role of paying employees accurately and on time, payroll
practitioners are also directly or indirectly responsible for supporting and/or ensuring
compliance with the requirements of various government acts. Where legislation requires
employer compliance (for example, remittance of payroll source deductions, Canada Pension
Plan contributions, Employment Insurance premiums, and federal and provincial/territorial
income tax deductions) there are financial penalties or the possibility of legal action to
encourage compliance.</p>
<p>Fines, penalties and interest charges are typically a result of audits and legal action. These
may result in seizure of bank accounts and/or assets, fines of $1,000 to $25,000, and in some
cases, jail sentences up to 12 months.</p>
<p>Government departments and agencies responsible for administering legislation employ a
variety of systems for tracking compliance. Some systems, such as the monitoring of source
deduction remittances, are ongoing, with regimented reporting time frames that lay down a
continual audit trail. Failure to meet the requirements of this legislation will incur a rapid
response that may result in fines and penalties.</p>
<p>Reporting requirements that do not involve ongoing, regular reporting may not impose an
immediate fine but may initiate a visit from an auditor or other official seeking compliance.</p>
<p>Some compliance systems operate quarterly or annually, and the observations raised by these
systems will result in requests for additional information or explanation and, in some cases, a
request for a supplementary payment and/or a fine.</p>
<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
payroll source deductions, Canada Pension Plan contributions, Employment Insurance premiums, and both federal and
provincial/territorial income tax withholdings. When these obligations are not met, employers may face serious consequences,
including financial penalties or legal enforcement actions designed to ensure compliance.</p>
<p>Penalties such as fines, interest charges, and legal sanctions often result from audits or investigations into
non-compliance. In more severe cases, enforcement measures may include seizure of bank accounts or assets, and fines.</p>
<p>To monitor and enforce these requirements, government agencies utilize a range of tracking systems. Some, such as those
used to oversee source deduction remittances, rely on strict reporting schedules that create a consistent audit trail.
Failure to meet these time-sensitive obligations typically triggers a swift response and the imposition of penalties.</p>
<p>For reporting requirements that are less frequent or ongoing, the consequences of non-compliance may not be immediate.
However, they can lead to scrutiny from auditors or other officials tasked with verifying that payroll practices align with
current legislative standards. Payroll professionals must remain vigilant and informed to protect their organization from
financial and legal risk.</p>
<blockquote>
<div><p><em>Example:</em></p>
<p><strong>Record of Employment (ROE)</strong> issuance
@@ -428,15 +435,9 @@ information slips issued at year-end to validate the amounts of CPP contribution
</section>
<section id="self-assessment">
<h3><span class="section-number">4.5.2. </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 are based on the principle of selfassessment. This means that
taxpayers and their agents, including employers, are responsible for calculating, reporting and remitting their
contributions and the amounts withheld within the prescribed deadlines.</p>
<p>As administrators of the tax system, the Canada Revenue Agency (CRA) and Revenu Québec (RQ) must ensure that each individual
and organization is compliant and pays all of the amounts owing.</p>
<p>Both the CRA and RQ recognize that taxpayers and agents are entitled to plan their affairs so
that they pay only the amounts that are legally due. It is acceptable to take advantage of tax
rules to minimize the amount of taxes paid. It is not lawful, however, to evade taxes owed by
failing to report income, failing to remit taxes due or providing the CRA or RQ with false information.</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>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 id="the-employee-employer-relationship">

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# Sphinx build info version 1
# This file records the configuration used when building these files. When it is not found, a full rebuild will be done.
config: f0e98b651bd5a4f306a6ea3193f765e5
config: f34f1a9962ba88a5f711df83651a645a
tags: 62a1e7829a13fc7881b6498c52484ec0

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@@ -919,7 +919,7 @@ professional landscape.
</strong>
</p>
<p>
The following personal and professional skills will assist payroll practitioners in dealing with
The following personal and professional skills will assist payroll professionals in dealing with
the various stakeholders involved in the payroll process:
</p>
<blockquote>
@@ -959,8 +959,22 @@ the various stakeholders involved in the payroll process:
</strong>
</p>
<p>
Behaviour and ethics are two areas that build on the skills that an effective payroll practitioner
must have. Effective payroll professionals should be:
Professional behaviour and ethical conduct are critical components of an effective payroll practitioner&rsquo;s skill set. In this
role, individuals must demonstrate trustworthiness, given the constant potential for fraud. Attention to detail is essential,
making conscientiousness a valued trait.
</p>
<p>
Payroll professionals handle sensitive personal and financial data, so discretion is non-negotiable. They must also be
tactful when interacting with employees, particularly in conversations involving financial concerns, which may be emotionally
charged. Perceptiveness helps practitioners understand multiple perspectives in complex situations.
</p>
<p>
The ability to work under pressure is key, especially when managing absolute deadlines. Sound judgment and common sense allow
practitioners to identify problems quickly and implement effective solutions. Finally, maintaining objectivity and a factual
approach when responding to questions and inquiries ensures fair and consistent communication across the organization.
</p>
<p>
Effective payroll professionals should be:
</p>
<blockquote>
<div>
@@ -1017,10 +1031,10 @@ must have. Effective payroll professionals should be:
</a>
</h3>
<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.
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.
Stakeholders refer to the individuals, groups, and organizations&mdash;both within and outside the company&mdash;that have a vested
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
expectations.
</p>
<p>
Payroll management stakeholders are the federal and provincial/territorial governments, the
@@ -1037,10 +1051,9 @@ outsource/software vendors.
</a>
</h4>
<p>
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.
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
payroll-related laws.
</p>
<p>
Canada is ruled by a federal government with ten largely self-governing provinces and three
@@ -1049,8 +1062,8 @@ not only with the federal government legislation, but with the provincial and te
governments&rsquo; legislation as well.
</p>
<p>
As a result, payroll practitioners and their organizations are affected by the enactment of
legislation at both the federal and provincial/territorial level.
As a result, payroll departments are directly influenced by legislative developments at both the federal and provincial or
territorial levels, making ongoing legal awareness a critical component of payroll management.
</p>
<p>
The federal parliament has the power to make laws for the peace, order and good government
@@ -1205,10 +1218,15 @@ territories exists over:
</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.
Canada&rsquo;s division of authority between federal and provincial or territorial governments directly influences payroll
practices, particularly in relation to employment and labour standards. These standards are governed independently by
each province and territory, and outline key rules related to workplace conditions.
</p>
<p>
Among the issues addressed are hours of work, minimum wage, overtime eligibility, vacation entitlements, and termination pay.
Because each jurisdiction sets its own legislation, payroll practitioners must ensure compliance with the specific
requirements applicable to the location where the employee works. Navigating these variations is an essential aspect of
effective and lawful payroll administration.
</p>
<blockquote>
<div>
@@ -1248,9 +1266,11 @@ group of employees who fall under provincial/territorial legislation.
</a>
</h4>
<p>
Internal stakeholders are those individuals or departments closely related to the organization
that the payroll department is serving. This group includes employers, employees and other
departments in the organization.
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
compensation, employers who oversee workforce management, and other internal teams&mdash;such as human resources, finance,
and operations&mdash;that collaborate closely with payroll for data sharing, planning, and compliance. These stakeholders play a
direct role in shaping how payroll services are delivered and supported across the organization.
</p>
<p>
<strong>
@@ -1292,11 +1312,17 @@ information for budgeting, analytical and quality purposes.
</a>
</h4>
<p>
External stakeholders are organizations that are neither government nor internal stakeholders,
yet have a close working relationship with the payroll function. Compliance with external
stakeholder requirements is also a responsibility of the payroll department. In most cases,
compliance will require that payroll request a cheque from accounts payable and send it to
the external organization along with supporting documentation.
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
plan administrators, unions, and third-party service vendors. Although not formally part of the company or regulatory bodies,
their involvement directly impacts payroll operations.
</p>
<p>
Ensuring compliance with external stakeholder requirements is a key duty of the payroll department. This often includes
verifying data, meeting contractual obligations, and coordinating financial transactions. In many cases, payroll
professionals must initiate cheque requests through accounts payable and submit accompanying documentation to these
organizations to fulfill obligations accurately and on time. Maintaining strong communication and attention to detail with
external partners is essential for smooth and compliant payroll administration.
</p>
<p>
<strong>
@@ -1373,12 +1399,19 @@ regulations, can affect the operations of a payroll department, as the requireme
with the new or amended legislation must be satisfied.
</p>
<p>
Legislation determines what the rules are, while regulations determine how the rules are to be
It is important to note the difference between legislation and regulatio.
<strong>
Legislation
</strong>
determines what the rules are, while
<strong>
regulations
</strong>
determine how the rules are to be
applied.
</p>
<p>
The methods for calculating income tax deductions are specified by the federal government
through regulations.
The methods for calculating income tax deductions are specified by the federal government through regulations.
</p>
<blockquote>
<div>
@@ -1411,23 +1444,21 @@ through a calculation prescribed in the regulation within the Act.
</div>
</blockquote>
<p>
Legislative change can prove to be anything but routine, particularly if the change is
implemented at a time other than at the beginning of a calendar year, or involves some sort of
retroactivity. The change may involve a series of adjustments to individual payroll accounts
and extra work for the payroll department to finalize reconciliations and year-end balancing
requirements.
Legislative changes can present significant challenges for payroll departments, especially when implemented mid-year or
applied retroactively. These adjustments often require updates to individual payroll records, additional reconciliation
efforts, and revisions to year-end balancing procedures, placing extra demands on payroll professionals.
</p>
<p>
In general, legislation, and in particular, labour legislation, is constantly being changed,
amended, repealed or revised. As a result, it is essential to keep up-to-date with the changes
in the jurisdiction(s) in which your organization operates.
Labour legislation in particular is subject to frequent modifications, including amendments, repeals, and revisions.
Therefore, it is critical for payroll practitioners to remain informed about the laws and regulatory updates relevant to
each jurisdiction in which their organization operates.
</p>
<p>
Changes in legislation are generally publicized in the media. In large organizations, human
resource departments, tax specialists and corporate legal departments often provide this type
of information. However, in both large and small organizations, the payroll practitioner
should be proactive in keeping abreast of changes and bringing them to the attention of those
involved. There are many ways to keep informed of changes that impact payroll.
Legislative changes are typically communicated through public media. In larger organizations, updates may also be shared
internally by human resources, tax specialists, or legal departments. Regardless of the organization&rsquo;s size, payroll
professionals should take a proactive role in monitoring relevant developments and ensuring that all affected parties are
made aware of any changes. A variety of resources&mdash;such as government publications, industry newsletters, professional
associations, and online portals&mdash;can support this ongoing effort to stay informed and maintain compliance.
</p>
<p>
The following are some of the available resources:
@@ -1488,34 +1519,26 @@ involved. There are many ways to keep informed of changes that impact payroll.
</a>
</h4>
<p>
In addition to payroll&rsquo;s primary role of paying employees accurately and on time, payroll
practitioners are also directly or indirectly responsible for supporting and/or ensuring
compliance with the requirements of various government acts. Where legislation requires
employer compliance (for example, remittance of payroll source deductions, Canada Pension
Plan contributions, Employment Insurance premiums, and federal and provincial/territorial
income tax deductions) there are financial penalties or the possibility of legal action to
encourage compliance.
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
payroll source deductions, Canada Pension Plan contributions, Employment Insurance premiums, and both federal and
provincial/territorial income tax withholdings. When these obligations are not met, employers may face serious consequences,
including financial penalties or legal enforcement actions designed to ensure compliance.
</p>
<p>
Fines, penalties and interest charges are typically a result of audits and legal action. These
may result in seizure of bank accounts and/or assets, fines of $1,000 to $25,000, and in some
cases, jail sentences up to 12 months.
Penalties such as fines, interest charges, and legal sanctions often result from audits or investigations into
non-compliance. In more severe cases, enforcement measures may include seizure of bank accounts or assets, and fines.
</p>
<p>
Government departments and agencies responsible for administering legislation employ a
variety of systems for tracking compliance. Some systems, such as the monitoring of source
deduction remittances, are ongoing, with regimented reporting time frames that lay down a
continual audit trail. Failure to meet the requirements of this legislation will incur a rapid
response that may result in fines and penalties.
To monitor and enforce these requirements, government agencies utilize a range of tracking systems. Some, such as those
used to oversee source deduction remittances, rely on strict reporting schedules that create a consistent audit trail.
Failure to meet these time-sensitive obligations typically triggers a swift response and the imposition of penalties.
</p>
<p>
Reporting requirements that do not involve ongoing, regular reporting may not impose an
immediate fine but may initiate a visit from an auditor or other official seeking compliance.
</p>
<p>
Some compliance systems operate quarterly or annually, and the observations raised by these
systems will result in requests for additional information or explanation and, in some cases, a
request for a supplementary payment and/or a fine.
For reporting requirements that are less frequent or ongoing, the consequences of non-compliance may not be immediate.
However, they can lead to scrutiny from auditors or other officials tasked with verifying that payroll practices align with
current legislative standards. Payroll professionals must remain vigilant and informed to protect their organization from
financial and legal risk.
</p>
<blockquote>
<div>
@@ -1546,19 +1569,13 @@ information slips issued at year-end to validate the amounts of CPP contribution
</a>
</h4>
<p>
Both the federal and provincial/territorial tax systems are based on the principle of selfassessment. This means that
taxpayers and their agents, including employers, are responsible for calculating, reporting and remitting their
contributions and the amounts withheld within the prescribed deadlines.
Both the federal and provincial/territorial tax systems in Canada operate on the principle of self-assessment. Under this system, taxpayers and their representatives&mdash;including employers&mdash;are responsible for accurately calculating, reporting, and remitting taxes and other required contributions by the prescribed deadlines.
</p>
<p>
As administrators of the tax system, the Canada Revenue Agency (CRA) and Revenu Qu&eacute;bec (RQ) must ensure that each individual
and organization is compliant and pays all of the amounts owing.
The Canada Revenue Agency (CRA) and Revenu Qu&eacute;bec (RQ) serve as administrators of these systems, ensuring that individuals and organizations remain compliant and that all amounts owed are properly paid.
</p>
<p>
Both the CRA and RQ recognize that taxpayers and agents are entitled to plan their affairs so
that they pay only the amounts that are legally due. It is acceptable to take advantage of tax
rules to minimize the amount of taxes paid. It is not lawful, however, to evade taxes owed by
failing to report income, failing to remit taxes due or providing the CRA or RQ with false information.
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&mdash;such as failing to report income, neglecting to remit amounts due, or submitting false information&mdash;is strictly prohibited and subject to enforcement actions.
</p>
</section>
</section>