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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: eb97ac1fe9d57cc51fff73ec7ec39953
tags: 645f666f9bcd5a90fca523b33c5a78b7

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.. |trial_balance| replace:: :math:`\Sigma \text{ Total Debits} = \Sigma \text{ Total Credits}`
.. |accounting_equation| replace:: :math:`\text{Assets} = \text{Liabilities} + \text{Equity}`
##################
Payroll Accounting
##################
***************
Journal Entries
***************
Accounting Recap
-----------------
.. centered:: |trial_balance|
.. centered:: |accounting_equation|
.. math:: Assets = Liabilities + Equity
:label: AccountingEquation
Furthermore, we know that:
.. centered:: :math:`\text{Equity = Revenue - Expenses}`
, which leads us to:
.. centered:: :math:`\text{Assets = Liabilities + (Revenues - Expenses)}`
Accounting equation :math:numref:`AccountingEquation`
Payroll accounting is a critical component of the Canadian Payroll Administration system. It involves the systematic recording, analysis, and reporting of payroll transactions to ensure that all financial aspects of employee compensation are accurately reflected in the organization's financial statements.
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.
Journal Entries
-----------------
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.
| DR Payroll Expenses $10,500.00
| CR Payroll Payable $10,500.00

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######################
PREFACE
######################
Through this material, students will gain a comprehensive understanding of core payroll principles and practices. They will explore legislative compliance requirements and the role of key regulatory bodies that govern payroll operations in Canada.
Students will learn how to:
- Accurately calculate net pay for salaried, hourly, commissioned, and contract employees.
- Identify and meet payroll-related obligations for businesses.
- Navigate the administrative aspects of human resource management that intersect with payroll responsibilities.
- Apply payroll procedures using computerized payroll software through practical, hands-on exercises.
- Payroll's responsibilities from hiring through to termination.
- Payroll compliance legislation in practical scenarios.
- Individual pay calculation process.
Learning Outcomes
******************
The material of this study guide aim to make students to be be able to:
- Calculate regular individual pay
- Calculate non-regular individual pay
- Calculate termination payments
- Complete a Record of Employment (ROE)
- Apply federal and provincial legislation to payroll, including:
- The Canada Pension Plan Act
- The Employment Insurance Act
- The Income Tax Act
- Employment Standards legislation
- Workers' Compensation Acts
- Québec-specific legislation
Recommended Course Material
****************************
Material Structure Overview
****************************
1. Introduction to Canadian Payroll
#. Labour and Employment Standards
#. Accounting for Payroll
#. Calculating Gross Pay
#. Pensionable, Insurable, and Taxable Earnings
#. Calculating Net Pay
#. Calculating Employer's Source Deduction Remittances
#. Termination of Employment:
- Record of Employment (ROE)
- Termination Payments
- Retirement Pay
In other words, the material covers the foundational knowledge and technical skills needed to confidently perform payroll tasks in a variety of employment settings.

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######################
RATES FOR 2025
######################
CANADA / QUEBEC PENSION PLAN (CPP / QPP)
------------------------------------------
.. csv-table:: CANADA / QUEBEC PENSION PLAN (CPP / QPP)
:header: "Description", "CPP", "QPP"
:widths: 130, 30, 30
:align: left
:file: rates/rates_cpp-qpp_2025.csv
:delim: ,
CPP2 CONTRIBUTION RATES MAXIMUMS
------------------------------------------
.. csv-table:: CPP2 Contribution Rates Maximums
:header: "Description", "Ammount"
:widths: 130, 30
:align: left
:file: rates/rates_cpp2_2025.csv
:delim: ,
References
----------
`CPP Maximum contributory earnings <https://laws-lois.justice.gc.ca/eng/acts/C-8/page-5.html#docCont>`_
`Second additional CPP contributions <https://laws-lois.justice.gc.ca/eng/acts/C-8/page-3.html#docCont>`_
.. comment
"Yearly maximum pensionable earnings", "$66,600", "$66,600"
"Annual maximum contributory earnings", "$66,600", "$66,600"
"Annual maximum contribution", "$3,754.45", "$3,754.45"
"Employee contribution rate", "5.95%", "5.95%"
"Employer contribution rate", "5.95%", "5.95%"
"Maximum pensionable earnings", "$66,600", "$66,600"
"Basic exemption (Annual)", "$3,500", "$3,500"
" Basic exemption (Monthly, 12)", "$291.67", "$291.67"
" Basic exemption (Weekly, 52)", "$673.08", "$673.08"
" Basic exemption (Weekly, 53)", "$634.91", "$634.91"
" Basic exemption (Semi-monthly, 24)", "$1,250.00", "$1,250.00"
" Basic exemption (Bi-weekly, 26)", "$1,346.15", "$1,346.15"
"Maximum contribution", "$3,754.45", "$3,754.45"

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##########
REFERENCES
##########

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==================
REVIEW QUESTIONS
==================
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.
************************
New Employee Information
************************
Which one of the following is correct?
a. Choice A
b. Choice B
c. Choice C

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# Sphinx inventory version 2
# Project: Payroll Administration
# Version: 2025-06
# The remainder of this file is compressed using zlib.
<EFBFBD><EFBFBD>N<EFBFBD>0<14><><EFBFBD>}<01>.<2E><>;<3B>u<EFBFBD><75>Q,<2C><><EFBFBD>t帑t-<2D><><EFBFBD><EFBFBD><EFBFBD><EFBFBD>
pK<EFBFBD>k<EFBFBD>s<EFBFBD><EFBFBD><EFBFBD><EFBFBD><EFBFBD><EFBFBD><EFBFBD><EFBFBD><EFBFBD><EFBFBD>- -<2D><>=<3D>Gr<47><72><07><>9<EFBFBD>R<EFBFBD><52> <0E>tMc<><63><EFBFBD>vO|;1F<31>sUtO<74><4F>T<>

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<section id="payroll-accounting">
<h1><span class="section-number">3. </span>Payroll Accounting<a class="headerlink" href="#payroll-accounting" title="Link to this heading"></a></h1>
<section id="journal-entries">
<h2><span class="section-number">3.1. </span>Journal Entries<a class="headerlink" href="#journal-entries" title="Link to this heading"></a></h2>
<section id="accounting-recap">
<h3><span class="section-number">3.1.1. </span>Accounting Recap<a class="headerlink" href="#accounting-recap" title="Link to this heading"></a></h3>
<p class="centered">
<strong><img class="math" src="_images/math/3fa11f8e69bcb5e9be2df6754a5e4f614450b91c.png" alt="\Sigma \text{ Total Debits} = \Sigma \text{ Total Credits}" style="vertical-align: 0px"/></strong></p><p class="centered">
<strong><img class="math" src="_images/math/96afef116a3f4349b6cf21c73cca42773ed21927.png" alt="\text{Assets} = \text{Liabilities} + \text{Equity}" style="vertical-align: -4px"/></strong></p><div class="math" id="equation-accountingequation">
<p><span class="eqno">(1)<a class="headerlink" href="#equation-accountingequation" title="Link to this equation"></a></span><img src="_images/math/f8b2faa121474b0dd0e28fef8ac413a56b6313b2.png" alt="Assets = Liabilities + Equity"/></p>
</div><p>Furthermore, we know that:</p>
<p class="centered">
<strong><img class="math" src="_images/math/020e49c3f9c40699b77e19e0a2b684d246ea21bb.png" alt="\text{Equity = Revenue - Expenses}" style="vertical-align: -4px"/>
, which leads us to:</strong></p><p class="centered">
<strong><img class="math" src="_images/math/547c7611976b4041740caa3335735c193069bb84.png" alt="\text{Assets = Liabilities + (Revenues - Expenses)}" style="vertical-align: -5px"/></strong></p><p>Accounting equation <a class="reference internal" href="#equation-accountingequation">(1)</a></p>
<p>Payroll accounting is a critical component of the Canadian Payroll Administration system. It involves the systematic recording, analysis, and reporting of payroll transactions to ensure that all financial aspects of employee compensation are accurately reflected in the organizations financial statements.
Payroll accounting includes the management of employee wages, tax withholdings, benefit deductions, and other payroll-related expenses. The system is designed to automate these processes, ensuring accuracy and compliance with Canadian payroll regulations.</p>
</section>
<section id="id1">
<h3><span class="section-number">3.1.2. </span>Journal Entries<a class="headerlink" href="#id1" title="Link to this heading"></a></h3>
<p>Journal entries are a key part of payroll accounting, as they document the financial impact of payroll transactions on the organizations accounts. Each payroll run generates a series of journal entries that reflect the distribution of wages, taxes, and deductions across various accounts.
These entries are essential for maintaining accurate financial records and ensuring that the organizations financial statements reflect the true cost of employee compensation. The Canadian Payroll Administration system automates the generation of these journal entries, reducing the risk of errors and ensuring compliance with accounting standards.</p>
<div class="line-block">
<div class="line">DR Payroll Expenses $10,500.00</div>
<div class="line-block">
<div class="line">CR Payroll Payable $10,500.00</div>
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<li><a class="reference internal" href="#journal-entries">3.1. Journal Entries</a><ul>
<li><a class="reference internal" href="#accounting-recap">3.1.1. Accounting Recap</a></li>
<li><a class="reference internal" href="#id1">3.1.2. Journal Entries</a></li>
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<p>Through this material, students will gain a comprehensive understanding of core payroll principles and practices. They will explore legislative compliance requirements and the role of key regulatory bodies that govern payroll operations in Canada.</p>
<p>Students will learn how to:</p>
<ul class="simple">
<li><p>Accurately calculate net pay for salaried, hourly, commissioned, and contract employees.</p></li>
<li><p>Identify and meet payroll-related obligations for businesses.</p></li>
<li><p>Navigate the administrative aspects of human resource management that intersect with payroll responsibilities.</p></li>
<li><p>Apply payroll procedures using computerized payroll software through practical, hands-on exercises.</p></li>
<li><p>Payrolls responsibilities from hiring through to termination.</p></li>
<li><p>Payroll compliance legislation in practical scenarios.</p></li>
<li><p>Individual pay calculation process.</p></li>
</ul>
<section id="learning-outcomes">
<h2><span class="section-number">1.1. </span>Learning Outcomes<a class="headerlink" href="#learning-outcomes" title="Link to this heading"></a></h2>
<p>The material of this study guide aim to make students to be be able to:</p>
<ul class="simple">
<li><p>Calculate regular individual pay</p></li>
<li><p>Calculate non-regular individual pay</p></li>
<li><p>Calculate termination payments</p></li>
<li><p>Complete a Record of Employment (ROE)</p></li>
<li><p>Apply federal and provincial legislation to payroll, including:
- The Canada Pension Plan Act
- The Employment Insurance Act
- The Income Tax Act
- Employment Standards legislation
- Workers Compensation Acts
- Québec-specific legislation</p></li>
</ul>
</section>
<section id="recommended-course-material">
<h2><span class="section-number">1.2. </span>Recommended Course Material<a class="headerlink" href="#recommended-course-material" title="Link to this heading"></a></h2>
</section>
<section id="material-structure-overview">
<h2><span class="section-number">1.3. </span>Material Structure Overview<a class="headerlink" href="#material-structure-overview" title="Link to this heading"></a></h2>
<ol class="arabic simple">
<li><p>Introduction to Canadian Payroll</p></li>
<li><p>Labour and Employment Standards</p></li>
<li><p>Accounting for Payroll</p></li>
<li><p>Calculating Gross Pay</p></li>
<li><p>Pensionable, Insurable, and Taxable Earnings</p></li>
<li><p>Calculating Net Pay</p></li>
<li><p>Calculating Employers Source Deduction Remittances</p></li>
<li><p>Termination of Employment:</p>
<ul class="simple">
<li><p>Record of Employment (ROE)</p></li>
<li><p>Termination Payments</p></li>
<li><p>Retirement Pay</p></li>
</ul>
</li>
</ol>
<p>In other words, the material covers the foundational knowledge and technical skills needed to confidently perform payroll tasks in a variety of employment settings.</p>
</section>
</section>
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<li><a class="reference internal" href="#learning-outcomes">1.1. Learning Outcomes</a></li>
<li><a class="reference internal" href="#recommended-course-material">1.2. Recommended Course Material</a></li>
<li><a class="reference internal" href="#material-structure-overview">1.3. Material Structure Overview</a></li>
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<h1><span class="section-number">6. </span>RATES FOR 2025<a class="headerlink" href="#rates-for-2025" title="Link to this heading"></a></h1>
<section id="canada-quebec-pension-plan-cpp-qpp">
<h2><span class="section-number">6.1. </span>CANADA / QUEBEC PENSION PLAN (CPP / QPP)<a class="headerlink" href="#canada-quebec-pension-plan-cpp-qpp" title="Link to this heading"></a></h2>
<table class="docutils align-left" id="id1">
<caption><span class="caption-text">CANADA / QUEBEC PENSION PLAN (CPP / QPP)</span><a class="headerlink" href="#id1" title="Link to this table"></a></caption>
<colgroup>
<col style="width: 68.4%" />
<col style="width: 15.8%" />
<col style="width: 15.8%" />
</colgroup>
<thead>
<tr class="row-odd"><th class="head"><p>Description</p></th>
<th class="head"><p>CPP</p></th>
<th class="head"><p>QPP</p></th>
</tr>
</thead>
<tbody>
<tr class="row-even"><td><p>Yearly maximum pensionable earnings</p></td>
<td><p>$71,300</p></td>
<td><p>$</p></td>
</tr>
<tr class="row-odd"><td><p>Annual maximum contributory earnings</p></td>
<td><p>$67,800</p></td>
<td><p>$</p></td>
</tr>
<tr class="row-even"><td><p>Annual maximum contribution</p></td>
<td><p>$3,500</p></td>
<td><p>$</p></td>
</tr>
<tr class="row-odd"><td><p>Employee contribution rate</p></td>
<td><p>5.95%</p></td>
<td></td>
</tr>
<tr class="row-even"><td><p>Employer contribution rate</p></td>
<td><p>5.95%</p></td>
<td></td>
</tr>
<tr class="row-odd"><td><p>Basic exemption (Annual)</p></td>
<td><p>$3,500</p></td>
<td></td>
</tr>
<tr class="row-even"><td><blockquote>
<div><p>Basic exemption (Monthly, 12)</p>
</div></blockquote>
</td>
<td><p>$291.67</p></td>
<td><p>$</p></td>
</tr>
<tr class="row-odd"><td><blockquote>
<div><p>Basic exemption (Weekly, 52)</p>
</div></blockquote>
</td>
<td><p>$67.31</p></td>
<td><p>$</p></td>
</tr>
<tr class="row-even"><td><blockquote>
<div><p>Basic exemption (Weekly, 53)</p>
</div></blockquote>
</td>
<td><p>$66.04</p></td>
<td><p>$</p></td>
</tr>
<tr class="row-odd"><td><blockquote>
<div><p>Basic exemption (Semi-monthly, 24)</p>
</div></blockquote>
</td>
<td><p>$145.83</p></td>
<td><p>$</p></td>
</tr>
<tr class="row-even"><td><blockquote>
<div><p>Basic exemption (Bi-weekly, 26)</p>
</div></blockquote>
</td>
<td><p>$134.61</p></td>
<td><p>$</p></td>
</tr>
</tbody>
</table>
</section>
<section id="cpp2-contribution-rates-maximums">
<h2><span class="section-number">6.2. </span>CPP2 CONTRIBUTION RATES MAXIMUMS<a class="headerlink" href="#cpp2-contribution-rates-maximums" title="Link to this heading"></a></h2>
<table class="docutils align-left" id="id2">
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<colgroup>
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</colgroup>
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<td><p>$81,200</p></td>
</tr>
<tr class="row-odd"><td><p>Employee and employer contribution rate</p></td>
<td><p>4%</p></td>
</tr>
<tr class="row-even"><td><p>Maximum employee and employer contribution</p></td>
<td><p>$396</p></td>
</tr>
<tr class="row-odd"><td><p>Maimum annual self-employed contribution</p></td>
<td><p>$792</p></td>
</tr>
</tbody>
</table>
</section>
<section id="references">
<h2><span class="section-number">6.3. </span>References<a class="headerlink" href="#references" title="Link to this heading"></a></h2>
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