New enhancements to the Thomson Reuters online payroll products
ANSWER: Yes. We are pleased to announce that our online payroll products will soon be given a makeover – with some exciting new features being added!
These new features will make it easier for you to find the information you need, perform complex calculations and contact us through the Payroll Hotline. The enhancements will also enable us to provide you with even more timely updates about important compliance-related developments.
The Canadian Payroll Manual products
ANSWER: You can access all compliance-related payroll information in the Canadian Payroll Manual (CPM), published by Thomson Reuters (formerly Carswell). The Canadian Payroll Manual is recognized as the definitive resource for payroll compliance in Canada. It is available in both print and online formats, as well as in both English and French (Manuel de paie canadien).
Subscribers to our print and online payroll products also have access to our innovative payroll hotline support, staffed by our team of highly experienced and credentialed Payroll Consultants.
As part of our ongoing commitment to product development and customer service, you will soon be able to connect with one of our payroll consultants instantly online and ask them your toughest payroll compliance questions.
Reporting Retiring Allowances on an ROE
ANSWER: Yes. When completing an ROE, you must report the full amount of a retiring allowance in block 17C (Other monies), even if all of the payment is eligible for tax-free transfer to a registered pension plan or an RRSP. However, since retiring allowances are not insurable earnings, do not include the payment in blocks 15B (Total Insurable Earnings) or 15C (Insurable Earnings by Pay Period).
Deadline for Giving Forms to Terminating Employees
ANSWER: There is no legislative requirement for employers to issue the two forms at the same time. The CRA does suggest, though, that employers give employees their T4s at the time of termination. Employers should not send the employee's T4 to the CRA until the end of February when they submit their T4 return. The employee's T4 must be part of the return.
If the employer must also provide the employee with an RL-1, Revenu Québec advises that it give the employee his or her copy of the form at the time of termination. Employers may use either an RL-1 or the temporary version of the slip, RL-1.T. If the slip for the current year is not yet available, Revenu Québec suggests using an RL-1 from the previous year by crossing out the year on the form and writing in the current year. Employers file their copy of the RL-1 with Revenu Québec when they submit their RL-1 return by the last day of February.
Service Canada requires employers who use paper ROEs to issue them within five calendar days of the first day an employee has an interruption of earnings or the day the employer becomes aware of the interruption. Give the employee Part 1 of the form.
For electronic ROEs (such as ROE Web), employers with weekly, bi-weekly or semi-monthly payroll cycles have up to five calendar days after the end of the pay period in which an employee has an interruption of earnings to submit an electronic ROE to Service Canada. Employers with payrolls that are monthly or every four weeks (i.e., 13 pay periods per year) must submit electronic ROEs either up to five calendar days after the end of the pay period in which the employee has an interruption of earnings or up to 15 calendar days after the first day of the interruption of earnings, whichever comes first. Employers who issue electronic ROEs are not required to provide a copy for the employee. As a courtesy, the employer may provide one if the employee requests it; however, the employer should advise the employee not to submit the paper copy to Service Canada.
How to Treat a Lump-sum Payment for a Terminating Employee
ANSWER: No. The money does not qualify as a retiring allowance because the individual’s continued participation in the company’s registered pension plan is indicative of an ongoing employer-employee relationship. For source deduction purposes, the payment is considered a salary continuance.
If you are paying the lump-sum payment with the employee’s regular pay, regular deductions apply for Canada/Quebec Pension Plan (C/QPP) contributions. If being paid separately, use the current fixed contribution percentage rate (4.95% for CPP for 2017 and 5.40% for QPP for 2017) to calculate C/QPP contributions, provided the employee has not reached the maximum C/QPP contribution for the year ($2,564.10 for CPP for 2017 and $2,797.20 for QPP for 2017).
To calculate Employment Insurance (EI) premiums, multiply the lump-sum payment by the current premium rate (for 2017, the rate is 1.63% for employees outside Quebec and 1.27% for employees in Quebec), provided that the employee has not reached the annual maximum for insurable earnings ($51,300 for 2017). If the employee is in Quebec, you must also calculate Quebec Parental Insurance Plan premiums by multiplying the lump-sum payment by the current premium rate (0.548% in 2017), provided that the employee has not reached the annual maximum for insurable earnings ($72,500 for 2017).
To calculate income tax deductions, use the manual tax calculation.
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Payroll Consultant Hotline- Now available by e-mail!
Your subscription includes free access to the Payroll Consultant Hotline, toll-free at 1-800-661-6828 (subscribers only)
You will now be able to contact our payroll consultants any time via e-mail at Carswell.PayrollHotline@thomsonreuters.com (or Carswell.PayrollHotline@tr.com) and receive a response to your payroll inquiries by the next business day.
This is in addition to our existing telephone Hotline support, which can be reached at 1-800-661-6828 or (416) 609-0152 in Toronto and internationally during regular business hours (Mon-Fri 8:30 am - 12:30 pm and 1:30 pm - 4:45 pm (EST)).