1. Welcome Payroll Law in Canada (Ontario Specific)
Presented by
Pamela Shull
Disclaimer:
All information provided is from Canada Revenue Agency and Canada Labour Department.
Confer with your tax and legal counsel for specific information pertinent to your company.

2. Download Today’s Presentation
Type in
“Shull Canada Ontario Payroll Law Updated 2016”

3. WB - 1
Objectives
Understand the basics of major federal and provincial laws regarding tax withholding and reporting
Comprehend basic labour and employment standards that affect payroll processing
Undertake payroll document record retention
Audit-proof your documentation
Know the steps for special situations that can incur penalties, interest and fines
Apply critical, need-to-know legal mandates that protect your organization

4. Who Does What? Payroll Compensation Withholdings A/P Goods/Supplies
Contractors
Payroll
Compensation
Withholdings
H/R
Administrating
Tracking
Disciplining

5. Federal? Provincial? Territorial?
Which law do you follow
Federal
Industries that are inter-provincial or inter-national in scope
Includes: banking, transportation, radio and television,
Provincial
Trade unions, hours of work, work comp, paid vacations
Relationship between employer and employee
Territory
Under federal jurisdiction
Administered by Department of Indian and Northern Affairs and Northern Development

6. Federally Regulated Industries
Banks
Marine shipping, ferry and port services
Air transportation, including airports, aerodromes and airlines
Railway and road transportation that involves crossing provincial or international borders
Canals, pipelines, tunnels and bridges (crossing provincial borders)
Telephone, telegraph and cable systems
Radio and television broadcasting
Grain elevators, feed and seed mills
Uranium mining and processing
Businesses dealing with the protection of fisheries as a natural resource
Many First Nation activities
Most federal Crown corporations
Private businesses necessary to the operation of a federal act

7. Canadian Payroll Basics
WB - 2
Canadian Payroll Basics
Determine your status
Opening a payroll account
Hiring employees
Calculating compensation
Calculating deductions
Remitting deductions
Completing and filing information returns
Employer’s requirements
Payroll ‘s responsibilities

8. Website References and Resources
Canadian Master Labour Guide, pub. Lexis Nexis
Canadian Master Tax Guide, pub. CCH
Labour and Employment Issues
– for basic Employment Standards: type “Employment Standards” into search tool mechanism
- tools
Tax Issues
– use search tool for specific tax questions
- for specific payroll tax issues (T4001, T4130, T4032, T4044 Publications) 8 8

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Policies and Procedures Manual for Payroll
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16. Order Form

17. Recordkeeping for Employees and contractors? Pages 3 - 7
Section 1
Recordkeeping for Employees and contractors? Pages 3 - 7

18. Required Recordkeeping
WB-3 - 5
Required Recordkeeping
On all employees keep:
Hours worked by each employee
CPP contributions, EI premiums and taxes
Form TD1 (
Quėbec requires Form TP1015.3
Retention requirement
Taxes: Six years from the end of the last tax year to which they relate. Employment: determined by province/territory – typically 3 years.

20. Determine Worker Status
WB – 6 - 7
Determine Worker Status
Canada 4-point Test
Control
Ownership of tools/equipment
Chance of profit or risk of loss
Integration into the company
Behavioral
Financial Control and Financial Responsibility
Relationship of the parties

21. Recordkeeping Requirements
Contractor
Contract for services agreement or purchase order
Proof of business
Invoices
Tax Reports and deposits (T4A slips, if applicable)
Employee
Employment Contract of services or job description
TD1 or TP V
Time or tracking records
Payroll records of payments, withholdings, remittances, T4 slips

22. Labour law issues Pages 8 - 17
Section 2
Labour law issues Pages

23. WB-8
Minimum Wage - Ontario
Currently:
$11.25 per hour
Student: $10.55
Liquor Servers: $9.80
If minimum wage changes it is announced April 1 and goes into effect October 1 ($11.40 – Oct 1, 2016).
Student Wage: applies to students under the age of 18 who work 28 hours or less when school is in session or work during a recognized break (e.g. summer break)

24. WB-8
Minimum Wage - Federal
Currently:
$7.50
Minimum wage rate applicable in regards to employees under federal jurisdiction is the general adult minimum wage rate of the province or territory where the employee is usually employed

25. Minimum Wage – By Province
Other Information
Alberta
11.20
Adjusted annually – $12.20 Oct 1 – Salaried exempt $486 – liquor server abolished
British Columbia
10.85
Adjusted Sept 15 of each year
Manitoba
11.00
New Brunswick
10.65
Newfoundland/Labrador
10.50
Northwest Territories
12.50
Adjusted annually on Jun 1
Nova Scotia
10.70
Adjusted annual on April 1
Nunavut
13.00
Ontario
11.25
$11.40 October 1
Prince Edward Island
10.75
October 1 - $11.00
Québec
Saskatchewan
$10.72 Oct 1
Yukon
11.07
Adjusted annually on Apr 1

26. Who Is Allowed To Be Salaried Without Overtime (exempt)?
WB-9
Managers, superintendents, and employees who carry out management functions are exempted from hourly remuneration (50% rule applies).
Architects, dentists, engineers, lawyers, and medical doctors are also excluded.
Special hours of work regulations in several industries exempt or set different standards for certain employees.

27. Special Exemption Industries - Ontario
EMS, Healthcare and Health Professionals
Manufacturing, Construction, Mining
Hospitality Services, Sales
Transportation
Agriculture, Growing, Breeding, Keeping, and Fishing
Household, Landscaping and Residential Building Services
Government

28. Non-Management Duties
Clerical, manual labour
Routine, repetitive, directed-type work
Front line workers
Support staff

29. Salaried – Fixed – Ontario
Employee is paid salaried but does not qualify for overtime exemption.
Employee’s hours of work change from day to day but their weekly pay stays the same.
Employee salary is for all non-overtime hours up to 44.
Sharon’s salary is $500 per week. One week she works 50 hours.
$500 ÷ 44 = $11.36
$11.36 x 1½ = $17.04
$17.04 x 6 = $102.24
$500 + $ = $602.24

30. Salaried – Fluctuating - Ontario
Employee is paid salaried but does not qualify for overtime exemption.
Employee has set hours and a salary that is adjusted for variations in the set hours.
Employee is hired on the understanding that they will be paid $450 per week for 40 hours. Salary is adjusted when they work more or less than hours hired for.
Sharon’s salary is $450 per week. One week she works 50 hours.
$450 ÷ 40 = $11.25
$11.25 x 44 = $495.00
$11.25 x 1½ = $16.88
$16.88 x 6 = $101.28
$ $ = $596.28 30

31. Federal Hours of Work Rules
WB-10
Minimum 3 hour
Overtime: after 8 in a day or 40 in a workweek
Averaging allowed
Lieu time allowed
Meal period – 30 minutes after 5 consecutive hours of work

32. Ontario Hours of Work Rules
WB-10
Minimum 3 hours
Overtime paid after 44
Averaging allowed upon approval (3 years)
Must be part of a “posted” schedule
Meal period
30 minutes for 5 consecutive hours of work
Rest periods
11 consecutive hours free per day
24 consecutive hours in every work week
48 consecutive hours in every period of two consecutive work weeks

33. Minimum 3 Hour Rule – Ontario
When an employee is required to report to work for a shift of 3 hours or longer but works less than 3 hours, they must be paid whichever of the following amounts is the highest:
3 hours at minimum wage or the employee’s regular wage for the time worked
Exceptions to the rule:
Students
Employees whose regular shift is 3 hours or less
Where the cause of the employee not being able to work at least 3 hours was beyond the employer’s control.

34. WB-10
Minimum 3 Hour Rule
Employees scheduled to work must receive a minimum of $33.75 for showing up for work regular pay for total hours worked – whichever is higher
Example: Employee is paid $12 an hour. After 2 hours of work is sent home. Employee must be paid $33.75 because $12 times 2 hours is only $24.00.
Example: Employee is paid $20 an hour. After 2 hours of work employee is sent home. Employee must be paid $40.00 ($20 times 2) because it is higher than the minimum call-out pay of $33.75

35. Averaging
With Averaging Agreement – hours of work to be averaged over a period of one, two, three or four weeks.
Employees may agree to work up to 48 hours in a week, without being paid overtime
Employers may schedule 4 days at 11 hours a day - requires Director approval.
RULES:
Be in writing
Specify work schedule for each day
Be signed by employer and employee before start date
Be approved by the Director of Labour Standards

36. Lieu Time - Ontario Must have agreements with employees
WB-11
Must have agreements with employees
Allowed to take the time off within 3 months of time worked unless otherwise approved by Director of Labour Standards
Must be banked at time and a half for all hours worked over 44 in a workweek or by averaging agreement
Recordkeeping must accurately depict worked hours, accounting for the hours and when the hours were taken subsequently
Canadian Master Labour Guide, 6305

37. Lieu/Banked Time Rules
Examples of the requirement to use up banked time within 3 months of the end of the pay period are as follows:
Overtime Worked
Pay Period Ends
Banked Time To Be Taken By
June 1
June 30
September 30
August 11
August 12
November 12
September 15
December 15

38. Lieu Time Bank 4 worked – 6 banked Pay Cycle of Hours Worked Over 44
Straight Time
Hours
Overtime Hours
Value
Date Pay or Taken By
1/15/15 5
$100.00
Determined by agreement
1/31/15
4 worked – 6 banked
$120.00
4/30/15
Employee’s rate of pay is $20 per hour.
Employee normally works 35 hours per week.
Pay cycle for 1/15 employee worked 40 hours. Wanted to bank lieu time.
Pay cycle for 1/31 employee worked 48 hours. Wanted to bank lieu time.

39. Training Time - Ontario
Time spent by an employee in training that is required by the employer or by law is counted as work time. For example, where the training is required because the employee is a new employee or where it is required as a condition of continued employment in a position, the training time is considered to be work time.
Time spent in training that is not required by the employer or by law in order for an employee to do his or her job is not counted as work time. For example, where an employee hoping for a promotion with the employer takes training in order to qualify for it, time spent taking the training is not considered to be work time.

40. Travel Time - Ontario
Commuting time is the time it takes an employee to get to work from home and vice-versa. This is not counted as work time for the purposes of the ESA.
However, there are a number of exceptions to this rule.
If the employee takes a work vehicle home in the evening for the convenience of the employer, the work time begins when the employee leaves home in the morning and ends when he or she arrives home in the evening.
If the employee is required to transport other staff or supplies to or from the workplace or work site, time so spent must be counted as work time.
If the employee has a usual workplace but is required to travel to another location to perform work, the time traveling to and from that other location is counted as work time.
Time spent travelling during the course of the workday is considered to be work time.

41. Wage Calculation for Commissions
If an employee’s pay is based completely or partly on commission, it must amount to at least the minimum wage for each hour the employee has worked:
Lisa works on commission and has a weekly pay period. One week in April she earned $150 in commission and worked 25 hours. The minimum wage applicable is $11.25 an hour.
25 x $11.25 = $281.25
$ $150 = $131.25
Employer owes Lisa the commission plus the difference for the hours worked.

42. Federal Stat Holidays New Year's Day Good Friday Victoria Day
WB-12-13
New Year's Day
Good Friday
Victoria Day
Canada Day
Labour Day
Thanksgiving Day
Remembrance Day
Christmas Day
Boxing Day (December 26).

43. STAT Holidays In Ontario
WB-12-13
New Year's Day
Family Day
Good Friday
Victoria Day
Canada Day
Labour Day
Thanksgiving Day
Christmas Day
Boxing Day (December 26).

44. Holiday – Ontario If employee works on holiday:
WB – 12-13
Holiday – Ontario
If employee works on holiday:
1½ times regular rate plus regular wages or
Regular rate for hours worked and receive another day off with public holiday pay.
Length of Service Entitlement
Not specified
If holiday falls on non-working day
Employee can substitute another day off with pay or receive public holiday pay for the holiday

45. Wages Included In Stat Holiday
WB-12-13
When calculating public holiday pay, gross regular wages include:
Regular earnings
Commissions
Bonuses and gifts that are non-discretionary or that are related to hours of work, production or efficiency
Allowances for room and board

46. Wages NOT Included in Stat Holiday
WB-12-13
Do NOT include
Overtime pay, vacation pay, premium pay, termination pay and severance pay
Exception: vacation pay is included if:
On paid vacation during all or part of the 4 week calculating period or
Paid a lump sum vacation pay during 4 week calculation period or
Paid 4% or more vacation pay every cheque

47. Stat Holiday Pay Calculation
WB-12-13
Previous 4 weeks pay divided by 20 or
Previous 4 weeks employee received a total of $1600
$1600 / 20 = $80.00
If schedule does not change – regular daily pay
Regular schedule 8 hours at $11.00 per hour
$11 x 8 = $88.00

48. Stat Vacation Time and Pay
WB – 14 – Appendix
Eligibility: 1 year of service
Time: 2 weeks each year
Pay: 4% of annual wages
If an employee quits or his or her employment is terminated before he or she is able to take the vacation time, the employee must be paid 4% of the total gross wages earned up to that time, less any vacation pay already paid.
Gross wages include regular earned wages before deductions; as well as commissions, bonuses and gifts that are non-discretionary or that are related to hours of work, production or efficiency; allowances for room and board; overtime pay; public holiday pay; and termination pay.
If an employee has worked for less than 12 months before employment ended, and the employer did not pay vacation pay in every pay period, then the employee is owed 4% of his or her total gross wages at the end of employment.

49. Final Vacation Pay Calculation
An employee started employment on January 1, 2015 at a salary of $500 per week, earning a total of $26,000 in He earned 2 weeks of vacation time for 2015 plus 4% on the total gross wages, which equals $
If the employee takes 1 week of vacation with half of the vacation pay in February 2016 and quits on March 31, 2016 the employer still owes the employee $520 vacation pay earned in 2015, plus 4%of total gross wages earned between January 1 and March 31, 2016.

50. Sample Calculation Period for which vacation pay claimed
Gross Wages earned during this Period
Total Vacation Pay earned during this period
Total Vacation Pay paid for this period
***Total Vacation Pay Owing for this Period
Jan 1, 2015 – Dec 31, 2015
$26,000
$1040
$520
Jan 1, 2016 – Mar 31, 2016 (12 weeks regular pay)
$6,000
$ 240
$0.00
$240
Total Vacation Pay Owed
$760
***Total Vacation Pay Owing = Total Vacation Pay Earned – Total Vacation Paid

51. Sample Calculation -With Commission
Period for which vacation pay claimed
Gross Wages earned during this Period
Total Vacation Pay earned during this period
Total Vacation Pay paid for this period
***Total Vacation Pay Owing for this Period
Jan 1, 2015 – Dec 31, 2015
$26,000 + $10,000 comm.
$1440
$720
Jan 1, 2016 – Mar 31, 2016 (12 weeks regular pay)
$6,000+
$2,000 comm.
$ 320
$0.00
$320
Total Vacation Pay Owed
$1040
***Total Vacation Pay Owing = Total Vacation Pay Earned – Total Vacation Paid

52. Pregnancy, Maternity and Parental Leave
WB-15
Pregnancy, Maternity and Parental Leave
Federal
17 weeks for maternity leave
37 weeks for parental and adoption leave
Provinces and Territories can set a different limit
See chart in workbook for your specific province

53. Maternity/Parental Leave - Ontario
WB – 15
Maternity/Parental Leave - Ontario
Pregnancy
Qualifying period – 13 weeks prior to estimated delivery date
Length of leave – 17 weeks
Extension – 6 weeks
Seniority/Benefits – included
Parental
Qualifying period – 13 weeks
Length of leave – 37 weeks, 35 weeks if pregnancy leave is taken

54. Emergency Leave - Ontario
WB – 16
Emergency Leave - Ontario
Applies to employers with 50+ workers
10 days’ unpaid leave each calendar year

55. Family Medical Leave (Compassionate Care Leave)
WB-16
Policy and Procedures
Up to 8 weeks to provide care or support to family member for serious medical condition with significant risk of death within 26 weeks
Medical certificate required within 15 days after employee’s return to work
Employees under federal jurisdiction entitled to take FML regardless of length of service
Cannot suspend, discipline, terminate, lay-off, or demote an employee for taking FML
Must be reinstated to former position, salary and benefits

56. Changes to Compassionate Care Leave - Federal
January 3, 2016: Duration of compassionate care leave extended
Compassionate care leave has been extended for Canadians working in the federal jurisdiction who provide care or support for a family member, who has a serious medical condition with a significant risk of death within 26 weeks as certified by a qualified medical practitioner.
Specifically, the maximum duration of unpaid compassionate care leave has been extended to 28 weeks, from the previous 8-week period. Further, the period during which benefits can be taken is expanded to 52 weeks (up from 26 weeks).
The employee’s job is protected while taking this leave. Individuals may be eligible to receive compassionate care benefits under the Employment Insurance Program.

57. Family Caregivers Bill Act – April 29, 2014
The newest legislation -- the sixteenth government bill to pass since February builds on the existing Family Medical Leave by creating three new job-protected leaves:
Family Caregiver Leave: up to eight weeks of unpaid, job-protected leave for employees to provide care or support to a family member with a serious medical condition.
Critically Ill Child Care Leave: up to 37 weeks of unpaid, job-protected leave to provide care to a critically ill child.
Crime-Related Child Death or Disappearance Leave: up to 52 weeks of unpaid, job-protected leave for parents of a missing child and up to 104 weeks of unpaid, job-protected leave for parents of a child who has died as a result of a crime.

58. Required Notice/Pay by Employer
WB – 17
Termination Chart*
Length of Service
Required Notice/Pay by Employer
Less than 1 year
1 week
1 year to less than 3 years
2 weeks
3 yrs to less than 4 yrs
3 weeks
4 yrs to less than 5 years
4 weeks
5 yrs to less than 6 years
5 weeks
6 years to less than 7 yrs
6 weeks
7 years to less than 8 yrs
7 weeks
8 years or more
8 weeks
*Does not include severance

59. Payment of Wages on Termination - Ontario
Within 7 days of date of termination, or
By the day that would have been the employee’s next pay day
Must provide written statement of wages
Amount of gross vacation pay and gross termination or severance pay along with how amounts were calculated

60. Taxable or nontaxable Pages 18 - 24
Section 3
Taxable or nontaxable Pages

61. Deductions From Pay Allowed
Lawful deductions include:
Statutory deductions (income tax, CPP, EI)
Court ordered deductions (for example, garnishment)
Those that provide a benefit to employees (for example, health plans)
Charges for board and lodging as authorized by the Minimum Wage Orders
Recovery of pay advances and overpayments
Deductions for employee purchases from the employer's business on account, if there is a clear agreement between the employee and the employer that these can be deducted
Deductions for dry cleaning of woolen or other heavy material uniforms
These deductions can be made even if they bring the employee’s wages below the minimum wage.

62. Deductions From Pay Other Deductions:
Some employers make deductions from employees' pay for losses, shortages, damage, etc. Also some employers may make deductions for employee debts that are not for purchases on account.
These deductions: must not take the employee's gross pay below minimum wage
must be authorized by a clear agreement between the employer and the employee. Deductions are authorized by the employee when there is a written agreement or when the employee has acted in a way that shows that s/he accepts the deduction

63. Written Authorization for Deductions
we recommend that employers use written authorizations for all such deductions
if the deduction is for losses incurred while the employee is working, it must be supported by a written authorization by the employee. The authorization should be made in advance, ideally when the employee is hired. Authorizations made after the loss occurs will be open to challenge. The authorization should specify the kind and amount of deductions that will be made. It should be dated and signed by the employee
if the deduction is for losses caused by customers leaving the employer's business without paying for the purchase of goods or services, the employer must be able to show that the loss is the fault of the employee

64. Deductions From Wages
Only under certain circumstances may an employer make deductions from an employee’s wages. Deductions from wages are not allowed for a cash shortage, or lost or stolen property if a person other than the employee had control over or access to the cash or property.
For example, an employer cannot deduct wages from an employee working at a gas station because someone leaves without paying the bill after pumping gas for their car. Check our resources below for a complete explanation.

65. Withholdings: Taxable vs. Nontaxable
WB – 18
Withholdings: Taxable vs. Nontaxable
Government regulated withholdings:
Employment Insurance (EI)
Canada Pension Plan (CPP)
Quėbec Pension Plan (QPP)
Federal and Provincial Income Taxes
The courts can regulate
Garnishments
Maintenance Orders for Support

66. Service Canada Website
WB – 19
Service Canada Website
Use it to file
ROE (Record of Employment)
Report on Hirings
The Report on Hirings (ROH) program is a voluntary verification program that allows employers to submit the Social Insurance Number and the first day worked for newly hired or recalled employees to Service Canada each month using a secure online application.
You will benefit from ROH if you:
have a high turnover in staff;
do a lot of hiring over the course of an average year; and
complete several Records of Employment (ROEs) over the course of an average year.

67. What’s New For Payroll
Employers can now request to transfer a misallocated credit within a payroll program account or from a payroll program account to another program account. They can also request a payment search for a payment that has been made but has not been credited to the account. For more information, go to My Business Account on CRA website.
New income code for the T4 slip
Code 88, Indian (exempt income) – Self-employment, is a new income code that was created for the Other information area of the T4 slip. Use this new code to report tax‑exempt self‑employment income paid to an Indian who is a fisher, barber or hairdresser, taxi driver or driver of other passenger carrying vehicles.

68. What’s New For Payroll New income codes for the T4A slip
New income codes have been created for the Other information area of the T4A slip:
Code 136, Federal Income Support for Parents of Murdered or Missing Children grant (PMMC);
Code 162, Pre-1990 past service contributions while not a contributor;
Code 194, Pooled registered pension plan (PRPP) annuity payments from taxable income;
Code 195, Indian (exempt income) – PRPP payments.

69. What’s New for Payroll Mandatory electronic filing
As of January 1, 2016, if you file more than 50 information returns for a calendar year and you do not file the returns by Internet file transfer or Web Forms, you may have to pay a penalty. For more information see Penalty for failure to file information returns over the Internet.
Guides for T4032, T4008 and T4127 for 2016 are available online at

70. CPP Regulations – Older Workers
Overview of the changes
All workers aged 60 to 65 have to make CPP contributions—even if they are receiving a CPP or Quebec Pension Plan (QPP) retirement pension.
Workers who are 65 to 70 years of age and who are receiving a CPP or QPP retirement pension have to contribute unless they have taken action to stop their CPP contributions. By continuing to contribute (which can be done up to and including the month they reach 70 years of age), they will receive more benefits by way of the new post-retirement benefit (PRB). For more information on the PRB and other changes to CPP benefits, go to  .

71. CPP Regulations (Continued)
To stop contributing to the CPP, workers have to be at least 65 years of age and receiving a CPP or QPP retirement pension. They must do the following:
Employees (who may also have self-employment income) have to complete Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election, send the original form to the Canada Revenue Agency (CRA), and give a copy to their employer. The change will take effect on the first day of the month after the employee gives the form to their employer.
Self-employed workers must complete Schedule 8, CPP Contributions on Self-Employment and Other Earnings, when they file their income tax and benefit return. The change will be effective on the first day of the month referenced in Schedule 8

72. CPP and EI Rates - 2016 CPP $54,900 $3,500 $51,400 4.95% $2,544.30
CPP or EI
Maximum annual earnings
Basic exemption amt
Maximum contributory earnings
EE and ER %
Maximum annual EE and ER contribution
Maximum annual self-employed contribution
CPP
$54,900
$3,500
$51,400
4.95%
$2,544.30 $ EI
$50,800
EE-Premium rate 1.88%
ER – your share x1.4*
*rate can be different under certain circumstances
EE - $955.04
ER - $

73. Gifts Tangible Property or Gift Card or Cash
WB – 21
 Tangible Property or Gift Card or Cash
A gift (either in cash or in kind) from an employer to an employee is a benefit derived during or because of the individual's employment.
A gift has to be for a special occasion such as Christmas gift, birth of a child, marriage, etc.
An employee can receive unlimited number of tangible property gifts with a value up to $500 on a nontaxable basis. Anything over $500 cumulative for the year will be taxable. Example: Employee receives $650 in tangible property gifts. $150 is taxable.
Cash and near-cash are taxable (special rules apply)

74. WB – 21-22
Awards vs. Reward
Award - Must be given for an employment-related accomplishment to be nontaxable
Outstanding service, employees’ suggestions, or meeting or exceeding safety standards.
It must be recognition of an employee’s overall contribution to the workplace –not recognition of job performance.
Reward – given to employee for performance-related reasons - taxable

75. Awards Must be employment-related accomplishment.
Long-service award rules:
Value up to $500 – tangible property only - non-taxable
Must be for a minimum of five years of service
Must be at least 5 years since you gave the employee the last long-service or anniversary award
Is not included in other gift or award benefits

76. Rules for Gift Cards for Gifts and Awards
Example 1: You give your employee a $100 gift card or gift certificate to a department store. The employee can use this to choose whatever merchandise or service the store offers.
Gift is taxable benefit because there is an element of choice.
Example 2: You give employee tickets to an event on a specific date and time.
Gift is non-taxable because there is no element of choice.

77. Prize Draws and Social Committees
WB – 22
Prize Draws and Social Committees
Taxable:
Item given to one employee by an employer via a prize draw
Item paid for by the employer and given via a draw to an employee of a high-performing team
Nontaxable (Unless otherwise specified)
Item paid for by a social committee and given via a draw
Committee must be entirely funded by the employee
If funded by employer – taxable
If funded by both – employer percentage is taxable – employee percentage is nontaxable.

78. Type of Remuneration
Taxable
Non-Taxable
Gift
Tangible Property
Gift Card
Cash
Over $500 per year
If there is an element of choice
yes
Up to $500 per year
There is no element of choice
Award
(Exception) Length of service tangible property - 5 year increments
Same as above
Up to $500 – separate from all other awards and gifts
Reward
Prize Drawings
From employer
Yes
From social committee
funded by employees
Funded by employer
Funded by both No
Based on percent

79. Automobile Allowance Personal use of company vehicle is taxable.
WB – 23
Automobile Allowance
Personal use of company vehicle is taxable.
Use “stand-by charge” method calculation (available on CRA website: pub. T4130.
Reasonable per-kilometre allowance - nontaxable
54₵ per kilometre for the first 5,000 kilometres driven and 48₵ per kilometres driven after that.
Each province sets their own governmental rate.
Flat rate allowance - taxable

80. Cellular Phone Service
Personal use of company cell phone is taxable
Employer has responsibility to determine FMV (fair market value) of personal use. Must justify calculations
Exception to the rule (all must apply):
The plan’s cost is reasonable
The plan is a basic plan with a fixed cost
Your employee’s personal use of the service does not result in charges that are ore than the basic plan cost.

81. Meal Allowances/Reimbursements – Business Travel Only
Detailed method
Price on receipts
Simplified method
$17 per meal; not to exceed $51 per day
Documentary evidence required

82. Overtime Meals Overtime meals or allowances
The allowance or cost of the meal must be reasonable. Reasonable is up to $17.
For overtime purposes – must be for two or more hours of overtime right before or after scheduled hours of work
Overtime must occur no more than 3 times a week

83. Internet Service
When employer provides internet service for employee for home use – the fair market value of the service for business use must be calculated.
Employee should be taxed on FMV of personal use.

84. Education Benefits
Allowances for children – taxable (some exceptions apply)
Scholarships, busaries, tuition and training
Employment-related training – for benefit of employer – not taxable
Personal interest training – taxable
Family member – post-secondary education – reported on T4A slip for the family member

85. Uniforms Non-taxable if the following conditions apply:
You supply your employee with a distinctive uniform he or she has to wear while carrying out the employment duties.
You provide your employee with special clothing designed to protect them from hazards associated with the employment.
Reimbursements with receipts for uniforms and safety gear is nontaxable.

86. Parking
Employer-provided parking is usually a taxable benefit for an employee, whether or not the employer owns the lot.
Exceptions to the rule:
The parking does not have a FMV
There are significantly fewer spaces than there are employees who want parking and the spaces are available on a first-come, first-served basis
There is no taxable benefit if you provide parking to your employee for business purposes and your employee regularly has to use his or her own automobile to do his or her duties.

87. Professional Membership Dues
If you pay professional membership dues for your employee and you are the primary beneficiary of the payment, there is no taxable benefit for the employee

88. Recreational Facilities and Club Dues
The use of a recreational facility or club is a taxable benefit if:
You pay, reimburse or subsidize the cost of
Membership to recreational facility
Membership to a business or professional club
Non-taxable benefit includes:
You provide an in-house recreational facility
You pay for a company membership at a facility and the employees are allowed to use company membership

89. Income Maintenance Plans (Wage Loss Plans)
Non-group plan(offered to individual employees)
Premium or contribution is taxable if the plan is:
A sickness or accident insurance plan
A disability insurance plan; or
An income maintenance insurance plan
Group plan (offered to group of employees)
A group sickness or accident insurance plan
Employee-pay-all plan
Group disability benefit – insolvent insurer (top up disability payment)

90. Airline Bonus Points Airline Bonus Points
Your employees may collect loyalty points, such as frequent flyer points or air miles, on their personal credit cards when travelling on business trips, even though you reimburse them for the amounts they spend. Usually, these points can be exchanged or cashed in for rewards (goods or services, including gift cards and certificates).

91. Airline Points Continued
Your employees do not have to include in their income the value of the rewards they received or enjoyed from the points they collect on these business trips, unless any of the following applies:
The points are converted to cash.
The plan or arrangement between you and the employee seems to be a form of additional remuneration.
The plan or arrangement is a form of tax avoidance.
If any of the conditions above are met, the employee has to declare the fair market value of any personal rewards he or she received on an income tax and benefit return.

92. Airline Points Continued
Exception to the rule:
If you control the points (such as when an employee uses a company credit card, you have to report on their T4 slip the fair market value of any personal rewards he or she received from redeeming the points.
You have to include any GST/HST that applies in the value of this benefit.

93. Example 1 Personal credit card - Taxable benefit
Pauline's employer allows her to use her personal credit cards whenever possible to pay for business expenses, which the employer then reimburses to her. To maximize the points earned, Pauline used her personal credit cards to pay for various employer business costs, including travel expenses of other employees.
CRA views this arrangement as a form of additional remuneration provided to Pauline. Pauline would not normally pay for employer business costs other than her own work-related expenses, incurred in the normal course of working. She would not normally cover the cost of business expenses of other employees. Pauline will have to calculate the fair market value of any personal reward she receives when she redeems the points. She will then have to declare the value as income on her income tax and benefit return.

94. Example 2 Company credit card points for benefit of the employee
Jennifer's employer has a company credit card, under which loyalty points are earned. Jennifer uses the card for employment-related purchases. The employer is billed, pays the credit card charges, and receives the loyalty point statement. The employer allows Jennifer to redeem the points for personal rewards. In this case, the fair market value of the goods or services received by Jennifer is a taxable employment benefit, as her employer controls the tracking and disbursement of the points. The employer has to report the value of the goods or services on her T4 slip in the year that the points are redeemed.
Alternately, if the employer did not control the tracking and redemption of the points, the value of any points redeemed by Jennifer for personal rewards would not have to be included on her T4 slip. Jennifer may have to declare the income on her income tax and benefit return.

95. Example 3 Personal loyalty points card - Non-taxable
Frank has a personal credit card he uses for both personal and work-related expenses. The card offers loyalty points which can be cashed in for travel rewards, but which cannot be redeemed for cash. Frank decides to redeem some of the points to take his family on vacation.
Since Frank controls the points, and this arrangement does not seem to be a form of additional remuneration, he does not have to include the value of the points earned from work-related expenses as income on his income tax and benefit return.

96. Group Term Life Insurance Policies – Employer Paid Premiums
Calculating the benefit:
If the premiums are paid regularly and the premium rate for each individual does not depend on age or gender, the benefit is:
The premiums payable for term insurance on the individual’s life - plus
The total of all sales taxes and excise tax that apply – minus
The premiums and any taxes the employee paid directly or through reimbursements to the employer
If taxable it is pensionable but not insurable

97. Private Insurance Premiums
Premiums under Private Health Services Plans
Where an employer makes a contribution to a private health services plan in respect of an employee, no taxable benefit arises to the employee.
Benefits provided to an employee under a private health services plan are not subject to tax in the employee's hands. "Private health services plan" is defined in subsection 248(1). (See also the current version of IT-339, "Meaning of Private Health Services Plan" and IT-85, "Health and Welfare Trusts for Employees".)

98. Private Insurance Premiums
Employer's Contribution under Provincial Hospitalization and Medical Care Insurance Plans
Where an employer is required, under a provincial hospital insurance plan, a provincial medical care insurance plan, or both, to pay amounts to the provincial authority administering such plan or plans (other than with respect to the contributions or premiums that an employee is required to make under the plan), the payment of such amounts does not give rise to a taxable benefit to employees.

99. When Are the Premiums Taxable?
Premiums under Provincial Hospitalization and Medical Care Insurance Plans
Where an employer pays all or a part of the premiums or contributions that an employee is otherwise required to pay to a provincial authority administering a provincial hospital insurance plan, a provincial medical care insurance plan, or both, the amount paid is a taxable benefit to the employee.
Where an employer pays an amount to an employee in respect of the employee's premium under a provincial hospital or provincial medical care insurance plan, the amount paid is a taxable benefit to the employee.

100. Health Spending Arrangements/Accounts (HSA)
Non Taxable as long as
Expenses are covered as outlined in IT-519
Taxable
If used for expenses not allowed in IT-519

101. RRSP (Registered Retirement Savings Plans)
Contributions the employer makes to an employee’s RRSP is a taxable benefit.
Administrative fees you pay are considered taxable and pensionable.
Do not deduct EI

102. Withholding Remitting
WB – 24-25
Withholding Remitting
What type of remitter are you?
Regular remitter
Quarterly remitter
Accelerated remitter
Remitting guidelines are based on amounts of withholdings to be remitted.

103. Penalties Incurred Through PIER
WB – 26
Penalties Incurred Through PIER
Penalties and Interest
Based on lateness of remittance
Failure to remit
Interest can be charged on unpaid penalties in addition to amounts owed
Interest in compounded daily from date remittance was first due or penalty was first assessed.

104. Garnishees in canada Page 27
Section 4
Garnishees in canada Page 27

105. Withholdings: Garnishees
WB – 27, Appendix 43-44
Withholdings: Garnishees
Types of Garnishees
Creditors
Tax garnishees from CRA (Canada Revenue Agency)
Child Support/Maintenance Orders

106. Creditor Garnishees Court ordered
Cannot terminate the employee for one garnishee
Fine: $1,000 or face imprisonment with a duration of one year.
Deduction controlled by federal and provincial laws

107. Tax Garnishees from CRA
Allowed without a court order
No limit
Usually last resort

108. Child Support/Maintenance Orders
Court may order be paid in periodic payments, lump sum or both
Limits are governed by federal and provincial law
Cannot terminate an employee for garnishee

109. YOUR COMPANY MAY BE HELD RESPONSIBLE FOR THE AMOUNTS YOU DIDN’T REMIT!
Employer Liability
If you receive a Requirement to Pay notice and you do not comply with the requirements:
YOUR COMPANY MAY BE HELD RESPONSIBLE FOR THE AMOUNTS YOU DIDN’T REMIT!

110. Special considerations Pages 28-30
Section 5
Special considerations Pages

111. Special Payroll Concerns
WB – 28
Special Payroll Concerns
Final Pay
Calculate the employee’s earnings and deductions for year to date
Give employee T4 slip
File government copy by the last day of February of the following year
Complete the Record of Employment (ROE)