Understanding your paycheck

Alberta’s minimum wage increases to $11.20 October 1, 2015 minimum wage rates increase to keep pace with rising provincial incomes and the cost of living. Alberta’s general minimum wage increased to from $10.20 per hour October 2015. The liquor server minimum wage will rise to $10.70 from $9.20 per hour.

Payment of Earnings The Employment Standards Code requires that employees must be paid at least once a month. Employers may establish one or more pay periods for the calculation of wages and overtime pay owed to an employee. Wages, overtime pay and general holiday pay must be paid within 10 consecutive days after the end of each pay period. Employees may be paid in cash, by cheque or money order or by direct deposit, into an account of the employee’s choice, in any recognized financial institution.

At the end of each pay period, an employer must provide a statement of earnings or a pay stub showing the: regular and overtime hours of work; wage rate and overtime rate; earnings paid that show each component separately; deductions from earnings and the reason for each deduction; time off in lieu of payment of overtime; and statement period.

Understanding the tax deductions on your pay stub By law, an employer must deduct the following amounts from your employment earnings: Income tax Employee contributions to Employment Insurance (EI) Employee contributions to the Canada Pension Plan (CPP)

These deductions mean that the amount on your paycheque will be less than the total you earned. Your employer must withhold and remit these amounts directly to the Canada Revenue Agency (CRA). These deductions are reported on your T4, when you file your annual tax return.

Your pay stub will either be attached to your cheque or to a direct deposit statement. Gross pay – Your "gross" pay is the amount you make every week, every month or every hour before your employer deducts any income taxes, payroll taxes (EI and CPP) or other items. Net pay – Your “net” or “take home” pay is your gross pay, less all amounts deducted and remitted to CRA on your behalf by your employer.

Required deductions Income tax In Canada, we pay income tax at graduated rates. This means that the tax rate goes up as your income goes up. In addition to federal tax, you must also pay provincial tax, which varies by province.

The Basic Personal Amount Where you are at as a student…   Because of a tax credit called the basic personal amount, you do not pay federal income tax on the first $11,138 of taxable income you earn in 2014.

Canada Pension Plan (CPP) & Employment Insurance (EI) These programs are run by the federal government and participation is mandatory. You may benefit in the future by receiving payments from these programs. EI protects workers who become unemployed by paying out benefits to those who apply and qualify. CPP pays benefits to seniors who qualify. In addition to the amounts that are deducted from your pay, your employer also makes contributions to EI and CPP on your behalf.

Additional payroll deductions your employer may deduct additional items from your pay. For example, you may choose to participate in your company's: pension plan group insurance plan, or RRSP savings plan. Participation in these programs will reduce your net take- home pay if you opt-in to contribute or they are required.

LTD - a deduction for long term disability insurance Union Dues – fees paid for membership in a union Advance Earnings – deducted money that was received in advance of the pay cheque Overtime Earnings – pay received for working over 8 hours a day or 44 hours a week, whichever is greater. Except where overtime hours are accumulated under an overtime agreement, all overtime hours must be paid at the rate of at least 1.5 x the employee’s regular wage rate.

Vacations and Vacation Pay Except for employees who work in specified industries and professions, employees are entitled to vacations and vacation pay. Vacations and vacation pay entitlement is intended to ensure that employees have rest from work without loss of income each year. The basic entitlement to annual vacations is as follows: 2 weeks after each of the first 4 years of employment with pay, and 3 weeks after 5 consecutive years of employment with pay. vacation pay is 4% -6% of your wage. Because of the nature of employment in the construction industry, there is no requirement for construction employers to provide their employees with vacation time. However, they are entitled to vacation pay in an amount that is at least 6% of the employee’s wages. Vacations must be taken sometime in the 12 months after the employee becomes entitled to the vacation.

Eligibility for General Holiday Pay The basic criteria for general holiday pay eligibility are as follows: the employee must have worked for the employer for at least 30 working days in the year before the general holiday,   the employee must have worked their last scheduled shift before, and the first scheduled shift after, the holiday (note that employees will remain eligible if they have the employer’s permission to be absent for either or both of these shifts), and   the employee must not have refused to work on the general holiday when asked to do so. Because of the nature of employment in the construction industry, there is no requirement on construction employers to provide their employees with general holidays. They are, however, entitled to general holiday pay in an amount that is at least 3.6 per cent of their wage.