Category Archives: Payroll

Payroll taxes? Remittance? When do I have to file? Do I have to file with WCB (Worksafe)? Am I an employee or self-employed? If you have other questions, please feel free to submit them to us.

Be a Santa and not a Scrooge to your staff

T’is the time of year to thank your employees for their hard work and dedication.  You may do this with gifts and a holiday party.  As you want to be a Santa and not a Scrooge, it is important to plan the gifts and social event so that they are not considered taxable benefits according to the Income Tax Act and consequently included in your employees’ employment income for the year.

Here are some of the main points:
All cash or near-cash gifts (i.e. gift certificates or gift cards) are considered taxable benefits.
If an employee receives non-cash gifts during the year with a value of $500 or less, the non-cash gifts are not considered a taxable benefit. 
If the value of the non-cash gifts received by an employee during the year total $600, then the employee will be deemed to have received a taxable benefit of $100 ($600 less $500).
Holiday parties in which all employees are invited and cost $100 or less per person are not considered a taxable benefit. 
If the holiday party costs $200 per person, the entire cost of the holiday party is considered a taxable benefit.

September 15, 2016 B.C. minimum wage increase

The minimum wage in British Columbia increased today as follows:

General: $10.85 per hour

Liquor server: $9.60 per hour

Live-in home support worker: $108.50 per day or part day worked

For information on other the rate increases please refer to the Province’s minimum wage factsheet.

Are your employees’ tips subject to CPP and EI withholdings?

A recent Tax Court of Canada case revisited the topic of employee tips and whether the employer is responsible to withhold CPP and EI on the tip amount earned by employees.

If the employer controls the tip amount or controls the distribution of the tip, then CPP and EI should be withheld.  An employer is considered to have control in these situations:

  • The employer adds a mandatory service charge to a client’s bill to cover tips;
  • The employer adds a percentage to a client’s bill to cover tips;
  • Tips allocated to employees using a tip sharing formula determined by the employer;
  • Tips that an employer includes in his or her business income, later expenses and redistributes to employees in the form of pay;
  • Tips that the employees are required to turn over to their employer and are later distributed to the employees;
  • Cash tips that are deposited in the employer’s bank account and become the property of (or even commingled with the property of) the employer and subsequently paid out to the employees.

If the employee receives a tip directly from customers, then the employer is not responsible to withhold CPP and EI.  An employee is considered to receive direct tips in these situations:

  • A client leaves money on the table at the end of the meal and the server keeps the whole amount;
  • A client gives a tip directly to a bellhop, door person, car attendant, porter; etc.
  • Tips pooled and/or shared among employees in a manner determined by the employees (as opposed to the employer);
  • When paying the bill by credit card, a client includes an amount for a tip on the credit card and the employer returns the tip amount in cash to the employee;
  • When paying the bill by debit card, a client includes an amount for a tip and the employer returns the tip amount in cash to the employee;

Please visit the Canada Revenue Agency’s webpage on Tips and Gratuities for more information.

 

Making your CRA payments

Making your Canada Revenue Agency (CRA) payments online is convenient and easy.  Payments may be made by: online banking, debit card or credit card.

Visit: Canada.ca/payments for more information.CRA online payments second

Employment Insurance Tax Credit For Employers

In September 2014 Ottawa announced an Employment Insurance (EI) tax credit for employers.

Currently employees pay EI rates of $1.88 per $100 of earnings (up to a maximum of $913.68 for 2014). Employers pay the employee rate multiplied by 1.4.

For the 2015 and 2016 calendar years employers, who pay $15,000 or less in employer EI contributions in the year, will receive a tax credit of $0.39 per $100 of employee earnings.

Here is how the math works:

Currently on $100 of employee income an employer pays $2.63 in employer EI contributions ($100 times $1.88 times 1.4).

For the 2015 and 2016 calendar years on $100 of employee income an employer will pay (after the tax credit is received) $2.24 in employer EI contributions ($100 times 1.60% times 1.4).

The difference between the $2.63 and the $2.24 is $0.39.