Canadian Payroll Reporter - sample

6 Canadian HR Reporter, a Thomson Reuters business 2019 News May 2019 Here is a look at some payroll- related announcements in bud- gets released up to the end of March: Manitoba: The Manitoba budget, which Finance Minister Scott Fielding tabled on March 7, proposes to lower the rate of the province's retail sales tax (RST) from eight per cent to seven on July 1. The RST applies to some tax- able benefits that employers provide to employees, includ- ing group term life insurance contracts for employees who are Manitoba residents. The previous government raised the rate to eight per cent in 2013 and planned to keep it there for 10 years before lower- ing it to seven per cent. Also announced: Beginning next year, all businesses that have to file, remit, and pay the prov- ince's Health and Post-Second- ary Education Tax Levy would have to do so electronically. The government levies the tax on remuneration that employers with a permanent establishment in the province pay to their em- ployees if their total annual pay- roll exceeds $1.25 million. For payrolls between $1.25 million and $2.5 million, the tax rate is 4.3 per cent on the amount over $1.25 million. For payrolls over $2.5 million, the rate is 2.15 per cent on total payroll. Quebec: The Quebec budget, which Fi- nance Minister Eric Girard re- leased on March 21, did not pro- pose any rate changes affecting the Quebec Pension Plan (QPP), Quebec Parental Insurance Plan (QPIP), or personal income tax deductions, but it did include some payroll-related measures. One proposal would reduce the amount of payroll taxes that small- and mid-size businesses (SMBs) pay if they employ older workers, beginning this year. The reduction would come in the form of a refundable tax credit to foster the retention of experienced workers and would apply to Quebec payroll taxes that an SMB pays in relation to workers 60 years and older. Payroll taxes include employer contributions to the QPP, QPIP, Health Services Fund (HSF), and the labour standards levy. The proposal would apply to SMBs in all economic sec- tors that meet the main eligibil- ity conditions for the province's small business deduction. The rate of the refundable tax credit would vary, based on the em- ployee's age and the SMB's total payroll. An employer's total payroll would be calculated in the same way that it is for the HSF con- tribution, and the same payroll thresholds that apply for deter- mining the HSF rate would apply to the proposed refundable tax credit. As a result, the ceiling for total payroll for eligibility for the re- fundable tax credit would be $6 million for 2019 and 2020, $6.5 million for 2021, and $7 million for 2022. Beginning in 2023, the ceiling would be indexed. For SMBs with a total payroll of $1 million or less, the tax cred- it would be calculated at a rate of 50 per cent for workers aged 60 to 64 years, to a maximum of $1,250 per year. For employees aged 65 and older, the maximum tax credit would be calculated at 75 per cent for SMBs with a total payroll of $1 million or less, to a maximum of $1,875 per year. Girard said the proposal was designed to encourage employ- ers to hire older workers to help address a labour shortage due, in part, to an aging population. To persuade older workers to remain in or re-enter the work- force, the budget also included changes to the province's tax credit for experienced workers. The tax credit, which employ- ees can claim on a Source De- ductions Return (TP-1015.3-V), eliminates income tax payable on part of their eligible work in- come that exceeds $5,000. The budget proposes to lower the age at which individuals may claim the tax credit from 61 years to 60. It also proposes to increase the ceiling on excess work income that is eligible for the tax credit to $10,000 for workers aged 60 to 64. Currently, the ceiling varies from $3,000 to $9,000, depend- ing on age between 61 and 64 years. The ceiling would remain $11,000 for older workers. The government would also rename the tax credit to the tax credit for career extension. The tax credit proposals would apply as of the 2019 tax year. The budget also included tax credit changes that employers in the hotel and restaurant sector may claim for reporting employ- ee tips. The changes would add additional employer indemni- ties to the list of eligible expenses that employers may claim for the refundable tax credit. In Quebec, employees working in the hotel and restaurant sector must generally report their tips to their employer every pay period. If the amount that an employee reports is less than eight per cent of the sales upon which tips are expected, employers must allo- cate to the employees the differ- ence between the amount report- ed and what was expected. Employers are required to in- clude the reported and allocated tips when calculating source deductions and employer con- tributions, as well as when de- termining statutory holiday pay, pay for the National Holiday, vacation pay, and pay for certain leaves allowed under the Act re- specting labour standards. Employers may claim the re- fundable tax credit for the por- tion of these expenses related to the tips. The budget proposes to add to the list of eligible expenses for which employers can claim the tax credit two new days of paid leave that employees may take for family obligations or for health reasons if they have at least three months of service. The change would apply to days of paid leave that employees take beginning Jan. 1, 2019. Saskatchewan: The Saskatchewan budget, which Finance Minister Donna Harpauer tabled on March 20, did not contain any changes to provincial personal income tax rates or tax brackets. It also did not address if, or when, the government would go ahead with income tax rate changes first announced in 2017, but not yet implemented. While it reduced rates in 2017, the government announced last year that it would temporarily hold off on the 2019 rate reduc- tions, originally planned for July 1, until the province's finances improved. In this year's budget, Harpau- er announced that the govern- ment had eliminated the prov- ince's deficit. Among the only employ- ment-related tax measures in- cluded in the budget were new, non-refundable tax credits for volunteer firefighters and vol- unteer emergency medical first responders, beginning in 2020. Individuals with at least 200 hours of eligible volunteer ser- vices in a year would be able to claim a $3,000 tax credit amount. British Columbia: The British Columbia budget, which Finance Minister Carole James presented on Feb. 19, did not contain any payroll-related tax rate changes, although it did reiterate the government's inten- tion to eliminate Medical Servic- es Plan premiums next year. The budget announced that the government would spend $14 million over three years to transform the province's Em- ployment Standards Branch, including updating employ- ment standards legislation and ensuring that the branch ap- plies the standards fairly and consistently. Some of the funding will go to- wards implementing a Tempo- rary Foreign Worker Protection Act and creating a registry of li- censed foreign worker recruiters and employers seeking to hire. Budgets in New Brunswick, Northwest Territories, Nova Scotia, Nunavut, and Yukon did not contain any payroll-related tax measures. Budgets for Alberta, New- foundland and Labrador, On- tario, and Prince Edward Island are still to come. Taxable benefits, payroll taxes among changes from BUDGETS on page 1 News Quebec is proposing to reduce payroll taxes on businesses employing older workers.

• Cover