Canadian HR Reporter

CANADIAN HR REPORTER September 7, 2015 20 FEATURES Credit: vetkit (Shutterstock) HR Manager's Guide to Employment Files and Information Management: Legislation and Best Practices uniquely addresses the management of all types of employee information throughout the employment lifecycle, from recruitment to termination. Employment information and documentation management carries legal requirements that protect an organization from litigation, and are essential to the creation of sound policies for efficient, effective, and ethical business practices. Easy to read and understand, this new guide provides Human Resources professionals and others who deal with employee files, either electronically or in paper format, with: • Key legislation and emerging case law • Best practices in the areas of privacy, records retention, human resources information systems (HRIS), and information security • Practical guidance, tools and templates, such as sample policies • Information on all Canadian jurisdictions Know your legal obligations in managing employee files Available risk-free for 30 days Order online: www.carswell.com Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Order # 986618-65203 $70 Softcover approx. 100 pages April 2015 978-0-7798-6618-2 Shipping and handling are extra. Price(s) subject to change without notice and subject to applicable taxes. 00228VC-A49657-E98872 New Publication HR Manager's Guide to Employment Files and Information Management: Legislation and Best Practices A Canadian HR Reporter Special Report Howard A. Levitt, B.A., LL.B., and Tanya Neitzert, B.A., CHRP Brought to you by: PAYROLL Five costly payroll mistakes — and how to avoid them By Janet Spence P ayroll compliance and accuracy are the goals of every payroll practitioner. To help with the latter, here's a list of five common payroll mis- takes, followed by tips on how to avoid them. Miscalculating taxable employment income Many employers do not report personal and living expenses they've paid on behalf of em- ployees as taxable employment income. However, unless the employee falls under a specific exemption, these amounts are considered taxable income. Where an employee is provided free or subsidized housing, there is generally a taxable benefit to the employee equal to the fair market value (FMV) less any amount charged to the employee. In addition, amounts such as bonuses, commissions, tips or gratuities, vacation pay, certain honorariums and flat-rate ve- hicle allowances (not related to the number of kilometres driven) must be included as part of the employee's taxable employment income. Reporting taxable benefits only at the end of the year Use caution when assessing tax- able benefits, such as employer- provided group term life insur- ance premiums. Schedule the applicable source deduction remittances according to the ap- propriate payroll schedule, and be absolutely certain you are calcu- lating the actual value of the ben- efit, including any related taxes. Otherwise, the employee may face income tax liabilities when he files his personal income tax return and the employer could face non-compliance penalties and subsequent audits from the Canada Revenue Agency (CRA) and Revenu Québec (RQ). For more information, see CRA guide T4130, Employers' Guide – Taxable Benefits and Allowances. For those paying employees in Quebec, also see RQ guide IN- 253-V, Taxable Benefits. Not remitting source deductions on time Due dates vary depending on the type of remitter you are, which is determined by the CRA and RQ, based on your average monthly withholding amount from two calendar years ago. Penalties ranging from three per cent to 15 per cent may be applied if you fail to pay or remit deductions by the prescribed deadlines. As a best practice, payroll practitioners should create pay- roll schedules in preparation for the next year, and plan ahead for statutory holidays and leap years to ensure they meet their remittance deadlines and pay workers on time. Failing to properly handle the treatment of bonus payments Avoid errors when making bonus payments to employees by apply- ing the following. • Use the bonus tax method to calculate income tax deduc- tions. e tax rate applied in pay period tables assumes an employee will be making X amount of dollars for the year, spread over Y number of pay periods; however, a bonus pay- ment increases the employee's overall earnings for the year. See the CRA guide T4001, Employ- ers' Guide – Payroll Deductions and Remittances and the RQ guide TP-1015.G-V, Guide for Employers: Source Deductions and Contributions for detailed examples on applying the bonus tax method. • When making a bonus payment outside of the normal pay period run, do not surpass the maxi- mum annual exemption — cal- culate the C/QPP contribution by multiplying the bonus amount by the current C/QPP contribu- tion rate without applying the C/QPP pay period exemption and do not use the C/QPP tables (which have the pay period ex- emptions built into them). • If an employee requests all or part of her bonus to be directed to her registered retirement MISCALCULATE > pg. 23 Credit: vetkit (Shutterstock)

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