Canadian Payroll Reporter

News Published 12 times a year by Thomson Reuters Canada Ltd. Subscription rate: $179 per year Customer Service Tel: (416) 609-3800 (Toronto) (800) 387-5164 (outside Toronto) Fax: (416) 298-5106 E-mail: carswell.customerrelations @thomsonreuters.com Website: www.carswell.com One Corporate Plaz 2075 Kennedy Road Toronto, Ontario, Canada M1T 3V4 Director, Carswell Media Karen Lorimer Publisher John Hobel (on leave) Associate Publisher/Managing Editor Todd Humber Editor Sheila Brawn sbrawn@rogers.com Lead Editor Sarah Dobson Assistant Editor Mallory Hendry (on leave) Assistant Editor Anastasiya Jogal Marketing Manager Robert Symes rob.symes@thomsonreuters.com (416) 649-9551 Circulation Co-ordinator Keith Fulford keith.fulford@thomsonreuters.com (416) 649-9585 Payroll Reporter Can R adian a www.payroll-reporter.com ©2015 Thomson Reuters Canada Ltd ISBN/ISSN: 978-0-7798-2810-4 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, photocopying, recording or otherwise without the written permission of the publisher (Carswell, a Thomson Reuters business). Return Mail Registration # 1522825 | Return Postage Guaranteed Paid News Revenue Toronto Canadian Payroll Reporter is part of the Canadian HR Reporter group of publications: • Canadian HR Reporter — www.hrreporter.com • Canadian Occupational Safety magazine — www.cos-mag.com • Canadian Payroll Reporter — www.payroll-reporter.com • Canadian Employment Law Today — www.employmentlawtoday.com • Canadian Labour Reporter — www.labour-reporter.com See carswell.com for information December 2015 | CPR Electronic format allowed with consent the total amount of all benefits paid in the calendar year is $500 or less. Multi-employer plan administrators or trustees that provide taxable benefits from group term life insurance to former employees or employ- ees of such a plan are required to prepare a T4A slip only if the benefit is more than $25. • Report retiring allowances in the "Other Information" area of the T4. Use code 66 to report the amount of the retiring allow- ance that is eligible for tax-free transfer to a registered pension plan (RPP) or registered retire- ment savings plan (RRSP) (code 68 for Status Indians). Use code 67 to report the amount that is not eligible for transfer. • Report a pension adjust- ment (PA) in T4 box 52 if the employer contributes to an RPP or a deferred profit-sharing plan (DPSP) for the employee. En- ter only the dollar amount (no cents). Leave the box blank if the PA is zero or a negative amount, the employee died in the year or the employee is all paid up (meaning the employee no lon- ger accrues new pension credits in the year, although he or she remains a member of the plan). • The maximum contribution limit for 2015 for money pur- chase plans is $25,370 and for DPSPs, it is $12,685. • If an employee worked in more than one province or terri- tory during the year, complete a separate T4 for each jurisdiction. Ensure that the PA (if applicable) is reported proportionately on each T4. If this is not possible, report the PA on one slip. • Report all amounts in Cana- dian currency on T4s and RL-1s. For Quebec, if this is not pos- sible, enter "200" in one of the blank boxes in the Renseigne- ments complémentaires area of the RL-1, followed by the type of currency used . • Give employees two copies of their T4, T4A, T4A-NR and NR4 form by delivering them in person or mailing them to each employee's last known address. If the employee is no longer em- ployed by the employer and the mailed slips are returned, keep the slips with the employee's file. • Instead of providing printed copies of the forms, employers may give employees T4, T4A, T4A-NR and NR4 slips in an electronic format as long as em- ployees have consented to this in writing. • Give Quebec employees copy 2 of the RL forms. Employ- ers may provide a paper version or, if they have the employee's written consent, an electronic version. • Employers with up to 50 in- formation slips of one type to file for a calendar year may file their returns on paper or over the In- ternet. Employers with more than 50 information slips of one type to file must file over the In- ternet. Beginning Jan. 1, 2016, the CRA and Revenu Québec can penalize employers who fail to do this. The penalty will range from $250 to $2,500, depending on the number of information slips by type the employer failed to file over the Internet. • To change information on a T4 or RL slip already sent to the CRA or Revenu Québec, you have to file an amended form. Follow the procedures set out in the CRA's Employers' Guide – Filing the T4 Slip and Summary (RC4120) and Revenu Québec's Guide to Filing the RL-1 Slip: Employment and Other Income (RL-1.G-V). The guides also provide information on how to cancel slips. • If employees lose their T4, employers may give them a re- placement slip. Mark the slip as "DUPLICATE" and keep a copy for your records. Do not send a copy to the CRA. Revenu Qué- bec follows a similar procedure. • Before submitting the forms, check and double check the amounts reported to ensure that they are correct, especially for boxes related to C/QPP and EI. This may reduce the need for is- suing amended forms. • It may also help avoid a CRA Pensionable and Insurable Earnings Review (PIER) report, which could result in the em- ployer having to pay outstanding amounts for C/QPP contribu- tions and EI premiums, plus in- terest and penalties. from YEAR END on page 3 compliance, you are going to have to pay," she says. To avoid problems, Chong says payroll should initiate dis- cussions about payroll compli- ance with other departments. "They (payroll) need to com- municate the rules, the deadline requirements, and the regula- tions concerning payroll to all the players within the organiza- tion so that everybody is on the same page," Chong adds. Employers without good communication among depart- ments can run into problems with the CRA. Chong tells of one client whose company's gifts and awards program was run out of its HR department in the United States. The Canadian payroll de- partment did not know anything about it and so was not assessing taxable benefits until a CRA au- dit shone a light on it. "The CRA came in and not only did they levy fines and pen- alties for not being in compli- ance, they made the employer go back five years and revise T4s for everyone who received a gift or an award that was taxable," says Chong. The employees who received the gifts had to re-file their taxes and pay income tax on the items. While December may be too late in the year to fix all payroll problems that arose in the last 12 months, there is always a chance for a fresh start in the New Year. "If you want to get your pay- roll in order, there are a lot of steps that you can take at the beginning of the year and man- age it throughout the course of the year so that you are not left in December scrambling trying to get everything in order or figur- ing everything out," Chong says. Discuss compliance from HOLIDAYS on page 2

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