There were over 300 payroll-impacting legislation changes this year – here’s how we can help
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To say that 2020 was full of surprises would certainly be an understatement; in fact, there were over 300 payroll-impacting legislative changes this year alone! As your Year-End work begins in earnest, this can feel overwhelming… but it doesn’t have to be.
In April 2020, Payworks first released the COVID-19 Related Government Relief and Legislation Guide for Canadian Business to provide clear and frequently-updated summaries of federal and provincial supports for both employers and employees. The Legislation Guide evolved alongside these supports, ultimately tripling in length by the end of the year!
We’re continuing to update the Legislation Guide as we all navigate the COVID-19 pandemic together, and encourage you to subscribe to receive the current version and any subsequent edits. But in the meantime, here’s a quick refresher of a few of the most payroll-pertinent federal programs and how they impact you, your staff and your year-end processes:
1. Supports for employers
- Temporary 10% Wage Subsidy for Employers (TWS): This subsidy was one of the early-days relief programs for Canadian businesses, introduced in the spring and expiring in the summer.
The basics: The TWS was a three-month measure that allowed eligible employers to reduce the amount of payroll deductions they need to remit to the Canada Revenue Agency (CRA). The TWS only applied to the federal, provincial or territorial income tax portion of the remittance, and the subsidy was equal to 10% of the remuneration paid from March 18 to June 19, 2020. The maximum total TWS claim for each business is the lesser of $1,375 per eligible employee or $25,000 (note: associated Canadian-controlled private corporations were not required to share the maximum TWS of $25,000 per employer).
How Payworks can help: Within days of the TWS’ announcement, Payworks had developed a Temporary Wage Subsidy Calculator to assist clients in making the necessary calculations; the Calculator was launched on the same day the legislative bill was passed. While the subsidy period is over, retroactive claims can still be made – consult the Legislation Guide or see "Your top legislation questions... answered!” to learn more about how to maximize this benefit. And when it comes to reporting, don’t forget about Form PD27 for each payroll program (RP) account – see the CRA site for more details on these requirements.
What clients are saying:
“Thank you for keeping up on simplifying the subsidies available. Found it very easy to find how to use your system to apply them. Keep up the great work.” (from an AB-based gas station owner) - Canada Emergency Wage Subsidy (CEWS): The CEWS has been one of the longest-running and most-leveraged programs for Canadian employers since it was introduced this spring. In fact, an August 2020 business leader survey cited by Canadian HR Reporter found that over 75 percent of respondents use the CEWS to keep employees on the payroll and almost 25 percent use it to rehire previously laid-off staff.
The basics: The CEWS provides eligible employers with a limited subsidy for the majority of eligible remuneration to each eligible employee. While eligibility criteria (particularly surrounding reported revenue decline) and subsidy amounts have continued to change in past months as they pertain to specific periods, the program itself has been extended as of November 2020 to run until at least June 2021. For a more comprehensive overview of how the program has evolved and what criteria applies to which periods, please see the Legislation Guide.
How Payworks can help: In addition to establishing a dedicated Wage Subsidy response team this summer to answer client questions about the program, Payworks has introduced the CEWS Baseline Remuneration Report and the CEWS Employer Paid Contributions Report to assist in the necessary calculations within the designated pay periods. See “Year-end reporting: what you need to know for 2020” or visit the Help Centre in the Payworks application for more details!
What clients are saying:
“Love the CEWS baseline calculator – WOW!” (from a BC-based masonry contractor)
“Amazed and impressed by the fantastic job the Payworks team is doing to keep us informed of the rapidly changing (understatement) legislation during this COVID crisis as well as the programming required to manage it. Your efforts are greatly appreciated! EXCELLENT JOB!” (from a national agriculture-industry supplier)
Supports for employees
- Canada Emergency Response Benefit (CERB): Almost nine million Canadians applied for the CERB after it launched this spring. The program has since been discontinued, serving eligible applicants via new Employment Insurance programs instead (more on that below!).
The basics: The CERB provided a taxable benefit of $500 per week to eligible workers who lost their income due to COVID-19.
While the CERB expired this fall, retroactive applications could be submitted up until early December 2020. Please see the Legislation Guide for further details.
How Payworks can help: As pandemic mitigation restrictions have tightened, loosened and tightened again (depending on your region), managing ROEs and layoffs has been a significant burden on payroll teams and business owners from coast to coast. Payworks’ Client Service Representatives have been extensively trained in managing the ROE process, as well as the requirements for bringing employees back onto the payroll.
The crossover between employer subsidies and employee support programs can also be a point of major confusion for both employers and their team – please see "Your top legislation questions... answered!” to get up to speed.
What clients are saying:
“We had temporary layoffs and salary reductions that necessitated numerous changes to our employee and payroll profiles, and Payworks was always available for both questions and solutions!” (from an ON-based commercial manufacturer)
“We are grateful for Katharine’s exceptional service. As you have experienced yourselves, these are extraordinary times of great stress, and Katharine was pleasant, cheerful, patient, knew exactly what to do and helped us get our process done. We could not have done it on our own. Kind regards.” (from a SK-based church) - Canada Recovery Benefit: As of September 27, 2020, the CRB has replaced the CERB for those impacted by loss of income due to pandemic-related restrictions or self-isolation as required by their region’s public health authority. This program will run until at least September 2021.
The basics: This CERB successor program has been split into three parts:- Canada Recovery Sickness Benefit (CRSB), which provides $500 per week for up to two weeks for those unable to work as they’ve been required to self-isolate or those with underlying conditions/receiving treatment that makes them more susceptible to COVID-19
- Canada Recovery Caregiver Benefit (CRCB), which provides $500 per week for up to 26 weeks for those with unexpected caregiving responsibilities due to pandemic-related school/childcare closures, program shutdowns, etc
- Canada Recovery Benefit (CRB), which provides $500 per week for up to 26 weeks for those who’ve seen an income reduction of at least 50% due to COVID-19
How Payworks can help: For employees required to take unexpected time off due to a COVID-19 diagnosis or a school closure, this sudden change can feel overwhelming. We encourage clients to connect with their Payworks CSR or visit the Help Centre in the Payworks application to ensure the steps required within the payroll process run smoothly, so that your team can ultimately focus on assisting your impacted employee(s) during this difficult time.
If you have questions around employer responsibilities or best practices from a HR perspective, Payworks’ HR Advisory Services offers expert guidance and practical resources.
What clients are saying:
“I have to report that Shayleen has been such an amazing help to me, especially over this COVID period. I can always count on her for any small or huge problem I have and she always comes through. She is so helpful and a pleasure to work with.” (from an ON-based pub restaurant)
And when it comes to Year-End, don’t forget…
- T4: The Canada Revenue Agency has added four new boxes to the T4 for reporting the employment income and retroactive payments necessary to validate payments for support programs like the ones listed above and more! Check out “What you need to know about new T4 boxes for 2020” for an overview of how to manage this change within the Payworks application.
- T2200: If the majority (or even a portion) of your team worked from home this year, we recommend you familiarize yourself with the CRA’s recent streamlined approach for claiming work-from-home expenses. Employees working from home will be able to claim up to $400 in the 2020 tax year without the need to track detailed expenses and generally, without employers having to complete a T2200 form for each remote worker. For a quick overview, see “Three T2200 basics to understand in the year of remote work.”
What clients are saying:
“I want to thank all the staff that I’ve received help from in navigating through the ordinary and – in COVID times – extraordinary payroll processing. You are always helpful, friendly and knowledgeable. I rely on you and you always deliver. Thank you!” (from a BC-based fitness and recreation facility)
