Year-end tips: ROEs, vacation entitlements and employer benefits
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The beginning of tax form season is upon us, and we're here to help every step of the way.
Here are three helpful tips to get you through year-end payroll processing for Records of Employment (ROEs), vacation entitlements, and employer benefits. For Payworks clients who have additional questions, reach out to your dedicated Client Service Representative at any time!
Can an employee’s final pay date be past the final pay period ending date?
For Records of Employment (ROEs), the final pay date cannot be past the final pay period ending date. If it is (and the final pay date is in the new pay period), Service Canada will think you still owe the employee money.
Payworks client pro tip: we've optimized the ROE process within our payroll solution so this doesn't occur. The Payworks' ROE system does not allow ROEs to be created if the last day paid is before the last pay period in which there were insurable hours. This is just one of the many ways we aid our customers in compliance.
How do I ensure I don’t miss rate changes for vacation pay?
Stay on top of rate changes by automating vacation entitlements. That way, when the employee reaches a seniority milestone that entitles them to increased vacation time, the employee's vacation rate changes as per labour standards or the company policy.
How do I avoid large Canada Pension Plan (CPP) costs at the end of the year?
Knowing which group insurance premiums are taxable and which are not can help you dodge hefty CPP costs at the end of the year. Taxable group insurance includes pay elements such as life insurance, Accidental Death & Dismemberment (AD&D) or critical illness employer contributions. In Manitoba, Ontario and Québec, there's Retail Sales Tax (RST) on an employee’s group insurance, which is charged by the provider. If the employer pays the RST on group benefits, it's a taxable benefit and therefore must be included in the calculation of CPP. If a taxable group insurance premium subject to CPP is missed each pay, large CPP costs can incur by the end of the year. Knowing how the premiums are split for your company can make a big impact.
Payworks client pro tip: Set up the employer-paid portion of taxable premiums in the Payworks payroll database that are subject to CPP/Québec Pension Plan (QPP) to ensure the premiums are added to the taxable income each pay period. This way, the CPP will be calculated at source rather than having to make an adjustment at the end of the year. For clients who use Payworks’ TANDEM solution, the provider sets the appropriate premium rates. Meaning, the information is sent back to Payworks to update the per pay amounts. If the employee leaves or is terminated, the Payworks system also terminates them with the benefit provider.
For more info on how Payworks can help in year-end payroll processing, visit: www.payworks.ca.
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