Payroll Webinar - January 2010

Transcript

Hi and welcome to the CRA's payroll webcast. This webcast is a recording of a webinar that took place in January of 2010. This session is no longer live, so if you have any questions please call the 1-800 number that will be provided at the end and one of our agents will be happy to help you. Thank you and we hope you enjoy the webcast.

My name is Joshua Drake and I've been with the Canada Revenue Agency for about 9 years. I'm from the Debt Management Compliance Directorate within the Canada Revenue Agency. There will be 2 question periods during the presentation, one slotted around the middle and one at the end, in which hopefully I will answer some of your questions.

Slide 3:

I'll mention the slides so our viewing audience knows we're on the same page, as it were. So who said tax wasn't exciting? So here we have a gentlemen who has just completed his income tax return, or so we're assuming, and he seems to be very excited. So whoever said tax wasn't exciting? We have proof to the contrary right here. Receiving a refund, which we're assuming is happening to this guy, can be quite exciting, as we all know. We don't want to dwell on the flip side of what can occur. I'm sure most people prefer the credit side than the debit side. This being said, I hope the web listeners, you guys out there, are among the excited. I'm going to keep the flow of information moving along at a steady pace, and endeavour to keep you listening.

Slide 4:

That being said, we'll have a quick look at today's agenda. Today we'll look at the following topics, as we can see listed on the slide. I won't go through them, you can see them yourself, I won't read through them. So have a quick look at that, that's what we will be covering today.

Topics covered:

• What the CRA does
• Employer and employee
• Employer's responsibilities
• Employee Benefits
• Reimbursement of Expenses
• Clergy residence deduction
• References

Before we begin, I'd like to be clear about the nature of this presentation. Its purpose is not intended necessarily to be an in-depth explanation of every detail concerning payroll obligations but rather a high-level overview of some of the more pertinent topics. You can think of it as Payroll 101 or even the pre-requisite of Payroll 101 really geared towards newer employers, so just so you know the nature of this presentation. We do have other venues in CRA that expand on the topic, such as seminars held across Canada in various cities. Easy to get to on our website, just click on the website and type in seminars, and it'll show you what seminars are available and when they're being offered.

Slide 5:

Here in a nutshell we explain what the agency does. Essentially the agency administers tax laws for the Government of Canada and for most provinces and territories. The CRA also administers various social and economic benefit programs, such as Universal Child Care and the Canada Child Tax Benefit, of which I'm quite fond of, having 3 kids. We also administer incentive programs, for example we administer the Scientific Research and Experimental Development Program, which encourages Canadian businesses of all sizes and all sectors to conduct research and development in Canada. So again, the agency administers the tax laws that are set by Parliament and the Department of Finance, so we carry out the law.

Slide 6:

Are you an employer? So now that you know what the agency does, we thought it might be prudent to start at the beginning and explore the concept of whether or not you are in fact an employer.

As you can see on the slide, we generally consider you to be an employer if you pay salaries, wages, bonuses, vacation pay, tips or you might provide certain taxable benefits. For instance, you might provide your employee with an employer owned car, which they may use on their personal time. This could represent a taxable benefit. If you do any of the above, you need to register for a payroll account. This is a quick and painless process, I assure you. You just need to contact the agency at the 1-800 number listed at the end of the slide show.

We also have a lot of online tools on the web, My Business Account for instance, and these help you get set up. It's very quick to set up a payroll account. If you need a payroll account and you already have an existing Business Number maybe, you only need to add a payroll account to your existing BN, so that's a simple step. Another great source of information on this topic is our pamphlet RC2: The Business Number and Your Canada Revenue Agency. Just a quick note on our publications, if you're not aware, they have numbers and alpha characters at the bottom left of the hard copies and the title. If you know the code, it is very quick in the CRA search engine to punch that in, so you punch in RC2 for instance, you'll get your pamphlet right away.

Slide 7:

We continue with the employee/employer concept. As a charity I imagine you have various people working for you, or volunteering for you, with different roles. For instance, you may have regular employees who draw a paycheque, you may employ a contract worker from time to time to do specific tasks, or you may have volunteers who do not draw any paycheque or receive any economic advantage. When I use the term economic advantage, I'm really referring to a taxable benefit. Again I mentioned, and I'll keep mentioning because it's a popular benefit, the use of an employer-owned car. So if they're using the car for personal use and not necessarily for the charities business purposes, the personal kilometers can represent a taxable benefit and should be included in income. If your organization has volunteers who do not draw any income or receive any economic advantage (i.e. taxable benefits) there are no payroll obligations for you.

Slide 8:

Just a quick slide highlighting the importance of making the correct determination of whether or not you have true employees. The reason being this will establish what your statutory obligations are with the Canada Revenue Agency. So if either you, or a person working for you, are unsure about a worker's employment status either party, the employee or employer, can request a ruling through Canada Revenue Agency. Businesses can request a ruling via the web using My Business Account, it's accessible on the first splash page, and we'll have a quick shot of the web page at the end of the presentation. You can also use the form CPT1 and send it to the CPP/EI Rulings Division of your local tax services office. It is very correct to get that determination down and ensure you are meeting your obligations.

Slide 9:

We are going to focus on the concept of if you have employees. If you don't have employees, and they're all volunteers drawing no sort of economic benefits, we mentioned there are no obligations.

We're going to focus on the concept of if you do have employees. So if you do, you have various statutory obligations to meet, such as - calculating and deducting Canada Pension Plan contributions, Employment Insurance premiums, and income tax from remuneration or other amounts that you pay your employees, other amounts meaning taxable benefits. Calculating and remitting your share (that's right folks, you have to pay your share of CPP and EI as well as the employee) and reporting the income and deduction information on a T4 slip or T4A slip or whatever the appropriate slip and summary by the required due date.

Other responsibilities include opening a payroll account with us to do all of this (remit and report), obtaining your employees Social Insurance Numbers (SINs), issuing a Record of Employment where necessary (ROE), and of course keeping proper records of all this documentation.

A quick note on the deductions, ensure that when you do make these deductions (CPP/EI/Income tax) that you do hold them in trust for the Receiver General of Canada and do keep them separate from the operating funds of your business.

For the purposes of this presentation we're just going to talk and speak to CPP not QPP again, this is just a quick high-level overview of some of the common scenarios. So if your employee has to report to your place of business in Quebec, or your employee does not have to report to your place of business, maybe they work from home, but you pay them from Quebec, do visit Revenue Quebec's website and it will be listed at the end of the slideshow. The Quebec Provincial Government administers its own provincial pension plan called the Quebec Pension Plan (QPP), and its own provincial income tax, and since January 1, 2006 the Quebec Parental Insurance Premium and the GST.

Slide 10:

I would like to now expand on the necessary statutory deductions, beginning with the Canada Pension Plan contributions. In case you're not sure what the CPP is (Canada Pension Plan) it's a contributory earnings related social economic pension program. It forms one of the 2 major components of Canada's public retirement system, the other component being Old Age Security (OAS).

Employees and employers began contributing to the CPP fund back in 1966, so it has been around for quite awhile, and lots of us are drawing from it I think, with the demographics of today. Generally, remuneration you pay your employee is pensionable, there may be exceptions for casual employment, or employment of your spouse or children so there is always an exception to the rule, but we're going to speak to the general overview here. As you can see you must deduct CPP if the employee is 18 years or older or younger than 70, has pensionable earnings, and does not already receive a retirement/disability pension. They can't be receiving it and having it deducted at the same time. For every dollar that you deduct from your employee, you must also pay a dollar as your employer portion.

Slide 11:

Let's have a quick look at some of the more typical payments subject to CPP deductions. Salary, wages, bonuses, commissions and payroll advances, as well as most taxable benefits, prizes and awards paid in cash (for instance).

Slide 12:

So next we'll have a quick look at the rates for CPP. So what we see basically there is a maximum pensionable earnings and the rate for '10 is 4.95% of those earnings, last year it was the same rate so the rate remains static. What did increase a little bit were the pensionable earnings. The rate can change year to year but it has remained static for quite awhile. As the employer you must contribute dollar for dollar of your employees' portion. Note that the first $3500 is exempt from CPP contributions. So the first $3500 of your employees' remuneration is exempt, and of course stop deducting CPP once the maximum is reached.

All the rates are available on the CRA website, you just have to click on All Rates and all of this information appears in a nice tabled format for you. Just so you know the concept that there is a maximum contributory earnings. The employee portion of this amount is 4.95% or $2,118.60 and they get a little bit more for 2010. If you're interested in knowing, the Department of Finance sets these rates, not the CRA, we are the administrators of the tax laws.

Slide 13:

Here we have a rudimentary example of how to deduct CPP. So if you deduct $100 of CPP from your employee's pay, you too must also deduct $100 into the fund, for a total amount remitted to the CRA of $200 in respect to the CPP, a very simple concept.

Slide 14:

You also have to deduct Employment Insurance, or more commonly referred to as EI, premiums from the employee's insurable earnings assuming that they're insurable employment during the year. Insurable employment includes most employment in Canada, under a contract of service or an employer/employee relationship.

There is no age limit to deducting EI premiums, as there was with CPP between 18-70, for EI there is no age limit. So you generally deduct EI premiums for the amounts we can see listed on the slide - salary, wages, bonuses, commissions, payroll advances, most cash taxable benefits. This list isn't exhausted by any means, but it is highlighting the more common payment scenarios paid by employers to employees. We do refer to our employers guide called Payroll Deductions and Remittances, a very informative guide which speaks to this scenario.

Slide 15:

Next we'll have a look at the maximum contributions employees and employers should make to EI, so there is a max as well as CPP there is one with EI. So here we have a brief look at the rates, I'm looking at the '09 rates, you guys see the '10 rates, which is great. As you can see there is a maximum amount of insurable earnings, which you can deduct EI from as I said similar to CPP.

The maximum insurable earnings for 09 was $42300, for '10 I thought it was actually a typo because the numbers seemed to transpose, but nonetheless for '10 the number is $43200. So make sure that's correct when you are deducting and calculating. The contribution rate established for '09 was 1.73% of this amount, as well as '10. The rate has been the same for this year and last year. The maximum annual employee premium for '09 was $731 and this year it's $747.36, so again these are just the maximums we're talking about. Once you've hit these maximums, this is the employees portion, stop deducting.

Now we get into your contribution, which is 1.4 times this amount. This amount being the $747 I talked about, which for '10 equals about $1,046 and some change, so recall that you too have to make a contribution to the EI fund with the employee, that's the point I'm trying to drive home, and of course stop deducting EI once the max is reached.

Slide 16:

So again a rudimentary example just to show you how to deduct. So if you've deducted $100 of EI from the employee, you would need to contribute 1.4 times this or $140 for a total remittance to the CRA of $240 in respect of your EI. This remittance would come in with your CPP and your Income Tax, all in one payment. Only up to the max of each year, and stop deducting once the max is reached even though we still consider the employment to be insurable.

Slide 17:

Next we'll have a quick look at income tax deductions. As an employer/payer you are responsible for deducting Income Tax from remuneration or other income you paid your employee.

There is no age limit to deducting income tax like CPP, and there is no employer contributions required so you can breathe a sigh of relief on this one.

Certain pay obligations such as union dues or registered pension plan contributions, do reduce the amount of income before you calculate your income tax. So for instance if I made $100 and paid $5 in union dues, you would calculate income tax on $95. Of course we have forms; we have forms for a lot of things at the CRA, which will help you determine how much income tax to deduct throughout the year. This form is called the TD1 form; we'll have a quick look at it on the next slide.

Slide 18:

We have a cropped glimpse of the form, it's a full legal size paper, and I know it makes for a very busy slide but I'm a visual person, I hope some of you out there are as well, I like a visual representation of what I'm talking about. So here we have the 2009 Personal Tax Credits Return, I think of it as a mini income tax return in advance, which basically lists the tax credits that an employee may claim on their personal tax return at year-end.

You can see the first credit there is the basic personal amount, which is $10,375 and this is the '09 form I'm looking at so be aware if the '10 has changed. It just lists the credits and helps you determine the amount of federal and provincial income tax or territorial income tax to deduct from your employees remuneration or other income such as pension.

The employer should keep the completed forms with their records, do not send us a copy, we don't require one. This is between the employee and employer, so if someone starts work with you, this is the form they should fill out immediately. It is a prescribed form under the Income Tax Act and must be completed by the employee.

There are 2 forms to complete, the provincial and federal as I mentioned, as the provincial rates vary from province to province, so there's different ones for different provinces. An employee may change this form, or amend it, if their life situation should change throughout the time of employment with you. For instance, I began at the CRA in 2001 and at the time I wasn't married and didn't have kids, now I am married and have kids so I may claim different credits on my personal tax return. I can contact my compensation area and say I'd like to update my TD1 and they should let you, as you should as well. Of course these forms are available through our website.

Slide 19:

We've reached our first question break. We'll take a break from the presentation and have a quick look at some of the questions that have been submitted.

If an employee quit during the year and started collecting Canada Pension, several months later he came back to work so I don't deduct CPP premiums. The T4 shows an exempt section, does he get two T4s or just one not showing the exempt status?

We only want one T4 slip. If you notice on the T4 slip, box 14 has employment income, which includes all employment income earned in the year. Then there's box 26 which speaks to CPP pensionable earnings, so on a T4 - quick rudimentary example - say $20,000 of earnings you deducted CPP from and $10,000 earnings no CPP was deducted, for a total remuneration of $30,000. So box 14 would have the $30,000 and box 26 would have the $20,000 of the CPP pensionable earnings. We'll calculate the fact that $20,000 is what's applicable to CPP here. So it's one T4 and just include the $20,000 or earnings with no CPP deducted in box 26. If that doesn't answer your question, give our business agent a call and they'll be able to walk you through that.

When we pay individuals to help out with a program 3-4 times a year do they need a T4 slip? The total amount for each person is about $400 per year.

I'd probably need some more information on this question. I'm going to answer this assuming you're speaking about regular employees, if you are speaking about regular employees yes they should receive a T4 slip with all the necessary deductions. I'd need a little bit more detail with respect to the employment status, but if they're employees do include that on the T4.

Is a Christmas bonus counted as part of earnings to go on a T4?

Yes. All remuneration should be included in box 14 of the T4 slip.

When it is issued as a separate cheque, must I make payroll deductions on the amount?

Yes you do. Say the bonus is given out at year-end; if the employee has reached the maximum of CPP/EI contributory earnings do not withhold CPP or EI. Obviously if they've hit the maximum, people hit the max, say in October, and if the bonus is given out later then do not deduct CPP or EI. But income taxes are applicable. There is a special bonus calculation to determine how much income tax there is, without going into details for everybody else, just hit the website under the Payroll link, on the first page there is Individuals and Businesses, go under Businesses, Payroll and there is a dropdown menu from A-Z, there is a B for bonuses. We've done our best to design topics that you can find easily on our website, and there is a calculation you'll want to do to figure out the income tax on the bonus.

We have 2 staff members with clergy status; I've recently visited the CRA website and could not follow the prompts regarding the clergy allowance. When I entered the monthly amount of clergy allowance, the gross pay goes up. Does that mean I should subtract the clergy allowance from the figure I entered as gross pay? Do I have to deduct it monthly or can the person deduct it at year-end when they do income taxes?

What you're speaking to, just for the rest of the audience, is a calculator we have online to assist people in determining their income tax calculations. There is a clergy allowance that's given out, some of you I'm sure know, if the calculator assumes there is no waiver in place so the full amount should be included in that. If there is a waiver, if as an employer, the employee has given you a proved waiver for the allowance that is given out then you can take that deduction into account and remove that from the calculator. Typically we recommend breaking this over pay periods so people aren't going through any hardship. Try to make your paycheques as even as possible, so we recommend calculating the deductions and breaking them over the pay periods throughout the year. If that doesn't answer your question please do call our Business Inquiries Agents for clarification and the internet site under payroll link is phenomenal it's really user friendly I assure you, you should be able to find what you're looking for in about 5-10 minutes.

Slide 20:

Let's have a quick look at the concept of remitting.

We've looked at all our deductions, CPP, EI and income tax, so what do you do with these deductions? We're going to want you to remit them to us at some point, there are special due dates that apply to that. I noted earlier that the deductions you make from the paycheques should be held in trust for the Receiver General of Canada and kept separate from the operating funds of your business.

We've broken up remitters into several categories based on the size of their payroll. Most employers are regular remitters, statistically speaking, and new employers are automatically considered as regular remitters.

As a regular remitter you must remit your deductions on or before the 15th of the following month from when you make the deductions. For instance, you made some deductions on your employee's paycheque in January for CPP/EI and income tax; we expect these remittances to be made to CRA, received by us, no later than February 15th. If your payroll changes or you have more employees or less employees, larger remittances, smaller remittances, you may have to report as frequently as 4 times a month.

What determines your remitting frequency is the size of your payroll. You may start out with 3 employees one year, and move to 20 or 40 employees the next year; this will change your remittance frequency.

We do a special calculation based on how much you remit and how often, and we will inform you, usually in December, if anything has changed for the upcoming year. If you remit monthly and your payroll situation has changed and you remit more than monthly, we will let you know by December in writing.

You can remit your source deductions through your financial institutions, telephone or internet banking services, at your financial institution with your remittance form, make sure you bring that, it has a hard-coated magnetic bar strip for the CRA to recognize and apply your payment to the correct payroll account, by automatic teller machine, or by mailing a cheque/money order with your remittance form.

Do allow sufficient time for the remittance to reach us, posted letter or using the ATM, there is a small amount of time it takes for the remittance to reach from the bank to the CRA. There are some consequences for late remitting, as well as late filing but we'll have a look at that in a few slides.

Slide 21:

We'll have a quick look again, so if you're a regular remitter and your pay period ends on January 28th (as an example) and your employee gets paid for this period on February 2nd. Let's say you're considered a regular remitter you will determine the due date based on the pay day of February 2nd, not for the pay period. If you are a regular remitter we would need those remittances by March 15th. You may need to remit more frequently or less frequently depending on the size of your payroll obligations.

Slide 22:

So once you've withheld and remitted your deductions you finally need to report these amounts by filing an Information Slip and Summary Report, typically a T4 slip and T4 summary perhaps a T4A slip and T4A summary depending on the types of payments you make.

What you deduct throughout the year and remit to CRA should equal the amounts included on your T4 slip and your summary. So if you deducted $200 from two people and remitted that to the CRA, your two T4 slips say $100 and $100 for $200 and it all balances. If there are discrepancies, i.e. you've sent in more money than you've reported, we'll let you know though a report in writing and you can clarify the discrepancy or we'll assist you with that.

In all instances you have to file a T4 Information Return and issue the slips to the employee by the last day of February following the calendar year in which the deductions where made. For example, if an employee worked for you in '09 for which you made deductions, and remitted source deductions, your T4 or T4A slip or Information Return is due no later than February 28th, 2010. In this case, this year actually February 28th falls on a Sunday, so it would be the next business day.

If you don't file the returns on time, as I mentioned, same with remitting, or distribute your slips to the employees on time, because if you recall they need to file their return by a certain due date, usually April 30th, and they need those slips to file, there are applicable penalties you have to pay. In addition to this, if you don't file in the correct format, there may be applicable penalties.

Effective January 1, 2010, if you file more than 50 information slips, you must file electronically, otherwise a penalty may be levied. We can process these T4 returns much more quickly electronically, it is a much more efficient system done electronically.

Slide 23:

As you can see there are consequences like I said, you aren't meeting your statutory obligations in the form of penalties. We administer various penalties, as you can see on the slide, for late remitting, late filing, or not filing in the correct format as I mentioned earlier. I don't want to focus the presentation on penalties obviously, but it is very important to know that they are levied, they are there, to encourage compliance. So meet your obligations, and avoid penalties.

Slide 24:

Now we're going to move on to employee benefits. We've covered the 3 basic source deductions being Canada Pension Plan contributions, Employment Insurance premiums and income tax deductions, and your obligations to remit and report these amounts.

I'd like to next explore the concept of paying your employees in other ways than providing salary or wage. Employers may offer various forms of remuneration such as benefits, as listed on the slide here we can see, automobile allowance, housing, board and meals, interest free or low interest loans etc.

Employers offer these to remain competitive with other employers, to get staff or seek staff, they are becoming more and more popular in the last couple of decades in fact we've seen a steady increase over the last 5 years in the amount of benefits reported on T4 slips. For example, one of the most popular benefits is the use of an employer provided car. If an employee uses an employer provided car for business related driving, that's fine, but also personal use driving, personal use driving would be considered a taxable benefit. There is a calculation to make based on the kilometers driven for the personal use. As an employer you are expected to calculate the benefit with respect to the personal use and include that amount in the income and withhold and deduct it appropriately.

You should also deduct CPP and EI premiums on this particular benefit but be aware that some other non-cash benefits may not attract EI. Our taxable benefits guide will help you to determine that. Include the value of the benefit in box 14, in the T4 slip under employment income, we lump all remuneration into that box and break out the benefit, the automobile benefit using the correct footnote code.

Slide 25:

Periodically we will undertake a review of these benefits and the administration of them, to ensure that they align with modern business practices. Some of our policies regarding taxable benefits date back to the 60s. We know that technology has changed quite a bit, the way people do business, people work from home with cell phones, so a review was recently undertaken by the agency of several benefits as listed here on the slide, which resulted in some of the changes of the way the benefits were administered. I don't want to get into too much detail, this is an overview presentation, but do know that there have been some changes to certain benefits as listed on the slide. We have a great document, Income Tax Technical News #40, or IT News #40, that speaks to these changes.

New policy regarding employee benefits:

• Overtime meal and allowances
• Allowances for travel within a municipality or metropolitan area
• Employer provided motor vehicles required to be taken home at night
• Loyalty programs
• Gifts and awards
• Transit passes

Slide 26:

Let's move on to a different concept here, a fairly basic concept: reimbursement of expenses. So what if you simply reimbursed your employee for something they paid out of their own pocket for carrying on employment duties for you. If you do reimburse someone for this reason, don't include the reimbursement in income, there is no taxable benefit here.

Similarly if you give your employee an accountable advance, don't include this in the employees' income. What I mean by an accountable advance is if you give someone $50 to go do something for the business, the accountable advance would be you asking for receipts for any purchases made, and any balance of money returned to you. In these scenarios you just restored these people back to their previous economic position they were in when they started out. So an example, if Steve (your employee) spends $20 out of his pocket to buy photocopy paper for the office, you reimburse Steve $20, the $20 has been in and out, it's a wash, there is no taxable benefit at all. However, if you reimburse Steve an unreasonable amount, say you give Steve $50 because it was hailing outside when he went to walk to the store, the additional $30 on top of the $20 that you reimbursed would be considered a taxable benefit. Reimbursed expenses typically don't draw benefit unless there's an unreasonable repayment.

Slide 27:

Here we'll look at a special deduction, I've seen from a couple of the questions already that this a topic you're obviously familiar with. That being said I'll gloss over quickly here.

Generally if an employee receives an amount in respect to his living accommodations, related to his employment, this amount or value of the accommodation or allowance is included in income. So it is a taxable benefit, generally speaking. This amount, obviously, you lump that in on the T4 slip on box 14 and again income code 30 on the bottom, identifying the value of the benefit.

If a person who is employed or has office as a member of the clergy or a religious order or is a regular minister of a religious denomination, they may be entitled to claim a clergy residence deduction, in respect of his residence, when calculating the income from employment on his personal income tax return. So at the end of the year, let's say a pastor can file the return and claim this deduction.

Slide 28:

Here is a quick screenshot of the principal page of the CRA website, again, a busy slide I realize, especially on your screen as its probably a quarter size. That being said, its handy having a visual representation. It speaks to a few of the more common things that people look for.

The diagonal arrow is pointing down to online services, if you can read that on your screen, is very handy, you can that its tabbed, if you work to the right it says Online Services, Individuals and Businesses, and Businesses also has an arrow pointing to it. That's where you're going to find your Payroll link, and all this information I've been speaking to is included in that page. Forms, guides and publications, listed at the top left.

We examine our website for various hits and try to organize it according to the public's need that's why these topics present themselves usually at the first of the page. A lot of information is on this website, I do realize that, but do take the time to familiarize yourself, especially in the little niche that you need in the website. It is quite helpful, you can become quite self reliant with payroll information but again if you are unable to glean the information you need from the website give us a call, the business number is right there and it is also on another slide, it is very accessible.

The last few slides here, I'm just going to skip to the last slide that says Questions, but I'll slowly go through here. These are our references that I've spoken to throughout the presentation. The slideshow will be available to you, you have a copy now but it will also be posted on the website later so you can reference it if you need to. It's a good small package for you, for payroll beginners.

Slide 29:

For more information:

• www.cra.gc.ca/payroll
• www.cra.gc.ca/bn
• www.revenuquebec.ca
• www.servicecanada.gc.ca
• Guide T4130 Employers Guide: Taxable Benefits and Allowances
• Guide T4001 Employer's Guide: Payroll Deductions and Remittances

Slide 30:

For more information:

• Guide RC4120 Employer's Guide: Filing the T4 Slip and Summary
• RC4110 Employee or Self-Employed
• Form CPT-1 Request for a Ruling as to the Status of a Worker under the Canada Pension Plan or Employment Insurance Act
• RC2, The Business Number and Your Canada Revenue Agency

Slide 31:

For more information:

• Form T1223 Clergy Residence Deduction
• IT-141 Clergy Residence Deduction
• Call 1-800-959-5525 (Businesses and self-employed individuals)

Slide 32:

Could you please address not having paid someone from October to December when paying them all at once in January (they're okay with this).

Essentially you need to calculate deductions on salary when it is paid and report them in the year that it is paid. If you pay them in January 2009, report this on a 2009 T4 slip.

I am the office administrator in a church; the questions come up whether or not the credential fees that we pay for our pastors would be considered a taxable benefit. This fee allows them to hold their credentials so they can perform marriages etc.

Essentially, payments made to allow employees to maintain professional status (including credential fees) are not taxable.

Do I issue a T4A for someone who is billed for employment and no deductions were taken?

A T4A is usually issued to contractors. All employment income should be reported on a T4 even if no deductions are made. Just as a caution, most employment income should have deductions made.

It is the responsibility of the employee to remit a new TD1 when they have changes? What is the responsibility of the employer?

Yes it is the employees' responsibility to inform the employer when they need to amend their TD1.

What if you have a volunteer that you reimburse for the use of gas, personal stuff like phone, mileage etc. does a T4 need to be issued? Do you need to charge CPP, EI and deduct tax?

A: If they are not employees and you are only reimbursing volunteers for reasonable expenses, there is no obligation to make for deductions. For reasonable things like this, for volunteers and you've reimbursed them dollar for dollar, there are no obligations to make.

There are many questions in the audience about whether or not amounts volunteers receive are taxable; I wish we could cover them all but we just don't have the time. It is a case-by-case scenario, so reasonable amounts, a little bit of gas here and there reimbursed, obviously there isn't going to be any obligations. If you aren't sure, do give us a call and we'll help you determine if there are some statutory obligations. I wish there was a straight answer, but it is a case-by-case scenario with volunteers.

Thank you and we hope you enjoyed the payroll webcast. The charities directorate will continue to offer webinars. Please visit the charity information webinar website for details on schedule and topics.

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