does year end happen at year end? Explain
no, it is a year long process. starts at the beginning of the year as the first payroll is being processed.
what are the following steps if done each month will help to ensure a smooth year end?
- make sure source deductions remitted are the same that shows on your payroll records and in the GL including employer portion
- any taxable benefits not entered on a per pay basis have been entered into the payroll records.
- all manual cheques issued to employees have been included in year to date totals
- all cancelled cheqs or recalled deposits have been removed from year to date totals
- all payroll records show a valid sin for each employee
- payroll records reflect a correct and current address for each employee
before completing your slips and sending them to employees and cra, what should you do
a full audit of your T4 information
If you do a full audit of your t4 information what will this do?
decrease the likelihood of receiving a PIER report from CRA later in the year.
What are some standard items to audit (T4 SLIP)
- make sure no employee has contributed more then the yearly maximums for CPP or EI (or not more than they should’ve)
- Group life insurance goes in box 40 of T4 and included in employee’s earnings in Box 14
- box 26 (CPP pensionable earnings) usually the same as box 14 (but not always, ie turned 70)
- box 24 insurable earnings - make sure it is not higher than it should be
- your business number is shown on all copies of the T4 except for the employee’s copy
If the employee contributes more than the yearly maximums for CPP and EI based on their earnings and exemption amounts, what will happen
they will be refunded by CRA
if you over submit CPP and EI to CRA what can you do?
you can apply for a refund by submitting a PD24 and submitting it with your T4s
- if you file electronically you will have to submit your PD24 separately
If there is an overpayment for CPP or EI do you adjust the T4?
no never
what are some reasons why the box 26 CPP pensionable earnings will be different than box 14
- employee turned 18 or stop contributing to CPP
2. receiving a disability pension
where does your business number not go
on employee’s copy of the T4
what information do you need from CRA to complete your T4s
- T4 slips and summaries
- T4A slips and summaries
- employer’s guide to filling the T4 slipand Summary form (RC4120)
- employer’s guide to Payroll deductions - basic info (T4001)
- Employer’s guide to payroll deductions - taxable benefits (T4130)
- quebec has their own guides
What are some good guidelines for completing the T4 slips
- complete it clearly and sort in alphabetical order by last name if doing manually
- separate t4 slip must be completed for earnings and deductions for each province in which the employee was employed during the year (province goes in box 10)
- report : salary wages, taxable benefits, allowances, and other taxable amounts paid as well as pension adjustment amounts
- must be reported in Canadian dollars and cents. no negative amounts can be reported or shown
- SIN entered on T4 for each employee must be correct and valid
- do not write Nil in any boxes
- if you have more than one business number there may be times when an employee has moved part way trough the year from one business number to the other. make sure both add up to the correct amount (do up two)
- make sure the correct pension adjustment is on the correct T4
why is the SIN important?>
it tracks CPP and EI amoutns for the employee which could impact future pension or insurance benefits.
What happens if an incorrect or no SIN number is provided and the employee has RRSP/RSp dedcutions?
it will impact the employee’s RRSP deduction limit which is reported on their tax assessment.
if you do not report the correct SIN or no SIN on T4 can you be charged?
you can receive a fine of $100 if you cannot prove you have made appropriate effort to get a SIN from an employee.
If you do not have a valid sin, what do you do?
complete the box with 9 zeros
can you write Nil if the boxes have nothing to report or put zeros in?
no, just leave blank
How many T4 copies are completed?
4
What colour of ink can you complete the T4s in?
blue or black
What is copy 1 for
the employer to submit to CRA (by feb 28 or 29th or the next business day if th elast day of feb falls on a Saturday or sunday
what is copies 2 and 3 for
given to employee also by the last day of feb (two slips on one piece of paper)
What does the employee do with their copies of the T4
one is kept and one is attached to their income tax return
- if they file electronically, they keep both copies and CRA may request to see them
What is copy 4 of the T4 for?
copy 4 stays with the employer in case they are audited by CRA
the employer should do what in case the employee loses their copies?
the employer should keep copies of the employee’s copies
- If you have to give the employee another copy you should mark DUPLICATE on both portions
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Unit 1: intro to payroll40
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Review Sayings For Hard Issues10
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Unit 2: Documentation and Internal Controls15
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unit 3:Employment Standards Act (ESA)18
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unit 4: Earnings and Deductions34
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unit 5 taxable benefits - NEED MORE23
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Unit 6 CPP27
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Unit 7 employment insurance37
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Unit 8 Income tax46
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Assignment questions22
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Unit 5 part 2: Taxable benefits31
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Unit 9: Employer Health tax29
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Unit 9: Workers Compensation30
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Unit 10: ROE52
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Unit 11: Payroll Accounting31
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Unit 12: Year end reporting46
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Unit 12: T4 slip boxes12
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ROE from condensed notes14
