1) Statutory Pay – Employers must pay all eligible* employees an average days pay** on each statutory holiday regardless of whether they work or not. If the eligible employee does work on a statutory holiday they are entitled to 1.5X their normal pay (up to 12hrs and 2X thereafter) PLUS an average days pay. AKA closing shop does not get you out of stat pay but staying open is expensive!
Statutory Holidays in BC: New Year’s Day, Family Day, Good Friday, Victoria Day, Canada Day, BC Day, Labour Day, Thanksgiving Day, Remembrance Day and Christmas Day.
Note: Easter Sunday, Easter Monday and Boxing Day are not statutory holidays.
2) Record of Employment – If an employee has an interruption of work for 7 consecutive days, the employer must file a Record of Employment (ROE) with Service Canada. This includes if they quit, are laid off or are fired. Furthermore, they must file it 5 calendar days after the end of the employees last pay period. This may seem simple enough but the actual process of filing can be a big pain. This is UNLESS you are pre-authorized for electronic filing of ROE’s. If you are not you have to call and have a paper copy sent to you. Then quickly prepare and file it before your 5 days are up. If you are an employer, I recommend registering for ROE Web to file online. The penalty for not filing can be up to $2,000, imprisonment for six months, or both.
3) Taxable Benefits – You need to understand what is taxable and what is not. In addition to wages and salary you may provide a vehicle to your employees, cell phones, gifts (cash and non-cash) etc. Basically, if you provide ANYTHING to your employee you should check if it is considered a taxable benefit. CRA has a taxable benefit guide for this purpose. Check out the url in the resource section below.
4) Vacation – All employees are entitled to 2 weeks of vacation after 12 month of employment. After 5 years of employment, this increases to 3 weeks. Employers may pay out employees but are required to make sure they take their allotted vacation time.
5) Contractor vs. Employee – Think you can get out of paying source deductions by calling them contractors? Think again! CRA comes down hard on business who employ contractors that should be considered employees. CRA has some basic tests and look at all factors to make a conclusion. They will consider: control (the person has over the work they do), financial (possibility for profit and loss), tools (who supplies the tools to get the job done) and responsibility. Contracts can help but are not a deciding factor.
6) Source Deductions and T4’s – CPP, EI and Tax are collectively called source deductions and must be withheld from each employees cheque. You then need to remit these source deductions to the Canada Revenue Agency along with your employer portion. The percentages change yearly so check with the current rates (see the CRA source deduction calculator below). T4’s must be filed for each employee including a company T4 summary by the end of February of the Calendar year for which you are reporting.
Taking on employees can be a big step in your business. It can also be a daunting task. Do your research and make sure you stay on top of legislation (like minimum wage changes). As the employer, it is ultimately your responsibility to ensure you are complying with all the rules.
*An eligible employee is someone who has been employed for 30 days before the stat. They also have to have worked for 15 of the 30 days immediately preceding the stat. Some groups have specific exclusions such as managers, agricultural workers, some commission salesperson and high technology professionals.)
**An average days pay is calculated over the 60 Days worked.
- BC Employer Fact Sheets
- ROE Web Registration
- CRA Employers Guide to Taxable Benefits and Allowances
- Canada Revenue Agency Source Deduction Calculator
- DIY Payroll Options with awesome exports for ROE’s:
- Payment Evolution (https://www.paymentevolution.com/) – you have to file the ROE but they provide an awesome export that you then just upload to ROE Web (if you have already registered for online filing).
- Wagepoint (https://wagepoint.com/) – they will do it for you (inclusive in price) unless you need it on paper (charge is $5 per ROE if they have to paper file).
- Simply Pay (www.simplypay.ca) – I have never used this provider but have heard good things. They note on their website they charge for this service $1 for the export (then you file through ROE web) or you can pay them to file it for you for $3 per ROE at the time of this blog post.
This blog is intended for general use and understanding and may not include all fact patterns, exceptions or changing circumstances. Do not depend on only the above article as your only guide as these issues can be very complex. This article is meant as an intro. The nature of payroll legislation is that it is an ever changing environment please refer directly to the government websites above for current details of the rules and regulations. If you are confused on an item, direct professional advice is always recommended to ensure you are getting the right information for you and your business. http://vhaccounting.ca/contact-us/