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| An Educational Service of CanPay Computer Software Ltd. |
January
2002
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Contents: Featured Article: Tax Relief in the December 2001 Federal Budget Keeping Employee Files Up-to-Date |
NOTE: This archive references other sites on the World Wide Web. From time to time, an article's link may be moved or deleted from the host site. If you encounter an out-of-date link, please e-mail the thepayrollnews@canpay.com. |
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January 2002 - Welcome to the latest edition of The Payroll News. As always, please feel free to forward this newsletter to your friends and associates who are interested in keeping up with the latest changes in the Payroll industry. Or better yet, subscribe them for free using the Tell Someone About Us link.
What's New in Canadian Payroll Listed here are recent changes in legislation on Federal and Provincial levels that may impact your payroll calculations. Please view the following list for changes that affect your region. FEDERAL: December 28, 2001 - CPP and OAS Benefit Rates Effective January 2002 - Canadians already receiving Canada Pension Plan (CPP) benefits as of December 2001, will see a benefit increase as of January 1, 2002. HRDC today announced CPP benefit rates will increase by 3%. There is no change to Old Age Security program (OAS) benefit rates. (Full Story - 562 Words) December 21, 2001 - General Corporate Tax Rate Cut by 2% Points as of January 1, 2002 - Finance Minister Paul Martin today reaffirmed that the 27-per-cent general corporate tax rate is legislated to decrease to 25 per cent as of January 1, 2002. The rate was reduced from 28 per cent to 27 per cent on January 1, 2001, and is legislated to fall to 21 per cent by 2004. (Full Story - 565 Words) December 18, 2001 - 2002 Automobile Deduction Limits and Expense Benefit Rates for Business - Finance Minister Paul Martin today indicated that the Government plans to maintain the automobile expense deduction limits and the prescribed rates at their current levels for 2002. (Full Story - 322 Words) December 18, 2001 - Interim Measure Extended on Deductibility of Provincial Payroll and Capital Taxes - Under the interim measure, existing provincial payroll and capital taxes will remain deductible for federal income tax purposes, but increases in these taxes by way of provincial actions to increase the rate, change the definition of the base or introduce new taxes would not be deductible. (Full Story - 127 Words) December 10, 2001 - Chief Actuary says Canada Pension Plan Financially Sound - The Canada Pension Plan (CPP) is financially sound, according to the 18th Actuarial Report on the Canada Pension Plan. One of the key changes in 1998 was the introduction of steady-state financing and the investment of funds in a diversified portfolio of assets to generate a higher long-run rate of return. Under steady-state financing, the contribution rate is scheduled to rise to 9.9 per cent in 2003. (Full Story - 231 Words) November 30, 2001 - EI Premium Rates Set at $2.20 for 2002 - Employment Insurance (EI) premiums will be reduced by 5 cents to $2.20 in 2002. This is the eighth consecutive time EI premiums have been lowered since 1994, when they were $3.07 per $100 of earnings. In total, employers and employees will save $6.8 billion in 2002 compared to the 1994 rate. (Full Story - 524 Words) Alberta: December 19, 2001 - Personal Exemption Amounts Set to Increase - One of the components of Alberta’s 10 per cent single rate tax plan, implemented earlier this year, is the indexation of tax credits to Alberta’s inflation rate. This means the amount of money an individual can earn without paying provincial personal income tax will increase from $12,900 to $13,339, the highest in Canada. (Full Story - 369 Words) November 29, 2001 - Screening Criteria for Contentious WCB Claims - The Minister’s Tribunal Task Force has recommended a process and screening criteria to be used when government establishes a tribunal to review long standing, contentious Workers’ Compensation Board (WCB) claims. (Full Story - 695 Words) British Columbia: December 28, 2001 - Personal and Business Tax Cuts Effective Jan. 1 - As of Jan. 1, residents of B.C. will pay the lowest rate of personal income tax in Canada on their first $60,000 of income. In addition, the top marginal rate will be the second-lowest in Canada. All B.C. taxpayers have received cuts to personal income tax rates averaging 25 per cent since July 1, with B.C.'s lowest-income earners receiving the largest cut, at 28 per cent. (Full Story - 314 Words) Manitoba: December 28, 2001 - Minimum Wage to Increase April 1, 2002 - Labour and Immigration Minister Becky Barrett announced today that Manitoba’s minimum wage will rise 25 cents in 2002, retaining Manitoba’s ranking in the middle of rates among Canadian jurisdictions. Effective April 1, Manitoba workers earning the minimum wage will see a new pay rate of $6.50 per hour. (Full Story - 472 Words) December 11, 2001 - Minimum Wage Report Recommendations Released - Manitoba's Labour and Immigration Minister today released the recommendations of the Minimum Wage Board public review. Recomendations include: an hourly minimum wage rate of $6.75 effective April 1, 2002, increasing to $7 on Oct. 1, 2002 and the adoption of the Statistics Canada Low Income Cut-off as the standard measure after October 2002. (Full Story - 1092 Words) Newfoundland and Labrador: December 24, 2001 - Government Increases Short-Term Employment Assistance - The amount of available financial assistance has been increased for areas where significant numbers of people can not find work or enough work to support their families. The Minister of Industry, Trade and Rural Development announced today that an additional $1.5 million has been made available. "While the additional funding may not address the needs of each and every individual who requires additional work to qualify for employment insurance, it will help address extraordinary short-term needs in selected areas," the Minister said. (Full Story - 471 Words) Ontario: December 13, 2001 - WSIB Announces Employers' Premium Rate For 2002 - The WSIB Board of Directors has set the average WSIB premium rate for 2002 at $2.13 for every $100 for insurable earnings. The insurable earnings ceiling for 2002 has been set at $64,600 per worker - up from $60,600 in 2001. (Full Story - 354 Words) GrandMaster Updates The year-end release of GrandMaster Suite incorporated a number of changes that make it even easier to use the program and perform your payroll tasks. The year-end release was made available after the CCRA released their final draft of this year's tax tables. Some recent changes to the program include:
Stay tuned to CanPay's Product News page to receive the latest changes and release information for all GrandMaster products! • • • January 2, 2002 - GrandMaster Suite Update - An update now exists that addresses several issues relating to the year-end update. This update is now available for download from the CanPay website. Click Here to view the Canpay Downloads page. December 27, 2002 - GrandMaster II for DOS - An update now exists for GrandMaster II for DOS users that addresses an installation location issue with the year-end update. This update is now available for download from the CanPay website. Click Here to view the Canpay Downloads page. Tax Relief in the December 2001 Federal Budget With the release of December's Federal Budget, the Canadian government continues to build on their long-term plan for a stronger economy while responding to immediate economic concerns. Several of the changes will impact your payroll calculations for 2002 and beyond. Pre-Budget Notes - In the October 2000 Economic Statement and Budget Update, the federal government announced the largest tax cut in Canadian history. By 2004-05, these reductions will lower the personal income tax burden by 21 per cent on average and by 27 per cent for families with children. The December 2001 budget reaffirms the tax reductions announced in the February 2000 Budget. The measures announced in the Government's tax reduction plan have been legislated and will continue to deliver significant tax relief in 2002 and subsequent years. Tax Relief for 2002 In 2002, Canadian taxpayers will continue to benefit from indexation of the tax system. The indexation factor for 2002 is 3%. All indexed personal income tax parameters will be adjusted by this factor, thus reducing the tax burden for all taxpayers. Indexation will raise the income thresholds for all tax brackets in 2002. The basic personal amount will increase from $7,412 in 2001 to $7,634 in 2002. This means that the amount of income that all individuals can earn annually before paying federal income tax will increase by $222. For those with taxable income subject to the 22-per-cent rate, the threshold will be raised from $30,754 to $31,677, meaning that $923 more of their income will be taxed at the lower 16-per-cent rate. TD1 - Personal Tax Credit Return Information
Here are a few examples of what an individual's income taxes/benefits would have been without the Government's tax reduction plan:
Canadian taxpayers will continue to benefit in 2002 from the Government's tax reduction plan. The tax cuts are not only providing stimulus to the economy today, but are contributing to building a strong economy for the future. Stay tuned for for next month's Payroll News which will discuss the budget's effect on CPP/QPP, EI and WCB.
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