Contents:

Welcome
Upcoming Events
What's New
GrandMaster Updates

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Welcome!

January 2003 - 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.

Upcoming Events

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 3, 2002 - CCRA interest rates for the first calendar quarter - The Canada Customs and Revenue Agency (CCRA) today announced the prescribed interest rates that will apply to amounts owed to the CCRA, and to amounts the CCRA owes to individuals and corporations. These rates are calculated quarterly in accordance with applicable legislation and will be in effect from January 1, 2003 to March 31, 2003. (Full Story - 170 Words)

December 19, 2002 - General Corporate Tax Rate cut by 2 Percentage Points as of January 1, 2003 - Deputy Prime Minister and Minister of Finance John Manley reaffirmed today that the 25-per-cent general corporate income tax rate is legislated to decrease to 23 per cent as of January 1, 2003. The rate will fall to 21 per cent by 2004. Prior to the introduction of this plan, Canada’s general corporate tax rate was 28 per cent. By 2006, together with announced provincial tax cuts, Canada’s average corporate tax rate will be 5 percentage points below the U.S. rate. (Full Story - 555 Words)

December 20, 2002 - 2003 Automobile Deduction Limits and Expense Benefit Rates for Business - John Manley, Deputy Prime Minister and Minister of Finance, announced today the automobile expense deduction limits and the prescribed rates for the automobile operating expense benefit that will apply in 2003. View the following link to learn more about the specific changes. (Full Story - 475 Words)

December 23, 2002 - Interim Measure Extended on Deductibility of Provincial Payroll and Capital Taxes - The Minister of Finance announced today that the interim measure that limits the deductibility of increases in provincial payroll and capital taxes will continue to apply in 2003. Under the interim measure, any existing provincial payroll and capital taxes will remain deductible for federal income tax purposes, but any 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 - 194 Words)

December 12, 2002 - Gifts and awards given by employers to their employees - The CCRA is reminding employers about how gifts and awards given to employees are taxed. A policy change that came into effect in 2001 makes it easier for employers to administer their gifts and awards programs because it removes the burden of determining the fair market value of small gifts and awards. Employers are reminded that the policy does not apply to cash or near-cash gifts and awards. Near-cash is any item that can be readily converted to cash or that is equivalent to cash. (Full Story - 409 Words)

December 20, 2002 - Proposed changes to EI Regulations regarding 900-series SINs - The HRDC announced today that proposed changes to the Employment Insurance Regulations to introduce expiry dates on all 900-series Social Insurance Numbers (SINs) are being pre-published in the Canada Gazette Part 1 today for a 30-day public consultation period ending on January 20, 2003. (Full Story - 543 Words)

British Columbia:

December 16, 2002 - Payroll Process Modernization to Save B.C. $3.5 Million - The B.C. government is changing the payroll process for its full- and part-time employees starting February 2003. This reform, including pay period realignment, will save taxpayers $3.5 million by fiscal 2004-05 and result in a more streamlined payroll operation. (Full Story - 387 Words)

December 12, 2002 - WCB Board to be Respinsive to Employees, Employers - A board of directors has been named to review, restructure and rebuild the Workers’ Compensation Board to make it more responsive to the needs of employees and employers. "The composition of the board has been laid out in legislation to ensure decisions are made with the public interest as the priority," said Labour Minister Graham Bruce. The board will be in place Jan. 2, 2003. (Full Story - 851 Words)

Manitoba:

December 11, 2002 - WCB holds the line on 2003 average premium rate - The Workers Compensation Board announced today that the average premium rate charged to employers for WCB coverage will remain at $1.56 for 2003. On average, Manitoba employers pay $1.56 per $100 of their assessable payroll to the WCB in return for accident insurance coverage for their workers including wage loss payments, medical benefits and rehabilitation services. Employers may pay a lower or higher rate depending on the safety and health risk of their business and the cost of prior claims. (Full Story - 375 Words)

New Brunswick:

December 6, 2002 - NB sees largest national decrease in unemployment rate - The province had the most New Brunswickers working and the largest labour force ever last month which fuelled the most significant decrease in its seasonally adjusted unemployment rate in the nation, Training and Employment Development Minister Norman McFarlane said today. (Full Story - 285 Words)

December 27, 2002 - New Brunswick businesses to benefit from lower taxes - New Brunswickers will benefit from provincial personal income tax savings of $130 million in 2003-2004. It means a one wage-earner family with income of $25,000 will now pay $519 less in New Brunswick personal income taxes in 2003 than in 1999, a reduction of over 47 per cent from the 1999 level. Cumulative provincial personal income tax savings total $360 million over the 2000-2001 to 2003-2004 period. (Full Story - 460 Words)

Newfoundland and Labrador:

December 10, 2002 - Antoine Named to Aboriginal Human Resources Development Council - Minister of Aboriginal Affairs Jim Antoine has been named a Champion of the Aboriginal Human Resources Development Council of Canada (AHRDCC). The Council, founded in 1998, creates partnerships with Aboriginal groups, government and educational institutions to create career opportunities for Aboriginal people. It also encourages private sector investment in Aboriginal human resource development. (Full Story - 240 Words)

Ontario:

December 4, 2002 - Ontario's sound fundamentals promote new jobs and growth - The government's commitment to sound economic fundamentals has helped Ontario promote new jobs and to be well positioned for the future, Finance Minister Janet Ecker announced today. "The economy is performing well. Since September 1995, one million net new jobs have been created in Ontario," Ecker said. "By cutting taxes, balancing the budget and restoring prudent fiscal management, we have positioned Ontario for economic growth and jobs.". (Full Story - 361 Words)

Saskatchewan:

December 17, 2002 - WCB Legislative changes effective January, 2003 - Changes to The Workers’ Compensation Act passed in the spring session as Bill 72 of the Legislature take effect January 1, 2003. The changes are based on recommendations made by the 2001 Worker’s Compensation Act Committee of Review. One of the five major changes include increasing the maximum wage rate from $48,000 to $51,900 on January 1, 2003. (Full Story - 377 Words)

Yukon:

December 12, 2002 - Change to Assessment Premiums Will Help to Address Rising Claims Costs - The Yukon Workers' Compensation Health and Safety Board (YWCHSB) will begin to gradually reduce subsidies to employers' assessment premiums starting in 2003 and continuing in 2004. The YWCHSB has also recalculated base assessment premium rates, based on updated projections of claims costs and investment income. The YWCSHB's financial statements show that claims costs have risen from $9.1 million in 1998 to $17.5 million in 2001. The liability for claims now stands at about $78 million. (Full Story - 811 Words)

The current release of GrandMaster Suite (3.70.00) incorporates a number of changes to make it even easier to use the program and perform your payroll tasks. Recent program changes since our last Payroll News issue include:

• Updated tax-tables and tax calculations for year-end procedures - The program has been updated to include the necessary changes to the tax calculation for January 2003. Your Provincial and Federal TD1 amounts will update automatically upon calculation of your first payroll of 2003. Tax amounts will balance with TOD for all calculation types and wages amounts and new employees added to the payroll will have the proper TD1 and PD1 amounts applied.
• WCB code not being added to an existing employee when using templates - When you added an employee to your payroll using a template, the WCB code defined in the template was not being applied to the employee. This problem has been corrected.
• Import now applies Tax and WCB Province to employees home province if undefined - If you performed an import without defining the employees tax province or WCB province, the program would not apply these settings. This would result in incorrect payroll calculations. The program has been adjusted so that if you import a payroll without having defined these settings, the employee's home province will be used.
• WCB not being reported correctly on Pay Register - If you performed a pay period adjustment or a year-to-date adjustment, the WCB was not being reported correctly on the Pay Register. This has been corrected.

Stay tuned to CanPay's Product News page to receive the latest changes and release information for all GrandMaster products!

The updated rates for CPP/QPP, EI and WCB have been announced for 2003. They are briefly discussed here along with some basic year-end procedures for each item.

2003 Canada/Quebec Pension Plan

The Canada Customs and Revenue Agency (CCRA) has released the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) rates for 2003. The rates are as follows:

Some CPP-related items to consider when preparing your T4s and T4As:

• Ensure that none of your employees have contributed more than the 2002 CPP maximum of $1,673.20.
• All taxable benefits must be included as employment income and the corresponding source deduction totals must be updated. The latter is especially important for individuals below the yearly pensionable (CPP) earnings. Remember that non-cash taxable benefits are not insurable, with the exception of board and lodging benefits provided in the same pay period that an employee receives cash earnings and an employer’s contribution to an employee’s registered retirement savings plan.
• CPP/QPP pensionable earnings (Box 26) on the T4 slip must be completed only if the amount is different from the amount reported in Box 14. If the amounts are the same, you can leave the box blank.
• You must prepare two T4 slips for employees who made contributions to both the CPP and QPP: one showing the QPP deducted and the applicable pensionable earnings and remuneration the employee earned in Quebec, and the other showing the CPP deducted and the applicable pensionable earnings and remuneration the employee earned in any other jurisdiction.

Workers’ Compensation Filing Deadlines/Assessable Earnings

Each Canadian province/territory has enacted workers’ compensation legislation, which identifies the industries covered, employers’ responsibilities for paying assessments and responding to workplace accidents, and the conditions under which an employee may claim workers’ compensation benefits.

The following table outlines the different province/territory WCB filing deadlines and rates for 2003:

• When preparing your T4s and T4As, remember that top-up amounts paid to employees receiving WCB benefits are reported on the T4. The actual WCB benefits are not reported on the form. With the exception of Quebec, WCB benefits are reported by the provincial/territorial boards on form T5007, Statement of Benefits.

Employment Insurance

Employment Insurance (EI) contributions are the second deduction following Canada or Quebec Pension Plan contributions. Both employers and employees must pay into EI. There are no age limits for EI premiums. Eligibility for benefits is based on the number of hours an individual works, with their earnings insured from the first dollar earned, up to an annual maximum. The maximum has been set at $39,000 since 1997 and will remain at $39,000 until the average industrial wage reaches that level.

The following table outlines the new EI rates for 2003:

Some EI-related items to consider when preparing your T4s and T4As:

• No employee has contributed more than $858.00 in EI premiums, the 2002 EI maximum.
• Ensure that you have not adjusted the EI premium amounts you reported on the T4 if you over-deducted employee contributions. The CCRA will credit the employees with the over-contribution when they file their tax return.