Contents:

• Welcome
• Upcoming Events
• What's New
• GrandMaster Update

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Welcome!

January 2005 - 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 Others 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 17, 2004 - 2005 Automobile Deduction Limits and Expense Benefit Rates for Business - Minister of Finance Ralph Goodale announced today the automobile expense deduction limits and the prescribed rates for the automobile operating expense benefit that will apply in 2005. The Government reviews these rates and limits annually, and announces any planned changes prior to the end of the calendar year. This practice ensures that businesses are aware of the new rates before the beginning of the year in which they apply. (Full Story)

December 7, 2004 - Employment Insurance Premium Reduced to $1.95 for 2005 - As of January 1, 2005, the employment insurance (EI) contribution rate will be reduced to $1.95 from its current level of $1.98 per $100 of insurable earnings, Minister of Finance Ralph Goodale and Minister of Human Resources and Skills Development Joe Volpe announced today. (Full Story)

December 3, 2004 - Canada Revenue Agency interest rates for the first calendar quarter - The Canada Revenue Agency (CRA) today announced the prescribed annual interest rates that will apply to any amounts owed to the CRA and to any amounts the CRA owes to individuals and corporations. These rates are calculated quarterly in accordance with applicable legislation and will be in effect from January 1, 2005, to March 31, 2005. (Full Story)

December 20, 2004 - Tables on Diskette (TOD) - Effective January 1, 2005 - TOD 2005.1.0 - The CRA has released the latest Tables On Diskette (TOD) -- a stand-alone computer program that calculates the Canada Pension Plan (CPP); Employment Insurance (EI); and federal, provincial (except Quebec) and territorial tax deductions for all pay periods. TOD is usually updated, as tax changes occur, for January 1 and for July 1. (Full Story)

December 23, 2004 - Important notice about Payroll Deductions Tables effective January 1, 2005 - The electronic versions of the 2005 Payroll Deductions Tables (T4032 and T4008), Tables on Diskette (T4143), and Payroll Deductions Formulas for Computer Programs (T4127) are now available on our website. On December 6, 2004, the Government of Canada announced the Employment Insurance premium rate for employees for 2005. Despite the timing of the announcement, we have released the 2005 payroll tables on our website at the earliest date possible. (Full Story)

December 21, 2004 - T4008 Payroll Deductions Supplementary Tables - The CRA has provided the T4008 Payroll Deductions Supplementary Tables effective January 1, 2005. The files contain the following periods: hourly, daily (240 working days), or 10, 13, or 22 pay periods a year. For the most common pay period (weekly, biweekly, semi-monthly, and monthly) and Employment Insurance Tables for 2005, refer to T4032 Payroll Deductions Tables. (Full Story)

December 16, 2004 - Extension of Interim Measure on Deductibility of Provincial Payroll and Capital Taxes - Minister of Finance Ralph Goodale announced today that the interim measure that limits the deductibility of increases in provincial payroll and capital taxes will continue to apply. Under the interim measure, any 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 generally would not be deductible. (Full Story)

Alberta:

December 2004 - 2005 maximum insurable earnings increase - Effective January 1, 2005, the WCB is increasing the maximum insurable earnings from $61,200 to $62,600 per worker. This means that benefits for workers earning more than the current maximum will now more closely match their pre-accident earnings. With this increase, 95% of injured workers covered by the WCB will receive benefits based on their full salaries, in the event of a work-related injury or illness. (Full Story)

December 2004 - The 2005 Alberta Wage and Salary Survey - If you are an Alberta employer, you may be one of 25,000 employers from across the province who will receive a copy of the 2005 Alberta Wage Survey in January. Please take the time to fill it in! The results are used to help injured workers transition back into the workforce. Find out why this survey is Alberta’s number one source for occupational pay scales. (Full Story)

British Columbia:

December 3, 2004 - Government links business and disabled persons - A new interactive job site is one of several new tools announced today by Human Resources Minister Susan Brice to make it easier for businesses to recruit the employees they need and provide employment opportunities for British Columbians with disabilities who want to work. For the B.C. Human Resources Management Association, the new employment tools are a practical way for the organization’s 3,000 members to stay ahead of staffing demands. (Full Story)

December 3, 2004 - B.C. unemployment hits 20-year low - All regions of the province are now in single digit unemployment numbers, a situation Labour Minister Graham Bruce said has not been seen for decades. The overall unemployment rate at 6.4 per cent is at its lowest rate since Aug. 1981. Youth unemployment stood at 11.4 per cent in November -- the lowest since August 1990. In April 1994 overall unemployment reached 10 per cent and in June of 1998, youth unemployment hit a peak of 19.4 per cent. (Full Story)

Manitoba:

December 3, 2004 - More people than ever working in Manitoba - Industry, Economic Development and Mines Minister Jim Rondeau today expressed his confidence in the province’s economy and said he is encouraged by Statistics Canada’s labour force numbers showing 3,700 more full-time jobs in November. "There are more people working in Manitoba than ever before. Our full-time job growth rate was the second strongest of all provinces last month," Rondeau said. "This is the fourth consecutive month that Manitoba has experienced total employment growth." (Full Story)

December 6, 2004 - Proposed pension legislation overhaul would offer more options, flexibility - The province has introduced proposed changes to the Pension Benefits Act which would strengthen and update the legislation. The legislation would amend the act to implement pension reform recommendations made by the Pension Commission of Manitoba in March of 2003. The proposed amendments focus on four key areas: clarification of pensions as ‘family assets’, protection of the ‘pension promise’ of an income for life, provision of increased flexibility and updated requirements for the governance and management of pension plans. (Full Story)

New Brunswick:

December 21, 2004 - Minimum wage Increases - The minimum wage will increase Jan. 1, 2005 raising the rate to $6.30 per hour up from the previous level of $6.20. This also means an increase of the minimum wage payable for time worked in excess of 44 hours per week from $9.30 to $9.45 per hour. In addition, there will be an increase to the minimum wage for employees whose hours of work per week are unverifiable and who are not strictly employed on a commission basis from $272.80 to $277.20 per week. (Full Story)

December 3, 2004 - Unemployment Rate drops to single digits - There were nearly 6,000 more people working in the province last month on a year-over-year basis as New Brunswick's unemployment rate dropped to single digits to stand at 9.9 per cent in November, Training and Employment Development Minister Margaret-Ann Blaney reported today. (Full Story)

Newfoundland and Labrador:

December 7, 2004 - Minister announces new Income and Employment Support Act - Joan Burke, Minister of Human Resources, Labour and Employment today announced the proclamation of the new Income and Employment Support Act and the accompanying Income and Employment Support Regulations. The act and regulations replace the outdated Social Assistance Act and Regulations which have been in effect since 1977. (Full Story)

December 9, 2004 - Act to Amend the Labour Standards Act (Bill 38) - Joan Burke, Minister of Human Resources, Labour and Employment today announced the Act to Amend the Labour Standards Act (Bill 38) has been passed in the House of Assembly, making Compassionate Care Leave available to workers in Newfoundland and Labrador. This amendment to the Labour Standards Legislation will ensure workers in our province have the ability to deal with important family issues and crises without having to worry about job protection.. (Full Story)

December 9, 2004 - Minister releases report on labour market agreement for persons with disabilities - Joan Burke, Minister of Human Resources, Labour and Employment, today released the Canada Newfoundland and Labrador Labour Market Agreement for Persons with Disabilities (LMAPD) Baseline Report 2004-2005. The document is a baseline report on the activities cost-shared with the federal government under the Canada-Newfoundland and Labrador Labour Market Agreement for Persons with Disabilities (LMAPD). (Full Story)

Northwest Territories:

December 6, 2004 - Labour Standards Consultation Period Extended - The consultation period regarding reforms to the Labour Standards Act has been extended until December 31, 2004, Minister of Justice and Attorney General Charles Dent announced today. "The Department of Justice wants to ensure that employers, employees and all residents have the opportunity to have input into changes made to the Act," said Minister Dent. (Full Story)

Prince Edward Island:

December 22, 2004 - Minister announces new appointments to the workers compensation board - The Honourable Elmer MacFadyen, Minister of Community and Cultural Affairs and Minister responsible for the Workers Compensation Act, announced today, appointments to the Workers Compensation Board. New appointments to the board include George MacDonald as Chair of the board and Margaret Stewart as a Worker Representative. Charlene McInnis will be reappointed to the board. The Hon. Jim Lee, Chair of the Workers Compensation Board since 1997, and Joyce McCardle, vice-chair and worker representative, will both retire from the board. (Full Story)

December 9, 2004 - Government announces innovative tax program to encourage business investment - Four new tax measures designed to stimulate investment and business growth in the province were announced today in the Prince Edward Island Legislature. The Progressive Tax Rebate Program will provide tax incentives to companies and individuals who invest in innovation, growth and development of targeted sectors across the province. (Full Story)

Ontario:

December 10, 2004 - New Employment Standards Law means increased protection for workers - The government is ending the 60 hour work week, giving employees genuine choice about working excess hours and preserving flexibility for businesses, Labour Minister Chris Bentley announced today. Workplaces must be in compliance with the new law, passed by the legislature December 9, 2004 when it comes into force on March 1, 2005. Until then, the current law applies. (Full Story)

December 14, 2004 - McGuinty Government hires new inspectors to reduce workplace injuries - As part of its plan to prevent 60,000 workplace injuries per year by 2008, the McGuinty Government today began training 100 new occupational health and safety inspectors, Labour Minister Chris Bentley announced. "This is an important day for health and safety in Ontario," said Bentley. "We plan to cut workplace injuries by 20 per cent in four years. (Full Story)

Saskatchewan:

November 5, 2004 - Labour minister confirms commitment to consult on additional hours - Labour Minister Deb Higgins reconfirmed that that the government intends to fully consult with all parties -- businesses, part-time workers, students and others -- once draft regulations on additional hours of work are completed. "This is a very complex issue with no simple answers," Higgins said. "We need to consult with everyone involved to see how these proposals would work and whether we can achieve our goal of creating better, full-time jobs for part-time workers." (Full Story)

December 1, 2004 - Youth internship opportunities available - The University of Regina has struck a unique partnership with the Government of Saskatchewan to provide internship opportunities for youth attending university in the province. Students in the University of Regina's Master of Public Administration (MPA) Program will be provided with an opportunity to gain public sector experience through internships in the provincial public service. (Full Story)

December 3, 2004 - Another Jobs Record Set - For the second straight month Saskatchewan has set a record for the number of people working in the province. Statistics Canada figures released today show 493,600 people employed in Saskatchewan in November (seasonally unadjusted figures). That beats the old record for November set two years ago and is a jump of 9,700 jobs from last November. (Full Story)

Yukon:

December 2, 2004 - Government supports workers with disabilities - Workers with disabilities are the focus of a new initiative by the Yukon government. A Workplace Diversity Employment Office within the Public Service Commission has been recently established by the Yukon government. Its goal is to increase the representation of persons with disabilities across all levels of government to a point where it mirrors the representation of working-age people with disabilities in the Yukon. (Full Story)

The current release of GrandMaster Suite (4.01.02) 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:

• Fixed amount option added to pay rates Multiplier option - If you have an earning that is defined to resolve as a multiple of another earning, you may now add a fixed amount to the result. This enhancement allows you to define an earning that firstly is a multiple of another and secondly has a premium added to it. This would be useful in situations where you have an evening overtime rate or 1.5 times the regular rate with a fixed premium amount added.
• Pay range support added to Payroll Condition Group - The Payroll Condition Group definition has been modified to support the selection of a pay range when defining a group by earning amounts. Prior to this change the group would determine its membership from the current pay selection only and did not allow you to select a range of sequences.
• Employee count added to sort sub-totals on Payroll Register Report - The Payroll Register Report has been modified to include Employees/Paid counts for each sort sub-total. This is useful to assist you when reconciling your report with your departments, etc.
• Increased support for Large Fonts users - Various GrandMaster Suite windows and dialog boxes have been modified in a continued effort to support our users who have opted to set their display driver to Large Fonts. This work will continue with the next several releases ensuring that these users do not encounter screens that improperly display text.
• Payroll Register printing zero balance accumulators - When multi-accumulators are set up for one employee, and if some of the accumulators do not have balance, the Payroll Register Report would display the line. With this release an accumulator must now have a balance in one of the total areas to be included in the report.
• Royal Bank EFT file has incorrect date - When you created an Electronic Funds Transfer file using the Royal Bank format, a bug in the program resulted in a 2005 date written to the file as 1905. This problem has been corrected with this release.
• Import of employee payrate information now supported - The GrandMaster Suite Payroll import options now include an option to import changes to employee earnings, deductions and accumulators. Further, you may also use this option to add earnings, deductions or accumulators to an employee. Where a date exists in the file for the imported item a duplicate will be created. When a date does not exist the current item will be overwritten with your changes. Additionally, this option will not allow you to import information that conflicts with current employee settings. For example, if you have Multiple Parameter information in your file and the employee earning setting is Use Set Rate the imported change will not be allowed and error will result.
• XML Magnetic Media filing now supported - The GrandMaster Suite Payroll year-end options now support the creation of magnetic media files for the CRA and Revenu Quebéc in the XML format. This change allows you to submit your year-end information via the internet.
  

Visit CanPay's News page and view the latest Release Notes for a complete listing of program changes.

The updated rates for CPP/QPP, EI and WCB have been announced for 2005. They are briefly discussed here along with some basic year-end procedures for each item.

2005 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 2005. 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 2004 CPP maximum.
• 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.
• Ensure that you have not adjusted the CPP contribution 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.

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 2005:

• 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 2005:

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

• No employee has contributed more than the 2004 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.