Contents:

• Welcome
• What's New
• GrandMaster Update

Welcome!

January 2006 - 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.

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 2, 2005 - 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, 2006, to March 31, 2006. (Full Story)

December 22, 2005 - CPP Benefit Rates to Increase on January 1, 2006 - Social Development Canada today announced the latest benefit rates for the Canada Pension Plan (CPP) and Old Age Security (OAS). Canadians already receiving CPP benefits as of December 2005 will get an increase of 2.3 percent on January 1, 2006. Canada Pension Plan benefits are adjusted once a year, in January. Increases are based on changes in the Consumer Price Index (CPI), the cost-of-living measure used by Statistics Canada, over a 12-month period. (Full Story)

December 2005 - Internet File Transfer (XML) - As of January 2006, Internet File Transfer (XML) will be available for the following information returns: Originals and amended - T1204, T4, T4A, T4A-NR, T4RIF and T4RSP; Originals only - T4E. You may also file multiple returns within a single submission (maximum 610 Kb). Clients will require a payroll Business Number (RP) and Web Access Code (WAC) when filing these returns to CRA. (Full Story)

December 11, 2005 - EI Pilot Project to Increase Allowable Earnings - Effective December 11, 2005, individuals living in one of the 23 EI economic regions could see their EI benefits increase by allowing them to earn a greater amount while working part-time and receiving EI benefits. A new 3-year pilot project increases the amount you can earn while working part-time and receiving EI benefits by allowing you to earn the greater of $75 or 40 % of weekly benefits. (Full Story)

December 11, 2005 - EI Pilot Project for New Entrants and Reentrants - Effective December 11, 2005, individuals living in one of the 23 EI economic regions could qualify for regular benefits with less insurable hours. A new 3-year pilot project allows you to qualify for regular benefits with a minimum of 840 hours instead of 910 hours (Full Story)

Alberta:

November 15, 2005 - 2006 WCB Premium Rates Finalized - For the second year in a row, Alberta employers will see a reduction in their average premium rate. The rate is decreasing to $1.57 per $100 of insurable earnings in 2006 from $1.83 in 2005. Guy Kerr, president and CEO of the Workers’ Compensation Board (WCB) – Alberta, also noted a decrease in average claim duration of 14 per cent to 34.4 days; A reduction of the lost time claim rate to 2.4 per 100 workers; and the restoration of WCB’s required funding levels -- an achievement that reduced the 2006 premium rate by 23 cents. (Full Story)

British Columbia:

December 5, 2005 - Annual Canada Revenue Agency notices mailed - As tax season arrives, annual Canada Revenue Agency (CRA) notification letters will be mailed to British Columbians who have overdue accounts with the Province. These annual letters from the CRA, to be mailed between Dec. 5, 2005 and Jan. 11, 2006, remind customers of their debt and encourage them to contact Revenue Services of British Columbia to discuss or settle it, or to learn about payment options. (Full Story)

December 14, 2005 - WorkSafeBC launches new web site - WorkSafeBC today announced the launch of its new web site designed to provide employers and workers with easier access to health and safety, compensation, rehabilitation, and insurance information. The site, www.worksafebc.com, has been updated and enhanced with a new look and structure that enables users to find the resources they need more quickly and easily than ever before. The site includes information for employers, workers, and healthcare providers, including a host of online business tools that allow users to do business with WorkSafeBC 24 hours a day, seven days a week. (Full Story)

December 13, 2005 - WorkSafeBC awards $500,000 in research grants - WorkSafeBC has announced the award recipients from its fifth annual research competition — designed to fund independent, scientific research on occupational health and safety and workers' compensation issues. This year, WorkSafeBC has awarded a total of $499,799 in funding to eight new research projects aimed at transforming societal attitudes towards workplace health and safety, and better recognizing and preventing occupational diseases in B.C. (Full Story)

November 25, 2005 - Open bid first step to employment success for clients - Income assistance clients in British Columbia will soon have a better chance of employment success. This follows the posting of a Request For Qualifications (RFQ) for private sector employment providers, non-profit community agencies and colleges to deliver a whole range of new employment services. "We've seen major success in our employment programs, helping more than 43,000 income assistance clients into good jobs. As a result of this accomplishment, the profile of our caseload has changed considerably," said Employment and Income Assistance Minister Claude Richmond. (Full Story)

Manitoba:

December 28, 2005 - Workers Compensation Act Amendments Come Into Effect in New Year - Amendments to improve benefits, increase prevention, and strengthen accountability and governance measures will come into effect Jan. 1, Labour and Immigration Minister Nancy Allan announced today. "We undertook the long-overdue modernization of the Workers Compensation Act with the support and input of Manitoba’s workers and employers," said Allan. "The finished product provides a framework for improved benefits, increased prevention strategies and enhanced firefighter protection as well as a greater level of accountability." (Full Story)

December 22, 2005 - Manitoba Announces Two-Stage Increase To Minimum Wage - Manitobans and Manitoba businesses will receive a $48-million tax break effective Jan. 1, while Manitoba’s minimum wage will be raised in two stages beginning with a 35-cent increase on April 1, 2006, and a 40-cent increase on April 1, 2007, Labour and Immigration Minister Nancy Allan and Finance Minister Greg Selinger announced today. (Full Story)

December 2, 2005 - Manitoba Unemployment at Lowest Level in 30 Years - Manitoba’s unemployment rate dropped to 4.2 per cent in November -- the second largest drop in the country and better than the national average, Statistics Canada reported today. Manitoba continues to have the second-lowest unemployment rate in the country after 4.1 per cent in Alberta. The report adds that an additional 7,000 new private-sector jobs were created in the last 12 months. Total employment increased by 3,100 in November. (Full Story)

December 16, 2005 - SAFE Health Care Awareness Campaign Launched - SAFE Health Care was launched today as an injury and illness prevention strategy for Manitoba’s health care employees, aimed at providing workers in the field with a health care-specific message promoting a culture of health and safety in the workplace. SAFE Health Care is a joint initiative of The Workers Compensation Board of Manitoba (WCB), Winnipeg Regional Health Authority (WRHA) and Manitoba Health, in cooperation with the Regional Health Authorities of Manitoba. (Full Story)

November 24, 2005 - Average assessment rates drop in Manitoba - The average assessment rate Manitoba employers pay for workers compensation coverage will drop from $1.70 to $1.68 effective January 1, 2006. On average, Manitoba employers will pay $1.68 per $100.00 of their assessable payroll to the WCB in return for injury 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 risk of their industry and their individual injury experience. (Full Story)

New Brunswick:

December 15, 2005 - Minimum wage to increase Jan. 1, 2006 - An increase to the provincial minimum wage will take effect Jan. 1, 2006, Training and Employment Development Minister Margaret-Ann Blaney announced today. The wage rises to $6.50 per hour from the current $6.30, and further increases are planned to bring it up to $7.10. "This 20-cent-per-hour increase is consistent with the government's platform commitment to raise the provincial minimum wage for workers while respecting the needs of employers," Blaney said. "This will fulfill our commitment in the speech from the throne, and will benefit thousands of New Brunswickers. (Full Story)

December 28, 2005 - Students receive increase with this year's SEED program - Students will receive an increase in the hourly wage offered through the Student Employment and Experience Development (SEED) program this year. The provincially funded SEED program provides summer jobs to eligible students in provincial government departments and agencies, municipal and First Nation offices, and non-profit organizations. This year, SEED will provide a wage supplement of $6.70 per hour to help eligible students gain work experience while earning a living during the summer months. Employers are encouraged to top up the wage whenever possible. (Full Story)

December 30, 2005 - Provincial personal income tax indexed for 2006 - Effective Jan. 1, 2006, all provincial personal income tax brackets, personal nonrefundable credits and low-income tax reductions will be adjusted by 2.2 per cent, Finance Minister Jeannot Volpé has announced. In addition to full indexation of the New Brunswick provincial personal income tax system, the government's Prosperity Plan includes a commitment to continue to reduce personal income taxes to reward success and help recruit and retain highly qualified people to invest, work and live in New Brunswick. Since 1999, personal income taxes have been reduced by more than 10 per cent. (Full Story)

December 2, 2005 - 4,500 more New Brunswickers working in November - There were 4,500 more New Brunswickers working in November, Training and Employment Development Minister Margaret-Ann Blaney reported today. The increase accounted for a significant drop in the seasonally adjusted unemployment rate, which had stood at 9.5 per cent. Statistics Canada figures released today show that the seasonally adjusted unemployment rate stood at 9.5 per cent in November, which was down 1.5 percentage points from the previous month when it had stood at 11 per cent, and down 0.3 percentage points from last year when it had stood at 9.8 per cent. (Full Story)

Newfoundland and Labrador:

December 19, 2005 - 25 cent increase in the minimum wage as of January 1, 2006 - Paul Shelley, Minister of Human Resources, Labour and Employment (HRLE) would like to remind businesses and workers in the province that the minimum wage will increase from $6.25 to $6.50 an hour effective Sunday, January 1, 2006. This is the second of four scheduled increases. The next 25 cent raise is scheduled for June 1, 2006, followed by another 25 cents on January 1, 2007. The decision to increase the minimum wage followed an extensive review that was completed in 2004 and a consultations process that received over 150 submissions. (Full Story)

December 13, 2005 - Labour force survey results point to a strengthening economy - Paul Shelley, Minister of Human Resources, Labour and Employment (HRLE), is pleased with the results of Statistics Canada’s latest Labour Force Survey that show an employment increase in Newfoundland and Labrador of 3.1 per cent from November 2004 to November 2005. Employment in November 2005 was 214,200, an increase of 3.1 per cent compared to November 2004, while the labour force increased to 251,000, an increase of 1.8 per cent compared to November 2004. (Full Story)

December 12, 2005 - Workers’ Compensation Review Committee releases consultation paper and schedule - The committee reviewing the workers’ compensation system today announced the schedule for province-wide public consultations and released a consultation paper entitled Finding the Balance. The review committee has identified a broad base of consultation sites to provide the public with an opportunity to voice their opinions. Beginning January 9, 2006, the committee will visit 11 locations around Newfoundland and Labrador to hear presentations from the public. Written submissions should be submitted to the committee one week prior to a scheduled session. (Full Story)

Nova Scotia:

December 7, 2005 - Judges' Salaries and Benefits Report Released - An independent tribunal has authorized an increase in judges' salaries of 3.4 per cent a year over three years. The Provincial Judges' Salary and Benefits Tribunal Report, 2004-2007 is available on the government website at www.gov.ns.ca/just. (Full Story)

December 21, 2005 - Nova Scotia Releases Health Workforce Action Plan - Nova Scotia has reached another milestone in the plan to ensure there will be enough health-care workers to care for Nova Scotians in the years ahead. Health Minister Angus MacIsaac released Nova Scotia's Health Human Resource Action Plan, today, Dec. 21, fulfilling a commitment made at the 2004 First Ministers' Meeting. (Full Story)

Ontario:

December 8, 2005 - New Law To End Mandatory Retirement Will Allow Ontarians To Decide When To Retire - Ontario's new law to end mandatory retirement will provide greater fairness and choice for workers aged 65 and older, Labour Minister Steve Peters announced today. "Ending mandatory retirement is the right thing to do. It provides choice and removes discrimination in the workplace against older workers without
undermining existing rights to pensions, early retirement and benefits plans," said Peters. (Full Story)

December 2005 - WSIB Operational Policy and Employer Classification Manual Changes - The Benefits and Revenue Policy Branch of the Ontario Workplace Safety and Insurance Board has announced several policy changes, effective January 1, 2006. Please visit the link below to learn more about these updates. (Full Story)

Saskatchewan:

December 21, 2005 - Safe Worker Award Established - The Saskatchewan WCB is providing the opportunity for employers and employees to recognize someone who has made a contribution to safety in the workplace. WorkSafe Saskatchewan, in partnership with the Saskatchewan Federation of Labour and the Saskatchewan Safety Council, announced a new Safe Worker Award to recognize the contribution workers make to workplace health and safety. (Full Story)

November 28, 2005 - Firefighters Receive Increased Protection - Legislation expanding workers' compensation protection of full-time,professional fire fighters has been introduced in the Saskatchewan legislature. Under The Workers' Compensation Amendment Act, 2005, ureter, colorectal, and testicular cancer, as well as lung cancer in non-smokers and heart injury occurring within 24 hours of an emergency response, are presumed to be occupational diseases for Saskatchewan's full-time, professional fire fighters, unless there is evidence to the contrary. (Full Story)

The current release of GrandMaster Suite (5.03) incorporates a number of changes to make it even easier to use the program and perform your payroll tasks. 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 2006. Your Provincial and Federal TD1 amounts will update automatically upon calculation of your first payroll of 2006.
• EFT Remittance Reports now available - The Electronic Funds Transfer file process has been modified and enhanced to provide you with remittance reports for withholding amounts. When your EFT file includes amounts for the Receiver General, Revenu Québec, Worker's Compensation and Provincial Health you have the option to print a report that will summarize the remittance amounts with a payable due date.
• TD1 and PD1 utility programs updated with 2006 values - With this release the utility programs that reset the employee TD1 or PD1 amounts to the base amount have been adjusted to the 2006 rates. When you run the utility program UTFIXTD1 the employee federal TD1 exemption will be set to the 2006 base of $9039.00. The utility program UTFIXPD1 will update all employees with the provincial personal exemption to the 2006 base amount based on their tax province setting.
• Added support for the Québec Parental Insurance Plan (QPIP) - Beginning in January 2006 all Québec employees must contribute to the Québec Parental Insurance Plan (QPIP). To enable the deduction and benefit to be included in your payroll calculation you must update all applicable earnings and benefits to indicate that the calculated amounts are QPIP Insurable.
• Autoplay menu includes updated CRA Forms and Guides - The Autoplay menu has been updated with the most current forms and guides available from the CRA. However, at the time of this release the CRA had not yet posted the 2006 Federal and Provincial TD1 forms and worksheets. Once the current TD1 documents are made available we will include them in a future release.
• Input Worksheet added to Reports menu - With this release we have added an Input Worksheet Report that may be used to ease the data entry process. This report allows you to write down employee hours, earning and deduction changes as well as employee personal information changes. Then at data entry the data entry personnel will simply refer to this report when entering information into the database. This report would be useful when you need to get employee time and information from the field then transpose this information into the payroll.
• EFT withholding tax payment support added - We have added the option to create EFT transactions for the CRA and Revenu Québec withholding taxes, WCB and Provincial Health payments. What this new functionality will do for you is create a transaction to an account that you set up as a holding account for these amounts. Once the EFT is completed and processed by the bank your withholding amounts and the WCB and/or Provincial Health benefit amounts will be placed in an account that you would draw the applicable payments from when paying your remittances. This may be useful by ensuring that the remittance amounts are set aside each pay cycle to expedite the remittance process. To enable this process you would need to add account information to the WCB and Provincial Health settings found in the Payroll menu along with the Canada Revenue Agency EFT and Revenu Québec EFT settings located in the Payroll/Electronic Funds Transfer menu. Note: When you use this option the EFT does not transfer the remittance amounts directly to the government agencies. This option simply transfers the remittance amounts to holding accounts you have set up to draw your remittances from when they are due.
• T4 Edit dialog box now allows employee selection - The T4 Edit dialog box has been modified to include an option to select an employee from the list. This is useful when you need to edit an employee record that is not the next or previous employee record in the database. Prior to this change you would have to exit the Edit dialog and select the employee from the previous screen. With this change you are now able to navigate throughout your T4 file employee records from within the Edit process.

• • •

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

Link Opportunity! - If you are a CanPay customer wanting more exposure for your Website, please send us a 50-word description along with a copy of your logo. We'll add you to our Customer Links page and create a link directly to your website. It 's a great way to expose your goods and services to the community. Logos should be a maximum of 160 x 70 pixels and provided in the .gif or .jpg format. Send your e-mails to admin@canpay.com.

The updated rates for CPP/QPP, EI and WCB have been announced for 2006. They are briefly discussed here along with some basic year-end procedures for each item.

2006 Canada/Quebec Pension Plan

The Canada Revenue Agency (CRA) has released the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) rates for 2006. 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 2005 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 CRA 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 2006:

• 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 2006:

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

• No employee has contributed more than the 2005 EI maximum.
• Ensure that you have not adjusted the EI premium amounts you reported on the T4 if you over-deducted employee contributions. The CRA will credit the employees with the over-contribution when they file their tax return.