Year-End Tax Tips for Canadian Employers

Every business owner and tax professional knows that the changing of the year also marks important deadlines and rules regarding taxes and employment reporting. For employees, it means understanding how tax law changes, and there have been many in Canada this year, as well as the U.S.

“The Canadian Payroll Association (CPA) is dedicated to helping payroll, finance and human resources professionals have the smoothest year-end possible,” said Steven Van Alstine, Vice President, Education for the Canadian Payroll Association. “This is crucial to mitigating risk and avoiding compliance audits and penalties.”

The CPA has provided a list of 2013 tax year reporting requirements and compliance measures now in effect. Payroll practitioners wanting more information can enroll in the CPA's popular one-day 'Year-end' seminar held across Canada. .

Taxable Benefits Clarification
AD&D and Critical Illness Insurance Premiums: The Canada Revenue Agency (CRA) clarified that employer-paid AD&D and Critical Illness insurance premiums are a taxable benefit to employees, effective January 1, 2013. Education Benefits: Education benefits to non-employees (for example, family members) are not included in the taxable income of the employee's taxable income. Social or Athletic Club Memberships: Employer-paid memberships to such facilities are not considered a taxable benefit if it is principally for the employer's advantage. Canada Pension Plan Contributions and Form CPT30
Effective January 1, 2012, CPP contributions became mandatory for all employees between 60 and 65, even for individuals previously exempted because they were receiving their Canada Pension Plan (CPP) benefits. Employees age 65-70 who are receiving a CPP or Quebec Pension Plan (QPP) benefit can opt out of continued CPP contributions if they file a CPT30 form with the Canada Revenue Agency and their employer.

New Benefit for Parents of Critically Ill or Injured Children
A new Employment Insurance (EI) benefit became available on June 9, 2013, which could provide up to 35 weeks of leave to parents who are absent from work to provide care or support to their critically ill or injured children.

Quebec RL-1 Box G Reporting Pensionable Earnings
The 2013 QPP contribution rate is higher than the CPP rate, creating some administrative issues for employers that transfer employees in and out of the province of Quebec.

Ontario Employer Health Tax
Pending the passing of legislation, the 2014 annual exemption of the Employer Health Tax (EHT) for organizations with an Ontario payroll will increase from $400,000 to $450,000. The exemption would be eliminated for private-sector employers with an Ontario payroll of $5 million or more.

CRA Web Access Code
For those who file year-end slips electronically, a web access code (WAC) provided in 2012 is valid for all future filings. Employers can retrieve a lost WAC by contacting the CRA.

Year-end slips and summaries must be filed with the CRA or Revenu Québec on or before February 28, 2014. There is still time to enroll in the CPA's Year-end seminars, offered in select cities through January 2014.