The CRA has a series of interpretive articles called "CPP/EI Explained". These
articles are intended to make workers and employers more aware of matters
relating to the CPP and EI by providing them with information that is accessible
and easy to understand.
The CPP/EI Rulings Program is responsible for providing clients with rulings that
indicate whether a worker is an employee or is self-employed, and whether or not
that worker's employment is pensionable for Canada Pension Plan (CPP) purposes
and/or insurable for employment insurance (EI) purposes. A ruling may also
indicate the amount of pensionable or insurable earnings a worker has and the
number of insurable hours an employee has in insurable employment
What are the current payroll rates?
The current CPP rate remains at 4.95%, with maximum pensionable earnings increasing to $55,300.
EI Rate has been decreased to 1.63% in 2017 federally (from 1.88% in 2016), with maximum insurable earnings increased to $51,300.
***On September 11, 2014, Minister of Finance Joe Oliver announced the introduction of the new Small Business Job Credit which is expected to save small businesses more than $550 million over the next two years.
The Small Business Job Credit will effectively lower small business' Employment Insurance (EI) premiums from the current legislated rate of $1.88 to $1.60 per $100 of insurable earnings in 2015 and 2016. Any firm that pays employer EI premiums equal to or less than $15,000 in those years will be eligible for the credit. Almost 90% of all EI premium-paying businesses in Canada will receive the credit, reducing their EI payroll taxes by nearly 15%
The Canada Revenue Agency will automatically calculate the credit on a business' return, ensuring no new paper burden will be imposed on business owners.
In addition, all employers and employees will benefit from a substantial reduction in the EI premium rate in 2017 when the new seven-year break-even rate-setting mechanism takes effect. This will ensure that EI premiums are no higher than needed to pay for the EI program over time.***
What is the Minimum wage for Ontario, and the rest of Canada?
Ontario's minimum wage was increased to $11.40/hr as of October 1, 2016 and will go up to $11.60 on October 1, 2017, $14 on January 1, 2018 and $15 on January 1, 2019. For complete details follow this link: minimum wage in Ontario
For past and present payroll rates for Ontario and the rest of Canada follow this link: Past and present minimum wages in Canada.
Workplace Safety and Insurance Board Premium Rate
The maximum insurable earnings ceiling for 2016 is $88,000 (an increase of 3.3% from $85,200 in 2015).
Employers Health Tax
Effective January 1, 2014, the amount of annual Ontario payroll that may be exempt from Employer Health Tax (EHT) is increased from $400,000 to $450,000. To better target EHT relief, the exemption is eliminated for private sector employers with annual Ontario payrolls over $5 million. Registered charities, including those with payrolls over $5 million, continue to be eligible for the exemption. Learn more
In general, eligible employers are exempt from Employer Health Tax (EHT) on the first $450,000 of total Ontario remuneration. This exemption will be adjusted for inflation every five years using the Ontario Consumer Price Index. Eligible employers who are associated with other employers must allocate the exemption among members of the associated group. Click here for the Associated Employers Exemption Allocation Form. One employer in the group must complete this form on behalf of the whole group and submit it to the ministry with its annual return. Public sector employers are not eligible for the tax exemption.
The exemption is eliminated for eligible employers with total Ontario remuneration over $5 million. The $5 million threshold also applies to the combined annual Ontario payrolls of an associated group of employers.
Automobile - Reasonable per kilometer allowance
If you pay your employee an allowance based on a per-kilometer rate that we consider reasonable, do not deduct CPP contributions, EI premiums, or income tax.
For 2017, the reasonable allowance rates are:
$0.54 per kilometer for the first 5000 kilometers driven; and
$0.48 per kilometer driven after that.
In the Northwest Territories, Yukon, and Nunavut, there is an additional $0.04 per kilometer for travel
There is no longer a write-off for casual labour.
The rules for who must have WSIB coverage have changed.
Effective January 1, 2013, mandatory WSIB coverage is required for nearly everyone working in the construction industry, including owners.
For complete details visit www.needwsibcoverage.ca/
T4’s are to be given to employees on or before the last day of February.
If you do not, you may be subject to a penalty. The penalty for failing to distribute T4 slips to a recipient is $25 per day for each such failure with a minimum penalty of $100 and a maximum of $2,500.
If T4 slips are returned as undeliverable, we suggest that you retain the slips with the employee's file.
You must also keep a copy of the T4 slips and the T4 summary for your records.