Save
Busy. Please wait.
Log in with Clever
or

show password
Forgot Password?

Don't have an account?  Sign up 
Sign up using Clever
or

Username is available taken
show password


Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account.
Your email address is only used to allow you to reset your password. See our Privacy Policy and Terms of Service.


Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
focusNode
Didn't know it?
click below
 
Knew it?
click below
Don't Know
Remaining cards (0)
Know
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

Chapter 3

Payroll Fundamentals 2

TermDefinition
Source deductions held from employees (3) CPP contributions, EI premiums, Income tax
Source deductions held from employers (2) CPP contributions and EI premiums
Adjustment done after last payroll, but before final remittance due can be made by the due date, no interest or penalties as remittance would be made on time.
Adjustment done after final remittance any amounts due to the CRA may attract interest and penalty costs.
Adjustments made to payroll records must adjust remittance spreadsheet, must be the same totals for the T4 or T4A slips.
Credit balance on PD7A doesn't total T4 or T4A slips balance on the account will be carried forward to the next year.
PD7A balance includes (3) 1. all amounts plus interest owing from pervious year 2. remittances for previous tax year, related to tax slips to be filed by END OF FEB. 3. remittances for current year
Employees overall payroll (8) 1. Gross taxable income 2. CPP earnings 3. EI earnings 4. Income tax 5. CPP contributions 6. EI premiums 7. Provincial health care levies 8. WC assessable earnings/yr. end adjustments
Taxable Benefits included in employee income
Taxable Benefit Adjustments must be done before the last payroll is processed for tax year.
Pension Adjustments (PA)/Pension Credits the measure of the benefit that an individual earns in a year for a pension plan (RPP) or deferred profit sharing plan (DPSP).
PA benefits - also known as "the member's total pension credits" (CRA) - larger the PA, the smaller the RRSP contribution limit amount
Benefit Entitlement the portion of a member's pension that is considered to have accumulated during the year (Defined benefit pension plans only)
Pensionable earnings types of earnings, as defined in the plan's text, used to calculate pension benefits earned.
Reallocated forfeitures amount a member ceased to have rights to under a deferred profit sharing plan (DPSP) or defined contribution plan (DC). Forfeited upon termination of employment.
Pension credit reflects the value of the benefit a member earns under a deferred profit sharing plan, a contribution plan, or defined benefit provision of a RPP plan.
PA Formula used to calculate a pension credit for defined benefit plan. = (9 x benefit entitlement) - $600.00
Factor of 9 limit on contributions is 18% of earned income. Max rate is 2% of compensation (9 x 2 = 18)
$600.00 offset based on compensation for variances in ancillary benefits that occur from plan to plan (inflation protection, early retirement, survivor and disability benefits).
$1000.00 offset for pension credits for years between 1990 - 1996
Vesting a member of a pension plan has become entitled to the full or a partial amount of the employer's contributions.
Additional Voluntary Contributions (AVC) employee makes extra contributions to increase the amount of the pension they receive from the plan. No direct effect on the employer's cost.
Calculation: Defined Contribution Pension Plan (or Money Purchase) Employer contributions + Employee contributions + Reallocated forfeitures + Additional voluntary contributions (AVC)
Calculation: Defined Benefit Pension Plan (9 x Benefit Entitlement) - $600.00
Calculation: Deferred Profit Sharing Plan Employer contribution + Reallocated forfeitures
Calculation: Combination Plan Total of all pension credits for each component
T4: Employee contributions RPP are tax deductible; reported in Box 20 RRSP not reported by payroll; tax receipt will be issued
T4: Employee and Employer contributions (PAs) Defined contribution pension plan; reported in Box 52
T4: Employer contribution to employees RRSP Reported in Box 14 and in Other Information area using code 40 as they are cash taxable benefit; subject to CPP and EI
T4 - Statement of Remuneration Paid (4) Issued by END OF FEB. 1. statutory deductions for C/QPP, EI, QPIP, and Income tax 2. remuneration $500 or over 3. amount provided for Group term life insurance 4. amount provided of security option benefits
T4 Summary - Summary of Remuneration Paid form submitted by the employer electronically or paper. Paper copies must include a copy of the T4 slip (copy saved for files).
Completing T4 Summary (5) 1. amounts reported in Canadian dollars/cents 2. for each payroll account No. and attach to font of the T4 slip 3. amounts must agree with totals on the T4 slip 4. Enter tax year related 5. Enter payroll account No., name, and address of employer
T4A - Statement of Pension, Retirement, Annuity and Other Income report types of income not reported on T4 slip - Pension or superannuation, lump-sum payments, self-employed commission, patronage allocations, RESP, Grants, death benefits, wage-loss, partner/shareholder benefits, etc.
T4A must be issued if (4) - payment more than $500.00 - income tax deducted from payment on T4A - over $50 paid for retirees of a Group term life insurance - over $25 paid by issuer of multi-employer benefit plan and provides taxable benefits to current/former employees
T4A Guidelines (5) 1. prepare for each CRA payer's account No. 2. complete in alphabetical order by surname 3. amounts reported in Canadian dollars/cents 4. no negative amounts 5. headings of the boxes cannot be changed
T4A Summary - Summary of Pension, Retirement, Annuity and Other Income Issued by END OF FEB. form submitted by employer electronically or paper. Paper copies must include a copy of T4 slip (copy saved for files).
T4A Summary Guidelines (3) 1. amounts reported in Canadian dollars/cents 2. submit for each CRA payroll account No. 3. amounts must agree with totals on the T4 slip
Pensionable and Insurable Earnings Review (PIER) a CRA document produces as a result of an audit check performed by CRA after receipt of T4 Summary.
Purpose of the audit check to identify any deficiencies of CPP and EI.
CRA checks for deficiencies by comparing pensionable and insurable amounts reported on T4 slips with required CPP or EI, based on calculations.
If there is a difference between CRA calculations and T4 amounts employer will receive a PIER report. Respond by the deadline. Must remit amounts owed for employee and employer portions.
Common reporting errors amounts not correctly reported in Box 24 (EI), 26 (C/QPP), 28 (Exempt C/QPP, EI)
CPP Deficiency (5) 1. missed earnings in Box 14, reported in Box 26 2. taxable benefits/allowances added after last pay of yr. 3. chq issued with no CPP deductions 4. employee set up incorrectly 5. Box 14 includes non-cash taxable benefit, no remuneration pd in period
Filing methods for information returns (3) 1. Internet file transfer 2. T4 Web forms 3. Paper
Employees receive T4 by (3) 1. on copy electronically 2. two copies by mail 3. two copies in person
Issuing T4 electronic (3) 1. is accessible through a secure electronic portal 2. secure site for printing the T4 slip is available 3. is an option to receive paper copies upon request
2 Copies of T4 Slip (4) 1. electronic conditions don't apply, unless consent has been given 2. employee requested 3. employee is on extended leave or no longer an employee 4. employee cannot reasonable access electronically
Electronic amend or cancel slips (5) 1. must include amended and cancel slips only - no original slips 2. summary and transmittal must indicate slips amended - not original 3. file format must be XML 4. file name must be XML 5. filer No. must be valid
Paper amend slips (3) Before filing: prepare a new slip After filing: prepare a new slip, write AMENDED on the top 1. file copy to CRA with letter explanation and payroll account No. 2. two copies sent to employee ASAP 3. retain a copy in employers file
Paper cancel slips issue a photocopy of the original form clearly marked CANCELLED to the CRA. Issue two copies to the employee.
Replacing slips provide a copy clearly marked DUPLICATE.
Created by: Moorebaier
Popular Accounting sets

 

 



Voices

Use these flashcards to help memorize information. Look at the large card and try to recall what is on the other side. Then click the card to flip it. If you knew the answer, click the green Know box. Otherwise, click the red Don't know box.

When you've placed seven or more cards in the Don't know box, click "retry" to try those cards again.

If you've accidentally put the card in the wrong box, just click on the card to take it out of the box.

You can also use your keyboard to move the cards as follows:

If you are logged in to your account, this website will remember which cards you know and don't know so that they are in the same box the next time you log in.

When you need a break, try one of the other activities listed below the flashcards like Matching, Snowman, or Hungry Bug. Although it may feel like you're playing a game, your brain is still making more connections with the information to help you out.

To see how well you know the information, try the Quiz or Test activity.

Pass complete!
"Know" box contains:
Time elapsed:
Retries:
restart all cards