PAYROLL TIP - 2016
If an employer directly reimburses an employee for automobile costs that are associated with the employee’s own automobile, such as gas, repairs and insurance, these reimbursements will be considered a taxable auto allowance and will be subject to all applicable statutory deductions: federal and provincial income tax, Canada Pension Plan (CPP), Quebec Pension Plan (QPP), Employment Insurance and Quebec Parental Insurance Plan (QPIP). If the CRA deems the allowance based on a per-kilometer rate reasonable, do not deduct CPP, QPP, EI and QPIP.
If the employer makes the same payments on behalf of the employee to the applicable organization, then the payments will be subject to federal and provincial income tax and CPP/QPP only, as the amounts will not be deemed as cash income to the employee.
In both instances, these amounts should be reported in Box 14 and Code 40 of the T4, as well as Box A and L of the RL-1 (QPIP if employed in Quebec).
Employers who did not file their CSST (CNESST effective 2016) Statement of Wages for 2015 could face penalties
Quebec employers who are required to remit to the CNESST Commission des normes, de l'équité,de la santé et de la sécurité du travail are also required to complete and remit the Statement of Wages no later than March 15th every year for the prior year’s payroll and remittances.
Employers who have failed to do so for 2015 have received notifications from the CNESST (CSST) that may have included penalties of up to15% on the remittance amounts paid. Employers who have received these notifications must ensure that their Statement of Wages for 2015 have been filed.
Employers should also contact the CSST in order to address the penalty notices they received as a result of not completing the Statement of Wages
SERVICE CANADA EXTENDS DEADLINE FOR DISCONTINUANCE OF CERTAIN ROE WEB FORMATS
Service Canada has extended the deadline for discontinuance of certain ROE Web formats until August 31, 2016. Service Canada previously announced that the following ROE web formats will be discontinued on March 31, 2016:
- 27 Week Flat file
- 53 Week Flat file
- 53 Week XML file version 1.0
- 27 Week Online Form
However, due to employers’ challenges with meeting this deadline and a lack of awareness by (mostly smaller) employers, Service Canada has extended the deadline to August 31, 2016.
Effective September 1, 2016, (instead of April 1, 2016) Service Canada will only be accepting the following new ROE Web formats:
- 53-Week Online Form
- 53-Week XML Payroll Extract File XML Version 2.0
- 53 Week Assistant Online form
The specifications for version 2.0 of the XML Payroll Extract file can be found in Appendix D of the User Requirements for the Record of Employment on the Web available on the Government of Canada’s website.
Employers may also access Service Canada's announcement related to the deadline extension.
The CPA commends Service Canada for extending this deadline and recognizing employers as key stakeholders in this decision.