Chapter 6

Question 1

NEW EMPLOYEES:

Commencement Process

Answer 1

Many companies have a commencement process in place to welcome new employees to the organization

This process usually contains information about the work environment, payroll, benefits, culture, history, the organizational chart and anything else relevant to working in the new organization

Question 2

The documents contained in the package are typically a combination of:

Answer 2

organization-specific forms, such as personal information forms

government forms, such as the federal and provincial/territorial Personal Tax Credits Return – TD1

benefit forms, such as insurance enrollment forms

Question 3

Personal Information Form

Answer 3

Name/Address
Date of Birth – for CPP
SIN – for reporting to CRA
Personal exemptions – TD1 and provincial TD1
Rates of pay – OT, shift premium, vacation, etc
Allowances to be paid
Deductions – court, CRA, retirement plans, union dues, medical premiums, life insurance premiums, charities, social clubs, etc

Question 4

Additional Information needed for payroll

Answer 4

Pay cycle information
If hourly - # of hours worked, including approved overtime, shift information, holiday time worked
If salary, any changes to normal work schedule
Any vacation time taken (if accrued)
Time taken - paid or unpaid (type of leave)
Any Allowances paid
Any non-cash earnings such as gifts
Layoff or termination information(if applicable)
Any taxable benefits – cash or non-cash

Question 5

Difference between cash and non-cash taxable benefits

Answer 5

Cash taxable benefits are added to an employee’s earnings and are part of the their take home pay, whereas a non-cash taxable benefit is only a value added to the employee’s pay for the purpose of calculating CPP and income tax deductions.
EI premiums do not include non-cash taxable allowances or non-cash taxable benefits.

Question 6

Benefit Enrolment Forms

Answer 6

organizations that offer benefits, such as group insurance or registered pension plans, will include enrollment forms for these plans in the commencement package

Question 7

Union Membership Application

Answer 7

in workplaces with a collective agreement in place, employees covered by the agreement are required to pay union dues

the new employee will be required to sign a union membership form or application, included in the commencement package, authorizing the deduction

Question 8

Confidentiality Agreement

Answer 8

a legally enforceable agreement preventing present or past employees from disclosing commercially sensitive information belonging to the employer to any other party

Question 9

Calculation of Net Pay

Answer 9

1. Gather all information for the payroll processing.
   Static information for employee
   Pay Cycle specific data for employee
2. Calculate taxable benefit amounts needed for calculation of pensionable and insurable earnings and taxable income
3. Calculate Gross Earnings.
   Wages/salaries, taxable allowances, non-taxable allowances, vacation pay
4. Calculate Pensionable Earnings:
   Gross Earnings
   less non-taxable allowances
   plus taxable benefits
5. Calculate Insurable Earnings:
   Gross Earnings
   less non-taxable allowances
6. Calculate Canada Pension Plan Contributions
   Pensionable Earnings
   less pay cycle exemption
   times 4.95%
7. Calculate Employment Insurance Premiums
   Insurable Earnings times 1.88%.
8. Calculate Gross Taxable Earnings
   Gross Earnings less non-taxable allowances plus taxable benefits
9. Calculate Net Taxable Earnings
   Gross Taxable Earnings
   less:
   
   • Employees deductions for Registered Pension Plan,
     - Registered Retirement Savings Plans,
     - Union dues
     - Other Canada Revenue Agency approved amounts
10. Calculate Federal Income Tax from tables or PDOC
11. Calculate Provincial Income Tax from tables or PDOC.
12. Calculate Total deductions.
13. Calculate Net Pay.