Test 3 Flashcards
Remitter types
New or regular remitter
- Less than 25000
- We have to receive your deductions on or before the 15th day of the month after the month you paid your employees.
Quarterly remitter
- Less than 3000
- 15th day following each quarter
Accelerated remitter threshold 1
- $25,000 to $99,999.99
- Period 1 : Day 1 - 15 and paid by 25 (each month)
- Period 2: Day 16 - end and paid by 10th
Accelerated remitter threshold 2
- 100000+
- the 1st through the 7th day of the month;
- the 8th through the 14th day of the month;
- the 15th through the 21st day of the month;
- the 22nd through the last day of the month.
- Paid 3 days later
3 Types of Non-regular payments
retroactive payments
bonus payments
vacation payments
Types of retroactive pay
Retroactive Adjustment
Retroactive Increase
Retroactive Payment
What are the 3 general methods of calculating commissions?
Straight Percentage of Sales
Fixed Amount per Sale
Multiple Rates per Target Level
Who receives payroll remittances?
Employees The Canada Revenue Agency Workers Compensation Boards Provincial Ministries of Finance Courts Insurance providers Pension fund administrators Other administrators of funds withheld from employee’s wages
What are the steps taken to process payroll?
Communicate to employees the payroll dates.
Advise other departments or functions of input “cut-off” dates for:
Changes to static information.
Newly hired employee information.
Termination or lay-off advice.
Pay cycle information such as regular hours, overtime, special payments.
Plan ahead to ensure that adequate time is allowed for unusual events such as holidays and vacations.
What are some of the selection criteria for a payroll system?
When choosing a payroll system the employer must consider:
The number of employees currently and in the foreseeable future.
The complexity of payroll related to;
Number of pay cycles.
Types of earnings
Deductions allowed.
Number of provinces with employees.
The capability of the payroll administrator.
The degree of integration desired to other company systems, if any.
The in-house support capability for the computer system.
The extent to which privacy is a concern.
List some advantages to using a computerized system
Computer systems can process large amounts of data, accurately.
Tables for calculation of with-holdings can be included with the computer software and are generally easy to install changes as legislative requirements change.
Output files can be created to provide data for other uses and then update other data files, such as automatically creating journal entries.
Input of information can be automated from other systems such as Time and Attendance record keeping. This simplifies input and improves accuracy.
Most systems provide some amount of customization to meet the needs of the employer.
Computer systems normally store data in standard file formats to facilitate system upgrades and transfer of information to third parties such as the Canada Revenue Agency or pension administrator
Name types of payroll systems.
Computerized
- Stand-alone – process payroll only
Integrated management systems (ERP)
- Hybrid integrated systems (ERP with mixed “best of class” modules)
- Out-sourced payroll systems, usually provide data formats for exchange to other systems used by employer
Manual
What is a general ledger?
Records used to record financial transactions by date referencing general ledger accounts.
Example used is general journal format.
Journals may also be specific to source of entries, payroll often use summaries of registers.
List some of the information found in a journal entry/general journal.
Journal entry number Transaction date Accounting period or month Account number and name Debit amounts Credit amounts Total debits and credits Description or explanation Posting reference Created by…. Approval
What is are journal entries? What are the 5 normal groups used for financial statement reporting?
Used to post journal information to accounts which record ongoing transactions by type. Organized into groupings: Assets Liabilities Equity Revenues Expense
What is a payroll register?
Chronological listing of transactions
For payroll purposes usually by cheque, separate register for each pay cycle
Provides detail of calculations for each employee of earnings and deductions
Employer Health Tax (Ontario) – When do they need to pay; when do they need to remit payment?
Ontario Employer Health Tax (EHT)
Most employers are exempt for the first $450,000 of payroll
The tax rate of 1.95% of payroll.
If an employer has payroll less than $600,000 than an annual return and payment is required by March 15th of the year following.
If the employer’s payroll is in excess of $600,000 then monthly instalments need to be made
What information is needed to determine WSIB premiums?
Industry classification Rates Payment process Assessable earnings Benefits to injured workers Penalty or award systems for employer experience.
