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Chapter 2
Payroll Fundamentals 1
| Term | Definition |
|---|---|
| Employment standards legislate | min. wage, overtime rates, vacation pay requirements in each jurisdiction (except CLC and ONT). |
| Federal Canada Labour Code, Part III (CLC) and Ontario | require pay to be received according to their specified frequency. |
| Minimum standards | established regular payday (30 days), recurring payday, at least monthly, semi-monthly, or every 16 days. |
| Federal Canada Labour Code, Part III (CLC) | regular payday (30 days). |
| ONT | recurring payday |
| AB, NT, NU | at least monthly |
| BC, MB, NFL, NS, Sask., YT | at least semi-monthly |
| NB, PEI, QC | at least 16 days |
| Pay frequency | Weekly, bi-weekly (60%), semi-monthly, and monthly. As long as all minimum standard requirements are met, employers can select the pay period frequency. |
| Salary (earning) | fixed amount of earning paid per pay period. |
| Wages (earning) | earnings based on the amount of time worked, rate per hr. or day. |
| Piecework (earning) | pay earned per unit of production. |
| Shift premiums/Shift pay (earning) | additional amounts paid above normal salary/wage for evening or midnight shifts. Day = 8 am - 4 pm Evening = 4 pm - midnight Midnight = midnight -8 am |
| Overtime (earning) | dollar amount paid for time worked over normal work day or week (1.5 times). ONT = over 44 hrs./wk. NB and NFL = 1.5 times min wage. BC = 2 times regular hr. rate above 12 hrs. |
| Vacation pay (earning) | legislated in every jurisdiction. |
| Sick pay (earning) | amount paid when absent for work due to illness or injury. Legislated only in PEI and QC. |
| Sick Pay plans | Formal - provide equitable sickness benefits to all employees for personal or family sick leave. Informal - no policy, is granted at employer's discretion. |
| Self-insured Disability Types (earnings) | sick pay, short and long term disability. |
| Wage-loss replacement plan (WLRP) | an arrangement to compensate and employee with payment for sickness, disability , maternity, or injury. |
| WLRP Types | Short-term disability (STD) and Long-term disability (LTD). |
| Short-term disability (approx. 70% coverage) | provide income for a predetermined period of time, absent due to illness or injury. |
| Long-term disability | provide income for those who exhausted their short-term coverage and still unable to work full-time. |
| Third-party plan | payments (sickness plans) administered and funded by insurance carrier. Not employment income. |
| Withholdings | statutory deductions required by legislation. |
| Canada/Quebec Pension Plan (C/QPP) | contributions calculated on GPTI (earnings, taxable allowances, cash and non-cash taxable benefits). |
| Employment Income (EI) | premiums calculated on IE (earnings, taxable allowances, cash taxable benefits). |
| Quebec Parental Insurance Plan (QPIP) | premiums calculated on IE (earnings, taxable allowances, cash taxable benefits). |
| Federal and Provincial income taxes | based on net taxable income (earnings, taxable allowances and taxable benefits minus deductions by CRA and RQ). |
| Payroll tax | 2% deducted at source from gross remuneration. (NT and NU). |
| No Payroll tax | employees who don't earn more than $5,000.00/yr. (NT and NU). |
| Remuneration (employment income) | compensation or pay for services. |
| Employment income | earnings, allowances, benefits and taxable expense reimbursements. |
| Earnings | dollar amounts paid for work performed. Pensionable, insurable, taxable, subject to all deductions. |
| Regular earnings | dollar amounts paid for day-to-day duties, on a pay period basis. |
| Regular earning types | salary, wage, piecework, self-insured disability payments, vacation pay, overtime, and shift pay. |
| Allowances | additional dollar amounts paid for the use of personal property for business purposes. |
| Allowance types | car, meals, uniforms, safety shoes, clothing for business reasons. |
| Benefits | dollar values attributed to something the employer provided or paid for on behalf of the employee. |
| Benefit types | company-leased auto for business and personal use or group term life insurance premiums. |
| Expense reimbursements | dollar amounts paid to cover expenses incurred while on the job. Not considered in employees pay. Not income, not subject to deductions but affect net pay. |
| Expense reimbursement, taxable | personal living expenses, taxable, subject to deductions. |
| Regular payment | established frequency, such as weekly salary or wages. |
| Non-regular payment | non-established frequency, bonus or retroactive adjustment. |
Created by:
Moorebaier
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