Payroll & Benefits

Prepared by Maggie Fitzpatrick, CPA, CGA

Topics:
1. Introduction to Payroll in Canada
2. Labour Standards in Canada
3. Gross Earnings
4. Statutory Deductions
5. Non-Statutory Deductions
6. Net Pay
7. Employer Payroll Taxes: Canada Revenue Agency
8. Employer Payroll Taxes: Workers Compensation
9. Employer Payroll Taxes: Health Taxes
10.Accounting for Payroll
11.Termination of Employment
12.Year End Reporting
Module 5

Non-Statutory Deductions
Prepared by Maggie Fitzpatrick, CPA, CGA
Learning Objectives

• LO1 List examples of different types of deductions.

• LO2 Calculate the amount to be withheld based on a court order.

• LO3 Calculate employer compulsory deductions.

• LO4 Calculate employee optional deductions.

Non-Statutory Deductions
• Statutory deductions include: CPP, EI and income taxes.

• Other deductions may also be required:

 Garnishment of wages
 Employer compulsory deductions
 Employee optional deductions

LO1
Garnishment of Wages
• Court order
 May be issued by all types of federal and provincial courts

• Canada Revenue Agency

 To collect unpaid taxes or recover overpayment

• Calculated as a percentage of gross earnings less statutory

deductions.

LO2
Employer Compulsory Deductions
• Details usually included in employment contract
 Employee must be aware and agree in writing
• Examples:
 Union dues
 Premiums for group insurance benefits
 Loan repayments (where the employer has provided a loan)
 Social fund for employees
 Registered Pension Plan (RPP)
 Etc.

LO3
Employee Optional Deductions
• Employer may allow employees to have other optional
deductions.

• Examples:
 Savings bonds
 Parking fees
 Charitable donations
 Etc.

LO4
Not all deductions are allowed!
• Deductions must be either required by law or for the employee’s
benefit

• Examples of deductions that are NOT allowed:

 Fees to cash cheques
 Cost of damage to company property
 Cost of lost, stolen or broken tools
 Cost of personal safety equipment
 Cost of a uniform

LO1
Non-Statutory Deductions
• Exercise 5-2

LO1
Module 5
• Garnishments
• Employer compulsory deductions
• Employee optional deductions
To do:
• Read (in Learn):
 LO1, LO2, LO3, LO4

• Complete:
 Exercise 5-1
 Exercise 5-2
Module 5

Non-Statutory Deductions
Prepared by Maggie Fitzpatrick, CPA, CGA
Learning Objectives

• LO1 List examples of different types of deductions.

• LO2 Calculate the amount to be withheld based on a court order.

• LO3 Calculate employer compulsory deductions.

• LO4 Calculate employee optional deductions.

Non-Statutory Deductions
• Exercise 5-3

LO1
To do:
• Read (in Learn):
 LO1, LO2, LO3, LO4

• Complete:
 Exercise 5-3
Module 5

Non-Statutory Deductions
Prepared by Maggie Fitzpatrick, CPA, CGA
Learning Objectives

• LO1 List examples of different types of deductions.

• LO2 Calculate the amount to be withheld based on a court order.

• LO3 Calculate employer compulsory deductions.

• LO4 Calculate employee optional deductions.

Non-Statutory Deductions
• Exercise 5-4

LO1
To do:
• Read (in Learn):
 LO1, LO2, LO3, LO4

• Complete:
 Exercise 5-4