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Briefing for the Minister of National Revenue

ePayroll

Issue

ePayroll is a near real-time solution that will modernize and streamline the way employers transmit and report payroll, employment, and demographic information to the Government of Canada. 

The CRA is leading this large scale project for the Government of Canada to implement an ePayroll solution in partnership with Employment and Social Development Canada (ESDC) and Treasury Board Secretariat – Office of the Chief Information Officer.

The current phase of the ePayroll project is focused on developing a fully costed implementation plan supported by prototyping components of the solution, and consultation with stakeholders.  

Things to consider

  • ePayroll will transform the way employers interact with the Government of Canada: The current phase of the ePayroll project will look at how this transformation will impact Canadian employers and their employees. The CRA in collaboration with ESDC, will need to help prepare employers and government programs for the investment and time required to adapt their existing reporting systems and business processes.
  • Payroll reporting is an administrative burden for businesses of all sizes: Currently information is shared with the government at a point in time (e.g., when either a T4 or an Employment Insurance Record of Employment are issued). Employers must provide the same or similar information to multiple government entities, and requests from the Government of Canada are not always aligned to what is readily available in their payroll systems. The Canadian Federation of Independent Businesses identified federal payroll taxes as a top compliance irritant for business owners, and recommends reducing related administrative requirements. The National Payroll Institute estimates the total cost of payroll-related compliance activities to Canadian employers as $12.5 billion. ePayroll follows a “tell-us-once” approach, where employers will report employees' payroll information to the Government of Canada each time they pay employees, which can then be accessed across government to better serve Canadians.
  • Potential inaccurate association with issues caused by the Phoenix pay system: When people hear that the Government of Canada is creating a data exchange where employers will upload payroll, employment, and demographic information, they may think of the Phoenix pay system, which caused pay problems for many public servants. This project is not related to Phoenix, other than as a pay system Phoenix will upload information to ePayroll like any other. The first phase of the project will focus on consulting, prototyping, and planning to mitigate the type of risks that became major issues for the Phoenix pay system.

Next steps

  • [Redacted]

Key messages

  • ePayroll will modernize and streamline the way employers transmit and report payroll, employment, and demographic information in real time to the Government of Canada
  • Using a “tell-us-once” approach for employers will reduce their administrative burden while improving the Government's ability to deliver services and benefits for Canadians
  • The CRA is working with key stakeholders to conduct research, analysis, and prototyping to ensure that an ePayroll solution will meet the needs of businesses and other stakeholders
  • The protection of the personal information of Canadians is a top priority for the Government of Canada and in the design and creation of the ePayroll solution

Background

Budget 2021 announced $43.9 million for the first phase of the ePayroll project to conduct research and engagement in parallel with agile and iterative prototyping and experimentation in a 3-year plan.

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