What's new and updated for payroll

For Employment Insurance (EI) purposes, you may be considered an employer of the self-employed taxi driver or driver of other passenger-carrying vehicles, even if you do not provide a payment to them.

Content has been updated for clarity, completeness and plain language. No changes were made to the existing legislative requirement.

For Employment Insurance (EI) purposes, as the owner or operator of an establishment that offers barbering and hairdressing services, you may be considered an employer of the self-employed barber and hairdresser, even if you do not provide a payment to them.

Content has been updated for clarity, completeness and plain language. No changes were made to the existing legislative requirement.

Employers and payers have a legal obligation to report all income paid to and deductions withheld from First Nations workers (employees or self-employed workers) on a T4 or T4A slip regardless of whether the income is taxable or exempt.

Content has been updated for clarity, completeness and plain language. No changes were made to the current CRA administrative policy.

The CRA is seeking feedback through an online questionnaire, which is open to all businesses and organizations who hire another business or businesses to receive a service in exchange for payment.

The CRA encourages you to participate in this questionnaire, the feedback received will help the CRA to learn more about:

• Appropriate methods and challenges with RFS reporting
• Invoicing practices for goods and services
• How to minimize the administrative burden
• How prepared businesses and organizations are to meet this reporting requirement
• How to minimize challenges and provide proactive support for businesses and organizations who need to meet this requirement

The questionnaire will close on July 22, 2024.

Generally, if an employer provides an allowance or a reimbursement to their employee to compensate for travel expenses (other than automobile or motor vehicle expenses), the benefit is taxable. Depending on the situation, the benefit may not be taxable.

Content has been updated for clarity, completeness and plain language. No changes were made to the current CRA administrative policy.

The following new codes were added:

• RPP contributions

  Code 94 – Indian (exempt employment income) - RPP contributions

• Union dues

  Code 95 – Indian (exempt employment income) - Union dues

These new codes must be used for T4 slips filed for calendar year 2024 and after to report RPP contributions or union dues relating to tax-exempt employment income you paid to your employee who is registered, or entitled to be registered under the Indian Act.

The content has been updated to include the payroll deductions tables that are effective January 1, 2024.

It also includes examples on how to manually calculate CPP contributions, CPP2 contributions, EI premiums and income tax deductions using the 2024 rates and maximum pensionable and insurable earnings.

Generally, if an employer provides a benefit such as special clothing, an allowance or a reimbursement for special clothing to their employee, the benefit is taxable. Depending on the situation, the benefit may not be taxable under the CRA's administrative policy.

Content has been updated for clarity, completeness and plain language. No changes were made to the current CRA administrative policy.

The following boxes were updated to provide clarity and completness:

• T4 slip

  Box 45 – Employer-offered dental benefits

• T4A slip

  Box 015 – Payer-offered dental benefits

These new boxes must be used to indicate whether the employee/recipient or any of their family members were eligible, on December 31 of that year, to access any dental care insurance, or coverage of dental services of any kind, that an employer or payer offered.

Generally, event tickets an employer provides, pay or reimburse to employees are taxable. Depending on the situation, the benefit may not be taxable.

Determine which methods you can use to calculate deductions, get the CPP contributions tables, the CPP2 contributions tables, the EI premiums tables, the claim codes and the income tax tables and how to manually calculate the amount to withhold

If you are a payroll software provider or a company which develops its own in-house payroll solution, you can now consult the T4127 119th Edition effective January 1st, 2024.

This guide has the formulas you need to determine federal, provincial (except Quebec), and territorial income taxes, Canada Pension Plan (CPP) contributions, and employment insurance (EI) premium deductions.

The CRA and Employment and Social Development Canada announced the new rates for 2024.

Learn more:

• Canada Revenue Agency announces maximum pensionable earnings and contributions for 2024
• Canada Employment Insurance Commission confirms 2024 Employment Insurance premium rate

Personal Services Businesses – Event hosted by the CRA

The CRA is hosting a free webinar to help incorporated individuals determine whether they meet the definition of a personal services business, and what that means in terms of tax obligations.

This webinar is for you if you are:

• Registered as a corporation and you're the only shareholder and employee of your corporation
• Doing work for one other corporation that would normally be done by an employee
• A worker who is considering incorporating for work

Registration closed The webinar is on Wednesday, October 25, 2023, at the following times:

The following new boxes were added:

• T4 slip

  Box 45 – Employer-offered dental benefits

• T4A slip

  Box 015 – Payer-offered dental benefits

These new boxes must be used to indicate whether the employee/recipient or any of their family members were eligible, on December 31 of that year, to access any dental care insurance, or coverage of dental services of any kind, that an employer or payer offered.

The following new boxes were added:

• T4 slip

  • Box 16A – Employee's second CPP contributions (CPP2)
  • Box 17A – Employee’s second QPP contributions (QPP2)

• T4 Summary

  • Box 16A – Employee's second CPP contributions (CPP2)
  • Box 27A – Employer’s second CPP contributions (CPP2)

These new boxes must be used to report the amount of CPP2 or QPP2 contributions.

Where a loan is received because of employment, the benefit will not need to be reported when:

• Total amount of all loans received is $10,000 or less per calendar year
• Term of the loan(s) is 60 days or less
• loan is not received because of shareholdings

Previously, the POE for full-time remote workers was determined by the location of the establishment of the employer that pays their remuneration.

Under the new policy, the POE for a full-time remote worker is determined by the location of the establishment of the employer to which they can reasonably be considered to be attached.

Indicators have been developed to assist employers in the determination of whether a worker is considered attached to an establishment.

Learn about Canada Pension Plan (including second additional CPP contributions), Employment Insurance and the income tax deductions, including the CPP, CPP2, EI and income tax rates, the CPP/EI maximums and the CPP exemptions.

Employers and payers can distribute T4, T4A, T5, T2202 or T4FHSA slips using an employer or payer's secure electronic portal without obtaining written or electronic consent from the employees or recipients before distributing the slips unless an exceptional situation applies, or the taxpayer has requested the information return be provided in paper format.

The threshold for mandatory electronic filing of income tax information returns for a calendar year has been lowered from 50 to 5 for information returns filed after December 31, 2023.

Payers are required to report fees for services on a T4A, T5018 or T1204 slip, depending on who the payment was made to.

Content was rewritten and improved to provide guidance on indicators when a payment is made for a good or a service.

As of January 1, 2024, remittances or payments to the Receiver General of Canada should be made as an electronic payment if the amount is more than $10,000. Payers may face a penalty unless they cannot reasonably remit or pay the amount electronically.

Change allows certain gift cards to be used for providing long-service awards. Criteria for the gift cards able to be used for long-service awards is the same as for gift cards used in providing non-cash gifts and awards.

A new ratio has been provided to help simplify when a taxable parking benefit must be included in income in cases where a limited number of parking spaces are provided to employees by the employer.

A new category has been created for virtual social events. Virtual social events can be provided by an employer for its employees and not be considered to be a taxable benefit as long as the cost per employee is $50 or less when only hospitality is provided, or $100 or less where both hospitality and entertainment are provided. Where the event is both in-person and virtual, for administrative convenience, the current cost limit per person of $150 will apply.