CPP contributions, minimum wage changes, determining jurisdiction for source deductions (Ask an expert)

Restarting CPP contributions

Question: We recently hired an employee who filed a CPT30 form last year at her previous job to stop CPP contributions from being deducted from her earnings. She is 67 years old. She now wants to have CPP contributions deducted. Can we just start making the deductions and paying the employer contribution?

Answer: Before the employer can restart CPP contributions, the employee must first complete Part D on a CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election and send it the Canada Revenue Agency (CRA). Part D allows employees to revoke a previous election to stop contributing to the CPP. Before sending the form to the CRA, she must make a copy of it for the employer and copies for any other employers for whom she works. She should also keep a copy for her own records.

The employer can start making deductions for CPP on the first day of the month after the month she gives you the form (this will usually be the date the employee entered on the form), using the employee’s regular pay period schedule.

Keep in mind that employees are not allowed to file a revocation to start CPP contributions in the same calendar year they filed an election to stop CPP contributions.

Determining jurisdiction for source deductions

Question: We have some employees at head office who work one week a month in one of our satellite offices in another province. Which Payroll Deductions Tables do we use to calculate their deductions for the week they are in the other jurisdiction?

Answer: To determine federal source deductions, use the Payroll Deductions Tables for the province in which the employee works most of the time.

In a situation where an employee spends an equal amount of time working in both jurisdictions, the employer would use the tables for the jurisdiction in which the employee last worked.

If the employer is located in Quebec and the employee mainly works there but sometimes works in another province, the employer would still deduct Quebec provincial income tax, QPP and QPIP from the employee and pay the employer contribution for QPP, QPIP, Health Services Fund and Commission des norms du travail. In addition, the employee’s salary or wages would also be included in calculating the employer’s total payroll for the Workforce Skills Development and Recognition Fund.

Upcoming minimum wage changes

Question: Are there any minimum wage changes planned for 2013 of which I should be aware? We have employees in most provinces and territories.

Answer: Here is a list of the minimum wage changes that we are aware of so far:

Alberta — Minimum wage changes are tied to the consumer price index. Any changes will be implemented on September 1. The government has promised to give three months’ notice of minimum wage changes.

Nova Scotia — Minimum wage changes are indexed to the low-income cutoff. The minimum wage in Nova Scotia will rise to $10.30 per hour on April 1, the province announced. The increase is 1.5 per cent higher than the present rate of $10.15

The minimum wage for an inexperienced worker, with less than three months' experience in the work for which they were hired, will also rise from $9.65 to $9.80.

Quebec — The province recently announced that it would raise the provincial minimum wages on May 1, 2013. The general rate would increase from $9.90 per hour to $10.15, the rate for employees who receive tips would rise from $8.55 per hour to $8.75, and the rate for employees in specified sectors of the clothing industry would rise from $9.90 an hour to $10.15.

The province also plans to increase the minimum amount paid to individuals who pick certain fruits. For raspberries, the minimum amount would increase from $2.91 per kilogram to $2.98 and for strawberries, it would rise from $0.77 per kilogram to $0.79.

Yukon — The territory adjusts its minimum wage every April 1 based on the consumer price index. The government hasn’t yet announced any changes for this year.

Annie Chong is manager of the payroll consulting group at Carswell, a Thomson Reuters business, which publishes the Canadian Payroll Manual and operates the Carswell Payroll Hotline. She can be reached at annie.chong@thomsonreuters.com or (416) 298-5085.

Canadian Payroll Reporter introduces minimum wage chart

Canadian Payroll Reporter has introduced a minimum wage chart on the homepage of its website. As we monitor minimum wage across the country, will update the chart accordingly.

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