A look at news, facts and figures shaping the world of payroll professionals
Manitoba plans to index tax brackets
WINNIPEG — Beginning next year, the Manitoba government plans to index the province’s income tax brackets, Finance Minister Cameron Friesen announced in tabling the province’s 2016 budget on May 31.
He said the measure “gives Manitobans a permanent tax break that will keep up with the cost of living by ending bracket creep and indexing income tax brackets to the rate of inflation.”
In 2017, the brackets will increase by the provincial consumer price index for the 12-month period of October 2015 to September 2016. Indexation will continue in later years.
Budget documents state that the government will know the actual indexation factor for 2017 by November when Statistics Canada releases provincial inflation figures.
Although the brackets will change, the tax rates will remain 10.8 per cent, 12.75 per cent and 17.4 per cent.
Friesen also announced that the government plans to index the basic personal exemption amount that employees may claim on a TD1MB, Personal Tax Credits Return, beginning in 2017. The basic personal amount is currently $9,134.
“Low-income earners pay tax at a much lower threshold than in other provinces because Manitoba’s basic personal exemption for personal income taxes is among the lowest in Canada,” he said.
Other measures proposed in the budget include plans to review the province’s personal and business tax credits and to set up a task force to find ways to reduce red tape.
In related news, budgets recently released in Saskatchewan and the Northwest Territories did not propose any payroll-related changes.
CRA revises PD7A
OTTAWA — The Canada Revenue Agency (CRA) has redesigned its PD7A remittance form for employers to make it easier to read and understand.
In May, the agency began sending the new form to employers. It says it made a number of changes to the form as part of the federal government’s commitment to improve the way the CRA communicates with businesses and individuals.
The revisions include:
• putting the most important information, including remitter type, due dates and year-to-date remittance account balance, on the first page
• providing a table listing remittance and arrears account transactions on the second page
• highlighting CRA services that may be of interest, such as online services, direct deposit and My Business Account.
More information on the revised form is available at www.cra-arc.gc.ca/gncy/ntcslttrs/pd7/menu-eng.html.
Alberta holds minimum wage consultations
EDMONTON — The provincial government is holding consultations on Alberta’s minimum wage rates.
Labour Minister Christina Gray announced in mid-May that the government would hold immediate consultations with key stakeholders, including employers.
“We want to take the time to listen to the people directly involved and make sure we get this right,” she said.
Topics to be discussed during the consultations include future minimum wage increases, meal and lodging deductions and a phase-out of the liquor server minimum wage rate. Last year, the government announced it would raise general minimum wage to $15 an hour by 2018 and eliminate the liquor server wage rate by Oct. 1.
The minimum wage rate is currently $11.20 an hour, while the liquor server rate is $10.70.
Average weekly earnings up in March: StatsCan
OTTAWA — Average weekly earnings of non-farm payroll employees were $960 in March, up from $955 in February, Statistics Canada reports.
Statistics Canada revised the February numbers from the previously reported $954. On a year-over-year basis, weekly earnings increased 0.7 per cent in March.
The increase in weekly earnings during the 12 months to March reflected a number of factors, including wage growth, changes in the composition of employment by industry, occupation and level of job experience, as well as average hours worked per week.
Non-farm payroll employees worked an average of 32.9 hours a week in March, unchanged from the hours reported for February.
Year-over-year earnings of non-farm payroll employees increased in March in Quebec, Nova Scotia, Prince Edward Island, Manitoba, New Brunswick, British Columbia and Ontario.
They declined in Alberta and Newfoundland and Labrador and were little changed in Saskatchewan.
U.S. Labor Department unveils new overtime rules
WASHINGTON, D.C.— Beginning in December, more workers in the United States will be eligible for overtime pay as a result of new rules for determining who qualifies for overtime.
In May, the U.S. Department of Labor released new overtime regulations. It says the changes will extend overtime pay protections to over four million workers within the first year they are implemented.In the U.S., overtime pay is governed by the federal Fair Labor Standards Act (FLSA).
Under the FLSA, workers are entitled to overtime pay of at least 1.5 times their regular rate if they work more than 40 hours a week unless regulations under the act exempt them.
Regulations currently exempt salaried white-collar workers who earn at least $23,660 per year (all dollars US) (or $455 per week) and whose job duties primarily involve executive, administrative or professional duties defined in the regulations. The new regulations will raise the exemption threshold for this group to $47,476 a year (or $913 per week).
They will also change a total annual compensation threshold that exempts “highly compensated employees” from overtime pay if they meet a job duties test that classifies them as executive, administrative or professional employees. The threshold is currently set at $100,000 (this includes a minimum salary of $455 per week, plus other compensation such as commissions and bonuses).
The new regulations will raise the threshold to $134,004. A mechanism will also automatically update thresholds every three years, as of Jan. 1, 2020.
The rule changes will also allow employers to use non-discretionary bonuses and incentive payments (including commissions) to satisfy up to 10 per cent of the new standard salary level.