Canadian Payroll Association advocacy results in welcome
Payment on Filing initiative for year-end payroll remittances
TORONTO, Dec. 10, 2019 /CNW/ - Until this year, Canadian Payroll Professionals have never truly been able to enjoy the revelry and joy, the champagne and fireworks that most associate with New Year's. Particularly for those working with the country's largest employers, it's always been less of a happy new year, and more of a stress-filled year-end.
This year, thanks to ongoing advocacy by the Canadian Payroll Association, that's all changing. Following an announcement of the new Payment on Filing initiative by the Canada Revenue Agency, a deadline of the end of February has been granted to qualifying employers to make a reconciliation remittance for the last payroll of the year. The Canadian Payroll Association commends the CRA for recognizing the importance of this change and for moving in this positive direction.
"Payroll professionals take the responsibility to complete every payroll accurately and on-time, very seriously," says Peter Tzanetakis, President of the Canadian Payroll Association. "Beyond asking payroll professionals to work through the holidays, the previous requirement also often called upon those working with larger organizations to over-estimate remittances on taxable benefits."
"The new Payment on Filing initiative is a welcome relief for payroll professionals in enterprise-level organizations. In years prior, we were required to make the year's final remittance within three days of the last payroll — which was almost always right after New Year's Eve," explains Deirdre Joachim, a member of the Canadian Payroll Association's Federal Government Relations Advisory Council representing Canadian banks and a senior payroll professional with TD Bank Group.
Forcing payroll professionals to complete the year-end process based on assumptions and estimations proved costly for businesses. Inevitably, once the New Year dawned and staff returned remittance adjustments would be required, resulting in either costly late penalties and interest — potentially in the hundreds of thousands of dollars — or the time consuming task of requesting a refund for over payments which often triggered both internal and government audits.
"The new approach is a win for Canadian employers," adds Tzanetakis. "It will enable organizations to manage their year-end process in an effective and efficient manner while saving millions of dollars in interest, penalties, salaries, and other administrative costs. It will mean that payroll professionals who are dedicated to unfailing accuracy and timeliness, won't be asked to choose one over the other."
NEXT STEP: HARMONIZATION
With many enterprise-level organizations operating on a pan-Canadian basis, harmonizing regulatory requirements between the CRA and Revenu Québec is absolutely essential. Where different conditions exist, payroll is challenged to manage multiple, parallel processes — increasing the potential for non-compliance.
That's why, following the Federal Government's announcement, the Canadian Payroll Association encouraged Quebec to align its remittance deadline with the Payment on Filing initiative. This led to Revenu Québec announcing an administrative tolerance for an extension, penalty-free, but with interest charged back to the original remittance due date for employers with a weekly or semi-monthly remittance frequency, to before January 16th.
The administrative tolerance is a welcome acknowledgment by Revenu Québec of the challenges faced by payroll during New Year's. The Canadian Payroll Association looks forward to continuing to work with the provincial government towards full harmonization.
PAYMENT ON FILING ELIGIBILITY
To be eligible for a penalty and interest-free Payment on Filing with the Canada Revenue Agency, employers must meet the following conditions.
- The remittance amount must be:
- Received by the Canada Revenue Agency, on or before the last day of February following the tax year in which the amounts were or should have been deducted;
- Less than 1% of the total annual remittances (total paid plus unpaid).
- The employer must have a perfect payroll compliance history, with:
- No late or outstanding remittances for the tax reporting year;
- No assessments;
- The annual T4 slip filing completed on or before the due date.
- The employer experiences one of the following circumstances:
- Employees exercise stock-based remuneration;
- Employees that reside in a different tax jurisdiction;
- Third-party information is required to accurately report amounts for taxable benefits such as insurance and employer-provided automobile benefits.
If the final remittance due is equal to or greater than 1% of the total remittances for the year, Payment on Filing does not apply and a late penalty will be assessed.
To help employers and payroll professionals determine their eligibility for the Payment on Filing initiative, the Canadian Payroll Association has developed an evaluation tool, available at www.payroll.ca.
ABOUT THE CANADIAN PAYROLL ASSOCIATION
Canada's 1.5 million employers rely on payroll practitioners to ensure the timely and accurate annual payment of $970 billion in wages and taxable benefits, and $324 billion in statutory remittances while complying with more than 200 federal and provincial regulatory requirements. As the authoritative source of Canadian payroll compliance knowledge, the Canadian Payroll Association promotes payroll compliance through advocacy and education. For more information on the Canadian Payroll Association, please visit payroll.ca.
SOURCE Canadian Payroll Association
For further information: or to speak with a Canadian Payroll Association expert, please contact: Adam Sanders, Manager, Communications and Marketing, [email protected], 1-800-387-4693 x 111