Employment Insurance, Canada Pension Plan, and income tax deductions
Under federal law, employers and employees have to pay Canada Pension Plan contributions and Employment Insurance premiums on all insurable earnings. Throughout the year, employers have to remit these deductions to the Canada Revenue Agency (CRA), along with the business’s share (known as payroll remittances). Good accounting practices and/ or the CRA’s online Payroll Deductions Calculator can help to assess and manage these deductions and remittances. To manage payroll, practices need to:
Open a payroll account by registering online, by phone, or by mail.
- Get a social insurance number from each employee.
- Calculate and make appropriate deductions from payroll and ask employees with more than the basic personal tax credit to complete a TD1 form.
- Regularly remit employee payroll deductions along with the employer share to the CRA according to CRA’s prescribed due dates.
- Report the employee’s income and deductions on T4 slips or T4A slips, which are provided to the employee and filed with CRA by the end of February each year.
- Complete a Record of Employment whenever an employee experiences an interruption in earnings.
- Administer benefits, including long-term disability, to ensure that all premiums are deducted (as appropriate) and paid to the benefits provider. For more information on the benefits offered through the AOMBT, see the AOM Benefits Trust website.
Self-employed individuals, such as partners or independent contractors, may elect to contribute to CPP and EI through their taxes, but will be responsible for remitting payment themselves.
Practice groups can also contact CRA’s business department by telephone at: 1-800-959-5525.