Service Canada and CRA update Canadian Payroll Association conference delegates on changes and recent issues
Service Canada is adding a web wizard to its ROE Web to help employers complete Records of Employment (ROE) online, a government representative told attendees at this year’s annual Canadian Payroll Association (CPA) conference in Toronto in June.
ROE Web Assistant will provide employers who are not as familiar with the electronic version of the ROE with step-by-step instructions on how to complete it, said Eve-Sophie Charbonneau, a
program manager with ROE Electronic Services.
“We are targeting small and medium employers who might not have a lot of knowledge about the ROE. Maybe they issue one a year, two a year,” she said.
Employers can start using the ROE Web Assistant on Nov. 15.
“The first phase will focus on core functionalities such as incorporating guidance and help text into the application and making it more interactive,” said Charbonneau in a followup email. Further changes to the wizard will be based on employer feedback.
Léo Gaulin, a program manager with ROE Electronic Services, told attendees that Service
Canada wants to encourage more employers to use an electronic version of the ROE. Currently, Service Canada receives 75 per cent of all ROEs this way, while the remainder are on paper.
Charbonneau also discussed recent changes to the ROE Web. One of the biggest changes allows employers to register online to use the service, she said.
“We have a partnership with the Canada Revenue Agency and we use their CRA (partner) service, so if you have an account with CRA, you don’t need to go in person to a Service Canada Centre if you want to register for ROE Web. You can do everything online.”
ROE Web updates
Service Canada has also updated the ROE Web to incorporate a number of technical changes, including drop-down menus that enable users to provide more information in block 16 (reason for issuing ROE) instead of entering comments in block 18. The changes are part of an effort to standardize the ROE Web with the current version of the ROE SAT, which is mostly used by payroll service providers.
“We’ve added options in these menus and they are more specific. They are more precise. You don’t have to give us a comment in block 18 to explain why, for example, you chose K (the “Other” option in block 16),” said Charbonneau.
Instead of only being able to choose “Other” for code K, users now have a number of more specific options to explain why they are issuing the ROE. Employers can choose the most applicable reason from choices such as a change of payroll frequency, change of ownership, change in payroll service provider, ROE requested by Employment Insurance, ROE requested by employee or Canadian Forces Queen’s Regulations/Orders.
Code E now contains a number of options to explain why an employee quit, including following a spouse, returning to school, health reasons, voluntary retirement, taking another job, employer relocation, caring for a dependant or becoming self-employed.
With more options in block 16, Service Canada has removed code C – Return to school. If an employee is leaving employment to go back to school, employers should now use Code E – Quit/Return to school. For summer students, Service Canada advises using Code A – Shortage of work/End of contract or season. If an employee is leaving employment for apprentice training, use Code J – Apprentice training.
While there will be situations where employers still have to put comments in block 18, Gaulin said Service Canada is trying to limit them because it means Service Canada has to remove the ROE from its automated processing system and review it manually, lengthening the processing time for an EI claim.
Legislative changes
While Service Canada’s session focused on technology-related changes, the CRA’s presentation highlighted recent legislative amendments and other issues affecting payroll. Marlene Sylvest, a manager in the Trust Accounts Programs Division of the CRA, updated attendees on changes the federal government announced in its 2014 federal budget, including plans to change the frequency with which some employers send in source deduction remittances to the CRA.
The government is changing the remitting levels for regular and threshold 1 and 2 remitters, beginning with amounts employers withhold from employees’ earnings on or after Jan. 1, 2015. The category of regular remitter will apply to employers with an average monthly withholding amount of less than $25,000 two calendar years ago. The threshold is currently less than $15,000. Employers in this group send in remittances monthly.
The average monthly withholding amount for threshold 1 remitters will be $25,000 to $99,999. It is currently $15,000 to $49,999. Employers in this category remit source deductions to the CRA twice per month.
The threshold 2 category will apply to employers with an average monthly withholding amount of $100,000 or more. It is currently $50,000 or more. These employers have to send in remittances four times per month.
The changes will not affect employers whose average monthly withholding amount is less than $3,000. They will continue to send in remittances on a quarterly basis.
“If your remitter status will be changing, you will receive a confirmation letter (from the CRA) in early November to let you know what your remitter status is going to be in 2015. If you don’t hear from us, there are no changes for you in terms of remitting status,” said Sylvest.
Tax credits
She also told attendees about a new tax credit for search and rescue volunteers. The credit, which applies as of this year, is similar to the volunteer firefighter tax credit implemented a few years ago. Both credits are calculated by multiplying the lowest personal income tax rate for the year (15 per cent) by $3,000 (for a total credit of $450). Individuals claim the credits when they file their personal income tax return.
To be eligible, volunteers must do a minimum of 200 hours of search and rescue services a year for one or more eligible ground, air or marine search and rescue organizations. Eligible organizations are members of the Search and Rescue Volunteer Association of Canada (SARVAC), the Civil Air Search and Rescue Association or the Canadian Coast Guard Auxiliary or those that a provincial, municipal or public authority recognizes as a search and rescue organization.
The hours worked would mostly have to be for responding to and being on call for search and rescue and similar emergencies, going to the organization’s meetings and taking part in mandatory training.
Individuals who do at least 200 hours of combined search and rescue and volunteer firefighting services can claim either the search and rescue tax credit or the one for volunteer firefighters, but not both. Individuals who claim one of tax credits cannot also claim a $1,000 income tax exemption that applies to emergency volunteers.
On the employer side, the government is ending a hiring credit for small business related to EI premiums. The one-time credit of up to $1,000 applies against an increase in an employer’s EI premiums paid in one year over the previous year.
The federal government first introduced the credit in 2011 and extended it for 2012 and 2013. For 2011 and 2012, it applied to employers with no more than $10,000 in employer EI premiums. For 2013, the government raised the threshold to $15,000.
Employers do not apply for the credit. Instead, the CRA automatically calculates it after an eligible employer files its 2011, 2012 or 2013 (as applicable) T4 return. To receive the 2011 credit, employers must file their 2011 T4 return by the end of this year. For the 2012 credit, 2012 T4s must be filed by Dec. 31, 2015. For 2013, employers must submit 2013 T4s by the end of 2016.
SINs
Sylvest also discussed administrative issues around social insurance numbers (SINs) and year-end reporting, reminding attendees the government now issues SINs using form letters rather than plastic cards.
She advised payroll practitioners to make sure employees provide their correct name and SIN when they begin working for an employer. To ensure employee information is correct, Sylvest said payroll/HR should ask to see other pieces of identification from an employee such as a driver’s license.
