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2014 is here...

2 minute read time.

Hello and Welcome to 2014,

Happy New Year!

This blog is a continuation of my previous blog regarding year-end procedures entitled:
Exemption amounts and maximum contributions for 2014
http://sagecity.na.sage.com/support_communities/sage_50_accounting_ca/b/sage_50_ca_supporthub_blog/archive/2013/12/11/exemption-amounts-and-maximum-contributions-for-2014.aspx

I get asked the same question multiple times at the end of every year, "If I worked all or some of the days in December, do I post my paycheque in the month of December or January?" My answer is, "If pay day is 2 weeks later, post the paycheques 2 weeks later. Don't change the date of the cheques because payday falls into a new year." Also, I'll let CRA answer this in there own words. They say "You have to report income on a T4 slip for the year during which it was paid, regardless of when the services are performed or rendered. For example, if a pay cheque dated in January covers income earned in the last days of December, report the income on the T4 slip for the year that starts in January, since that is the year it was paid."
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/rtrns/t4/slps/whn-eng.html

At the end of the year (and sometimes during), many people print the Pensionable and Insurable Earnings Review (PIER) report. After, they wonder why CPP is almost always overpaid. It's because of the $3,500 exemption. The $3,500 isn't on the first $3,500 earned. That would be too easy. It divided up separately and evenly by paycheque. (Ex. $134.62 CPP exemption per paycheque if there are 26 pay periods). So, if an employee is part time or didn't work since the beginning of the year, the PIER report will always state that too much CPP was deducted from the employee.

Pensionable and Insurable Earnings Review (PIER)
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/pr-eng.html

There may be cases when you have to either start deducting CPP, or stop deducting CPP, for your employee during the year. For more information, see...
Starting and stopping CPP deductions
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/ddctns-eng.html
The site above only mentions special circumstances. It doesn't mention normal circumstances like an employee that doesn't get hired on Jan 1st and therefore didn't work the whole year. I, personally, wrote CRA a complaint/suggestion regarding this.

Checking the amount of CPP you deducted
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/prrtng/menu-eng.html

Examples on how to prorate the maximum contribution to CPP
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/prrtng/xmpls-eng.html


When it comes time to printing out the T4s, if you want to print the form and the contents, choose Plain-paper laser and inkjet form in the Form Type list.
https://support.na.sage.com/selfservice/viewContent.do?externalId=11044

This CRA site has a great page where you can find a "clickable T4 slip" for detailed descriptions of every T4 box
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/rtrns/t4/slps/cmpltng/menu-eng.html

Recently, we have put together some helpful year-end procedure videos and we've posted them publicly to YouTube:

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*Community Hub is the new name for Sage City