Year end is a busy time in the payroll department. To help you through, the Canadian Payroll Association has created this checklist of action items. We hope you find it useful!
START-UP
- Create a year-end reference file
- Determine which forms will be required (T4, T4A)
- Download guides and forms from the CRA
- Hold a year-end meeting with stakeholders (IT, HR, Finance)
BALANCE & RECONCILE
- Balance payroll tax account remittances to payroll register
- Reconcile payroll bank account for outstanding entries to payroll
- manual cheques
- void/cancelled cheques
- investigate any stale-dated cheques
- Update any manual or cancelled cheques to payroll
- Conduct self-PIER audit of CPP & EI deductions
- Remit outstanding CPP & EI with or before final remittance for tax year
- Run test T4 slip and summary report
- Balance T4 report to payroll register – validate earnings and deductions are reporting in correct boxes
- Ensure accurate social insurance numbers are reported
- Update WCB awards reimbursed to employer
TAXABLE BENEFITS
- Taxable benefits reported each pay when received or as enjoyed
- Process taxable benefit adjustments e.g. company car benefits
- Validate benefits are reported in all required boxes on tax slips
PENSION ADJUSTMENT
- Validate pensionable earnings per company plan document
- Calculate pension adjustment
- RPP registration number reporting in Box 50 for all plan members
- Reporting of taxable refunds if necessary
FILING PROCEDURES
- Choose filing method (paper, on-line, XML)
- Choose method of delivery to employees (electronic or paper)
- Make note of filing deadlines and penalties for non-compliance
- Establish policies & procedures for amending or cancelling slips
- File slips and summaries with CRA
JURISDICTIONAL REPORTING
- Employer health tax returns
- Workers compensation annual reconciliation/return
YEAR-END ACCOUNTING
- Year-end accruals
- Reconcile all payroll related GL accounts
- Validate earnings and deductions are charged to correct GL cost center account
SET-UP FOR NEW PAYROLL YEAR
- Review payroll calendar for payroll processing/pay day conflicts (statutory holidays etc.)
- Weekly or bi-weekly pay frequency watch for 53/27 pay year
- How will CPP exemption be handled?
- Are any taxable benefits or deductions affected?
- Distribute new payroll cut-off schedule to HR, timekeepers, managers & supervisors and union if necessary
- Carry forward balances
- vacation accruals
- banked overtime
- unused sick days (if carry-forward allowed)
- outstanding loans payable
- garnishment balances
- Update TD1 basic annual exemption
- Remind employees to file new TD1 for additional tax credits
- Remind commission employees to file new TD1X
- Communicate new year CPP & EI statutory deductions rates and maximums
This article is an excerpt from Dialogue Magazine, which is received by members of the Canadian Payroll Association.