Year end is always a busy time in the payroll department. To help things run more smoothly, the Canadian Payroll Association has created this payroll year end 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
- Review payroll set-up to make sure earnings, taxable benefits and deductions have been
programmed accurately - Update any manual or cancelled cheques to payroll
- Reconcile payroll bank account for uncashed or stale-dated cheques that need to be replaced
or cancelled - Balance payroll tax account remittances to the payroll register
- Run test T4/RL-1 slip and summary report to validate earnings and deductions are reporting in the
correct boxes and balance to the payroll register - Conduct self-PIER audit of CPP and EI statutory deductions
- Remit outstanding CPP and EI statutory deductions with or before final remittance
for tax year - Ensure accurate social insurance numbers are reported
- Update WCB awards reimbursed to the employer
TAXABLE BENEFITS
- Ensure taxable benefits are 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, online, 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
- Perform year-end accruals
- Reconcile all payroll related GL accounts
- Validate earnings and deductions are charged to correct GL cost centre 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 as necessary
- Carry forward balances
- vacation accruals
- banked overtime
- unused sick days (if carry-forward allowed)
- outstanding loans payable
- garnishment balances
- Update TP-1015.3-V basic annual exemption
- Remind employees to file new TD1 for additional tax credits
- Remind commission employees to file new TD1X/TP-1015.R.13.1-V
- 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. If you are not already a member, we encourage you to join.