Canadian Payroll Reporter

2 Canadian HR Reporter, a Thomson Reuters business 2014 News August 2014 | CPR August 2014 | CPR 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 al- lows 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, in- cluding drop-down menus that enable users to provide more in- formation in block 16 (reason for issuing ROE) instead of enter- ing 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 spe- cific. They are more precise. You don't have to give us a comment in block 18 to explain why, for ex- ample, you chose K (the "Other" option in block 16)," said Char- bonneau. Instead of only being able to choose "Other" for code K, users now have a number of more spe- cific 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 re- quested by Employment Insur- ance, ROE requested by employ- ee or Canadian Forces Queen's Regulations/Orders. Code E now contains a num- ber of options to explain why an employee quit, including fol- lowing 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 ad- vises using Code A – Shortage of work/End of contract or season. If an employee is leaving employ- ment 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 pro- cessing time for an EI claim. Legislative changes While Service Canada's session focused on technology-related changes, the CRA's presenta- tion highlighted recent legisla- tive amendments and other is- sues affecting payroll. Marlene Sylvest, a manager in the Trust Accounts Programs Division of the CRA, updated attendees on changes the federal govern- ment 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 employ- ers withhold from employees' earnings on or after Jan. 1, 2015. The category of regular remit- ter will apply to employers with an average monthly withholding amount of less than $25,000 two calendar years ago. The thresh- old is currently less than $15,000. Employers in this group send in remittances monthly. The average monthly with- holding amount for threshold 1 remitters will be $25,000 to $99,999. It is currently $15,000 to $49,999. Employers in this cat- egory 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 remit- tances four times per month. The changes will not af- fect employers whose average monthly withholding amount is less than $3,000. They will con- tinue to send in remittances on a quarterly basis. "If your remitter status will be changing, you will receive a con- firmation 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 chang- es 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 firefight- er tax credit implemented a few years ago. Both credits are calcu- lated 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 organiza- tions are members of the Search and Rescue Volunteer Associa- tion of Canada (SARVAC), the Civil Air Search and Rescue As- sociation 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 respond- ing to and being on call for search and rescue and similar emergen- cies, going to the organization's meetings and taking part in man- datory training. Individuals who do at least 200 hours of combined search and rescue and volunteer firefight- ing 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 emer- gency volunteers. On the employer side, the gov- ernment 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 pre- miums 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 premi- ums. For 2013, the government raised the threshold to $15,000. Employers do not apply for the credit. Instead, the CRA au- tomatically calculates it after an eligible employer files its 2011, 2012 or 2013 (as applicable) T4 return. To receive the 2011 cred- it, 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 sub- mit 2013 T4s by the end of 2016. SINs Sylvest also discussed admin- istrative 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 practi- tioners to make sure employees provide their correct name and SIN when they begin working for an employer. To ensure em- ployee information is correct, Sylvest said payroll/HR should ask to see other pieces of identifi- cation from an employee such as a driver's license. Changes to source deduction remittances from Web on page 1 THE AVERAGE MONTHLY WITHHOLDING AMOUNT FOR THRESHOLD 1 REMITTERS WILL BE FROM $25,000 TO $99,999. IT IS CURRENTLY FROM $15,000 TO $49,999.

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