Canadian Payroll Reporter

6 Canadian HR Reporter, a Thomson Reuters business 2016 News January 2016 | CPR Employment insurance (EI): Maximum insurable earnings: $50,800 Employee premium rate: 1.88 per cent (outside Quebec); 1.52 per cent (in Quebec) Maximum annual employee premium: $955.04 (outside Quebec); $772.16 (in Quebec) Employer premium rate: 1.4 times the employee rate unless the employer has a government- approved reduced premium rate An EI Small Business Job Credit continues to apply in 2016 for businesses whose em- ployer EI premiums are no more than $15,000. Income tax: The federal gov- ernment has tabled legislation to change some personal income tax rates for 2016 and later years. The changes include lowering the rate for the second tax brack- et from 22 per cent to 20.5 per cent and introducing a new tax rate of 33 per cent for individu- als earning more than $200,000 a year. The rates for the other tax brackets remain at 15 per cent, 26 per cent and 29 per cent; however, due to indexing of the income tax system, the income thresholds for each rate have changed. The Canada Revenue Agency (CRA) has published the income thresholds in the Jan. 1, 2016, edition of its Payroll Deductions Formulas for Com- puter Programs (T4127). Most provinces and territo- ries also index their personal income tax systems and have adjusted their taxable income brackets and personal tax cred- its in line with consumer price index changes. Remittances: Effective Jan. 1, new employers may send remit- tances for CPP, EI and income tax to the CRA quarterly if their monthly withholdings are less than $1,000 and they maintain a perfect compliance record for their Canadian tax obligations. If a new employer qualifies for quarterly remitting, the CRA will notify the employer with its first remittance. LSVCC tax credit phase-out: The federal government is phas- ing out a tax credit for labour- sponsored venture capital cor- porations (LSVCCs). For 2016, the tax credit rate is five per cent and the maximum credit is $240. The government will eliminate the LSVCC tax credit in 2017. OETC phased out: Effective Jan. 1, employees who perform duties in a foreign country can no longer claim an Overseas Em- ployment Tax Credit (OETC) to reduce their Canadian tax liabil- ity. In 2013, the federal govern- ment began a four-year phase- out of the tax credit, which reduced the maximum amounts used to calculate the credit every year between 2013 and 2015, with tax credit eliminated as of 2016. Canada Labour Code changes: Effective Jan., 3, employees cov- ered by the Canada Labour Code may take up to 28 weeks off work, without pay, for compassionate care leave. Previously, employ- ees could take up to eight weeks off. In addition, the government has extended the period within which employees must take the leave from 26 weeks to 52 weeks. Provincial updates Alberta Minimum wage changes are ex- pected in October. Last year, the government said it would raise the general minimum wage to $15 an hour by 2018 and took the first steps by increasing the rate to $11.20 from $10.20. It also promised to eliminate a separate minimum wage rate for liquor servers as of Oct. 1. British Columbia Effective Jan. 1, the government increased Medical Services Plan premium rates. For a single per- son, the maximum monthly pre- mium is $75. For a family of two, it is $136 and for a family of three or more, the maximum monthly premium is $150. Beginning Sept. 15, the gov- ernment will index provincial minimum wage rates to increas- es in the consumer price index for British Columbia for the previous year (rounded to the nearest nickel). The government is expected to announce rate changes in March. Nova Scotia Effective Jan. 3, the provin- cial government increased the amount of unpaid time off work employees may take for bereave- ment and compassionate care leaves. Employees may now take a bereavement leave of up to five consecutive working days if a family member dies. Previ- ously, employees could take one or three days off, depending on which family member died. For compassionate care leave, em- ployees may now take up to 28 weeks off. Previously, the maxi- mum was eight weeks. Ontario The provincial government is moving ahead with plans to set up its own public pension plan. The Ontario Retirement Pen- sion Plan (ORPP) would be funded through mandatory con- tributions from employers that do not have a comparable work- place pension plan and their em- ployees. Beginning this year, the On- tario Retirement Pension Plan Administration Corporation will begin contacting employ- ers to determine if they are re- quired to enrol in the ORPP. The government will phase in enrol- ment and ORPP contributions between 2017 and 2020, begin- ning with large employers (500 or more employees). Prince Edward Island The provincial government has added new unpaid leaves to its employment standards legisla- tion to allow employees to take job-protected time off work if their child is critically ill or has disappeared or died as a result of a crime. Eligible employees may take up to 37 weeks off work within a 52-week period if their child (under age 18 years) is critically ill. Eligible employees whose child disappears as a result of a probable crime may take up to 52 weeks off work and those who child dies as a result of a probable crime, eligible employees may take up to 104 weeks off work. To be eligible for the leaves, employees must be employed by their employer for a continuous period of at least three months Quebec QPP: Maximum pensionable earnings: $54,900 Employer and employee contribution rate: 5.325 per cent Basic exemption: $3,500 Maximum annual employer and employee contribution: $2,737.05 QPIP: Maximum insurable earnings: $71,500 Employee premium rate: 0.548 per cent Employer premium rate: 0.767 per cent Maximum annual employee premium: $391.82 Maximum annual employer premium: $548.41 Income tax: There are no per- sonal income tax rate changes for 2016, but due to indexing of the income tax system, income thresholds for each rate have changed. Revenu Québec has also revised its Source Deduc- tions Return (TP-1015.3-V) to incorporate indexing and leg- islative changes to personal tax credits claimed on the form, including increasing the age at which individuals can claim a tax credit related to their age from 65 years to 66. Over the next four years, the government will raise the age each year until it hits 70 in 2020. The threshold for determin- ing whether to use Revenu Qué- bec's bonus method to calculate income tax source deductions on bonuses and retroactive pay has increased from $14,300 to $14,450 for 2016. Remittances: Effective Jan. 1, new employers may send remit- tances for source deductions and employer contributions to Revenu Québec quarterly if their monthly withholdings are less than $1,000 and they main- tain a perfect compliance record for their tax obligations. The provincial government made the change to harmonize its tax rules with those of the federal government. Overseas Employment Tax Credit phased out from 2016 on page 1 see BUDGETS page 8

• Cover