10. February 2009 by admin.

California, Florida, illinois, Indiana, Massachusetts, Oregon, Pennsylvania, and Virginia have all passed legislation or regulations requiring employers to remit their child support payments electronically.

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10. February 2009 by admin.

What You Must Consider When Changing Pay Cycles

Is your company considering changing how often it’s going to pay its employees? Do you currently pay biweekly and are going to begin paying weekly or the reverse? How about semimonthly to biweekly, monthly or another period? If so, this decision is not one to implement quickly as it affects many things and takes careful planning and lots of communication between the employer and employee.

1.       Take your current payroll calendar and overlay the new payroll cycle onto it. How does it affect your annual calendar? Are there any crucial times of the year – the beginning and end of every month, quarter or year? What about other important company events that are on the calendar such as benefit enrollment periods, vacation accruals and your company’s year-end close that will be affected?2.       Pay frequency also determines how many employees will be needed in your payroll department. If you currently pay biweekly and change to weekly payroll, those employees who are tasked with processing payroll one week and catching up on other duties in the “in-between” week will no longer have that time to accomplish those tasks. Also take into consideration that any time out of the office either by illness or planned vacation will add time constraints to those employees resulting in burnout and high turnover. 3.       Are you going to pay employees in real-time or on a lag or delay basis. Real-time is a payroll that pays employees for all days up to and including payday. This is common for semimonthly pay cycles and works well with exempt employees, but can be difficult with nonexempt employees. Since you don’t know ahead of the pay date if there are overtime hours involved, you will always be playing catch-up on the next payroll. Delayed pay refers to the processing time between the end of pay period and the date employees are paid. This allows payroll to pay employees for all hours worked during the pay period including overtime hours.4.       Consult with your state regulations when considering a pay cycle change. States regulate how often employees must be paid and how long the payroll department has to process payroll before payments must be issued. If you are a multi state employer, don’t forget to consider all states in which you pay.5.       Review the programming of your payroll software, both in-house and outsourced. What are the steps required for changing a payroll cycle? If you change from biweekly to semimonthly, it will require that you adjust the rate of pay for all salaried employees.6.       Consult with your accounting department on the timing necessary to comply with the bank and tax deposit deadlines. Changing the payroll cycle will most likely affect your banking schedule and tax deposits.7.       Consider who this change will affect the most – your valued Employees. Making a change in the payroll cycle will affect everyone. Timing is critical. Although you might find it convenient to make a change at the first of the year, it could be the worst time for your employees whose budgets are overburdened because of the holidays. The first of the month is also prohibitive because most expenses (mortgage, rent, credit card payments) are due at that time. There is never a perfect time, but you must consider how it will affect the financial stability of your employees and their families when changing the pay cycle. 8.       Finally, communicate with everyone involved including the employees as soon as a decision has been made. Give employees a list of important dates to remember, such as the last pay date for the current schedule and the first pay date of the new schedule. Also, detail the dates the new schedule will cover so they know that all days worked will be paid. Even with this advance notice, the transition will be difficult for everyone. Be mindful of their situations and do every thing you can to ease the burden.

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9. February 2009 by admin.

CRA’s policy does not cover cash or near-cash gifts or awards. A near-cash item is something that can be easily converted to cash, such as gift certificates, precious metals, or securities. Additionally, CRA considers a gift or award that allows the employee a wide selection of choice in the item they receive, such as a gift certificate that cannot be converted to cash, to be equivalent to cash.Performance related to awards are also outside CRA’s  policy and are taxable income to the employee. Performance related awards include awards for meeting productions or sales targets, or for completing a project on time. CRA considers a performance related award to be an additional remuneration for the job the employee was hired to do - similar to a bonus - and, as such, is taxable.Regardless of the cost, the following gifts and awards are considered a taxable employment benefit:.        cash or near cash gifts and awards such as Christmas or holiday bonuses or near cash gifts and awards such as gift certificates;.        points that can be redeemed for air travel or other rewards; or an internal points system where an employee earns points and can redeem them for items from a catalogue;.        reimbursements from an employer to an employee for a gift or an award that the employee selected, paid for and then provided a receipt to the employer for reimbursement;.        hospitality rewards such as employer-provided team building lunches and rewards in the nature of a thank you for doing a good job;.        gifts and awards given by closely held corporations to their shareholders or related persons;.        disguised remuneration such as a gift or award given as a bonus;

manufacturer provided gifts or awards given directly by the manufacturer to the employee of a dealer.

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9. February 2009 by admin.

Where you have defined contribution plan, the amount to be reported in Box 52 of the T4 will be the total sum of both the employee and the employer’s portions. The employee deductions will always be reported in box 20 of the T4 and box D of the RL-1. There are no PA (Pension Adjustment) reporting requirements for Quebec

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9. February 2009 by admin.

The interest rate assessed on unpaid income tax withholding in both New York City and Yonkers is 8 percent, effective Oct.1, 2009

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9. February 2009 by admin.

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9. February 2009 by admin.

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9. February 2009 by admin.

Oregon
An employee’s income is exempt from garnishment if, effective Jan 1, 2009, a payment under a garnishment would result in net disposable earnings of less than:  $196 for a period of one week or less; $392 for a two-week period; $420 for any half-month period; or $840 for any one-month period.

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9. February 2009 by admin.

Canadian Payroll Updates:

Insurable hours calculations with no hours attached.
An employee who receives vacation pay without actually taking any leave does not generate any insurable hours. This also applies to such remuneration as bonuses, gratuities, lieu-of-notice payments, and retiring allowances. Payments of banked overtime is subject to EI premiums, however there are no insurable hours attached to the payment if the employee is not taking the time off.

Tax deductions from commission remuneration
If an employee is paid on commission or receives a salary plus commission, you can deduct tax in one of the following ways:

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  • Employees who earn commission without expenses If you pay commission at the same time you pay salary, add this amount to the salary, then use the table method. If you pay commissions periodically or the amounts fluctuate, you may want to use the bonus method to determine the tax to deduct from the commission payment. See the article on “Bonuses and retroactive pay increases” in our next Newsletter to find out how to do this.
  • Employees who earn commission with expenses To calculate the amount of tax to deduct, you can use the tables on diskette (TOD), the formula method or the manual calculation method found in Part A of the Payroll Deductions Tables (T4032).

Note
If an employee does not file Form TD1X, or revokes in writing-during the year-the election he or she made in completing Form TD1X, calculate the tax deductions using the table method.

Employees who claim employment expenses on their income tax return must have their employer complete Form T2200, Declaration of Conditions of Employment.

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9. February 2009 by admin.

2009 Inflation Adjustments Widen Tax Brackets and Expand Benefits
Last updated Oct. 16, 2008
WASHINGTON — For 2009, personal exemptions and standard deductions will rise and tax brackets will widen because of inflation adjustments announced today by the Internal Revenue Service.

By law, the dollar amounts for a variety of tax provisions must be revised each year to keep pace with inflation. As a result, more than three dozen tax benefits, affecting virtually every taxpayer, are being adjusted for 2009. Key changes affecting 2009 returns, filed by most taxpayers in early 2010, include the following:

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  • The value of each personal and dependency exemption, available to most taxpayers, is $3,650, up $150 from 2008.
  • The new standard deduction is $11,400 for married couples filing a joint return (up $500), $5,700 for singles and married individuals filing separately (up $250) and $8,350 for heads of household (up $350). Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.
  • Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $67,900, up from $65,100 in 2008.
  • The maximum earned income tax credit for low and moderate income workers and working families with two or more children is $5,028, up from $4,824. The income limit for the credit for joint return filers with two or more children is $43,415, up from $41,646.
  • The annual gift exclusion rises to $13,000, up from $12,000 in 2008.

Information about the pension and retirement plan-related changes can be found in IR-2008-118. Other inflation adjustments are described in Revenue Procedure 2008-66.

Source: Internal Revenue Service Website

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9. February 2009 by admin.

Canadian Payroll Update
How do you establish Insurable Hours for Record of Employment purposes when dealing with paid leave?

One hour of vacation time taken, paid sick leave, or compensatory time off is considered to be one insurable hour for employment insurance purposes

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9. February 2009 by admin.

State UI taxable wage bases
Most states have issued the new taxable wage base for 2009.  If you attended National APA’s Preparing for Year End and 2009, you received the updated chart.  If you were not able to attend and need this information, you can visit the individual state web sites and search for UI Taxable Wage Base.

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9. February 2009 by admin.

California SDI
For 2009, the state disability insurance taxable wage base will increase to $90,669 from $86,698.  The employee contribution rate will increase to 1.1 % from 0.8 % of annual earnings up to the wage base.

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9. February 2009 by admin.

Remind Employees to Check Withholding Allowance Certificates
By December 1st of each year, employers should ask their employees to file an amended federal Form W-4, for the next calendar year if they know the number of allowances has changed or will change at the beginning of the next year.

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9. February 2009 by admin.

New Process for Expanded Visa Free Travel to U.S.

Tourists and business visitors from an expanded number of countries may travel to the United States without a visa, but now they must electronically register before travel. The U.S. has added approval in the Electronic System for Travel Authorization (ESTA) as a pre-requisite for travel under the Visa Waiver Program on or after January 12, 2009. This alert provides details about these developments.

To read the full article, click here.

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