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Quebec Employee Vacation & Stat Holiday Entitlement

Posted by Stacey Duggan

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Aug 14, 2014 8:30:00 AM

Hiring Quebec employees? What you need to know about sat holiday and vacation pay in Quebec, Canada.If you employ or are interested in employing Canadian workers, understand it’s hard (even for Canadians) to keep up with ever changing Canadian employment rules! Here at The Payroll Edge, we are often asked for information regarding vacation pay and statutory holiday pay, its meaning and entitlement. This is our first blog in the series ‘Employee Vacation & Stat Holiday Entitlement’ where we review these topics by province.

Trust us –we’re Canada’s Professional Employer Organization of choice.

If you employ Canadian workers in the province of Quebec, you need to verse yourself on the minimum employment standards in that province. Quebec employees’ rights to stat holidays and annual vacation time are governed by the ‘Act Respecting Labour Standards’ or ‘ALS’.

What do Employers need to know about Statutory Holiday Time off & Pay in Quebec?

All Quebecois employees working on a part time or full time basis are entitled to the following statutory holidays with pay:

1. New Year’s Day on January 1st
2. Good Friday or Easter Monday (One of these is mandatory but left to the employer’s discretion)
3. The Monday preceding May 25th (National Patriots Day)
4. June 24th (St. John the Baptiste Day)
5. July 1st or July 2nd when the 1st falls on a Sunday (Canada Day)
6. The 1st Monday in September (Labour Day)
7. The 2nd Monday in October (Thanksgiving)
8. Christmas Day on December 25th

Employers are required to pay part time or full time employees 1/20 of the wages employees earned during the four (4) weeks preceding the statutory holiday, excluding overtime.

For employees partially or wholly paid based on commission, employers must pay 1/60 of the wages earned during the preceding twelve (12) weeks.

If by nature of the business, the Canadian employee works on a statutory holiday, you as the employer has the option to pay them for that day their typical wages for the work completed or offer a compensatory holiday of one (1) day for which must be used three (3) weeks before or after the stat holiday.  Keep in mind that in either scenario, you must pay the statutory holiday pay as well.

St. John the Baptiste Day is one special holiday in Quebec where employees do not have to work the day before or after the stat holiday in order to qualify for holiday pay. If June 24th falls on a Sunday, Quebec workers are entitled to take off Monday the 25th from work.

What do Employers need to know about Vacation Time and Pay for Quebec Employee’s?

All employee’s regardless of what province are entitled to start accumulating vacation pay or time right from the commencement of their employment. What that entitlement is depends on the province of employment.

Quebec employees accumulate vacation time based on their ‘reference year’ as it’s called in Quebec, Canada. The reference year generally runs from May 1-April 30 each year but can be changed by employers to match employment start dates for instance. Employees in Quebec are entitled to two weeks of vacation time with 4% vacation pay. This two week vacation policy every twelve months lasts during reference years one to five. After five years of uninterrupted employment, Quebec employees are entitled to three weeks’ vacation time and 6% vacation pay.

Hiring a workforce in Quebec comes with great opportunity as well as stringent compliance standards. Ensure you know when and how to pay your Quebec employees by following The Payroll Edge blog. If your company is based in the United States, another country, or you are in Canada but unfamiliar with Quebec employment standards, your best option is to outsource your payroll to an Employer of Record provider based in Canada. An Employer of Record provider is similar to a Professional Employer Organization (PEO) and can provide companies seamless workforce expansion without the worry of understanding foreign employment compliance. Contact us for your Payroll Solutions in Canada.

7 Signs It's Time to Outsource Payroll

Topics: Pay Canadian Employees, vacation policy Canada, Canadian Businesses, Quebec Payroll, Quebec Stat Holidays, Quebec Vacation Time, Pay Quebec Employees

Job Creation Supported with Three Year Freeze on Employment Insurance

Posted by Stacey Duggan

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Nov 13, 2013 9:00:00 AM

government remittancesThe Harper Government announced last month that it will freeze the Employment Insurance (EI) premium rate for employees at the 2013 level of $1.88 per $100 of insurable earnings for 2014, and additionally that the rate will be set no higher than $1.88 for 2015 and 2016.

“While Canada has seen steady job creation since the end of the global recession with over one million net new jobs, significant challenges remain in the global economy. Our Government is freezing EI rates and leaving $660 million in the pockets of job creators and Canadian workers in 2014 alone which will help provide the certainty and flexibility employers, especially small businesses, need to keep growing,” said the Honourable Jim Flaherty, Minister of Finance, at an event hosted by Ottawa Camping Trailers Ltd. “This tax relief will help support Canada’s continued economic recovery and sustained, business-led, long-term growth.”

Since July 2009 employment has increased by more than one million jobs, the strongest job growth among Group of Seven (G-7) countries over the recovery. Close to 90 per cent of all jobs created since that time have been full-time positions, with more than 80 per cent in the private sector and two-thirds in high-wage industries.

The OECD recently projected Canada to lead the G-7 in economic growth for 2013 and the World Economic Form ranked Canada’s financial system as the safest and soundest in the world for a sixth year in a row.

Falling unemployment over the recovery means the EI Operating Account is on track to return to balance, and the premium rate increases previously projected are no longer necessary.

“As payroll taxes like Employment Insurance are particularly challenging for small business, today’s announcement of an EI rate freeze is fantastic news for Canada’s entrepreneurs. This move will keep hundreds of millions of dollars in the pockets of employers and employees which can only be a positive for the Canadian economy. As employers pay 60 per cent of the cost of the EI system, small firms can use these savings to hire, improve wages or help grow their businesses,” said Dan Kelly, President and CEO of the Canadian Federation of Independent Business.

Starting in 2017, as announced in Economic Action Plan 2012, the EI premium rate will be set annually at a seven-year break-even rate. This will ensure that EI premiums are no higher than needed to pay for the EI program over that seven-year period, and will result in sustainable funding, affordable rates, and ongoing predictability and stability.

Government of Canada Site

Canadian Payroll Tax Deduction Calculator

Topics: Canadian Payroll Regulations, Government Compliance, Remitting Taxes, EI, Canadian Businesses, Employment Insurance

The CRA is Watching – 5 Audit Red Flags

Posted by Stacey Duggan

|

Oct 9, 2013 11:06:00 AM

CRA is Watching 5 Audit Red FlagsHow does the CRA make sure that Canadian businesses comply with current tax law? They audit. A CRA audit can come in one of three flavors: Income Tax Audit, HST/GST Audit, and Employer Compliance Audit.

The Income Tax Audit is the most basic (and least painful) type of CRA audit. Essentially, the CRA will examine the amount of money you spent and earned. This isn't to say that an Income Tax Audit won't impact your business. It will cost you time and money.

The HST/GST Audit verifies that you have been faithfully collecting and remitting GST/HST (Goods and Services tax/ Harmonized sales tax). This CRA audit is more involved than the Income Tax Audit.

The Employer Compliance Audit is used to ensure proper withholding and remittance. It's important to note that the CRA also examines taxable benefits in this audit.

You may feel a little better knowing that the CRA will not perform both the Income Tax Audit andthe HST/GST Audit on the same firm. That's small comfort, however, when you realize that a CRA audit is time-consuming, tedious, expensive, and intrusive. It's best to avoid an audit from the start, and the best way to do that is to avoid the following red flags:

1. Neglecting to pay CPP or EI.

One of your responsibilities as a Canadian employer is to withhold CPP contributions and EI premiums from your employees' pay cheques and then to send these funds along to the CRA. In addition to your employees' contributions and premiums, you must add your own contributions to these funds. If you don't, the CRA will require that you cover both your own portion and that of your employees.

2. Reporting Consecutive Losses.

Nobody likes to admit that their businesses are suffering – until tax time, that is. The government allows for losses by offering extra tax credits. This helps fledgling businesses to make it past those difficult first years. If you report four or more consecutive losses, however, the CRA will likely audit to see what's going on.

3. Failing to Hire an Accountant or Outsourced Payroll Processing Firm.

The CRA knows that when people handle their accounting themselves, they're more prone to making errors. In addition, when you handle your own accounting, there's more temptation to include income or expenses that shouldn't be included in your reports. For these reasons, the CRA is more likely to audit small businesses who handle their accounting themselves.

4. Reporting Excessive Business Expenses.

If you report business expenses that are much higher than you usually report, or if your business expenses are higher than other similar businesses in your area, the CRA may want to find out why. Sometimes businesses report higher-than-usual business expenses when they face a big expansion or remodeling project. You can avoid this red flag by spreading your business expenses out over several years instead of tackling everything at once.

5. Receiving Most of Your Income in Cash.

The CRA looks for unreported income, and cash deposits will be scrutinized. You should be able to explain each of your cash deposits, especially if they're not being reported as income. The CRA especially targets small businesses when it comes to analyzing cash income.

An outsourced payroll processing service can help to minimize your risk of a CRA audit by guaranteeing proper withholding and remittance, helping you to become 100% compliant, and structuring your payroll processes to avoid audit red flags. If you feel that you're currently on shaky ground when it comes to a CRA audit, take steps today to improve your situation and your peace of mind.

7 Signs It's Time to Outsource Payroll

Topics: Outsourced Payroll Service, CRA Audit, Government Compliance, Best Payroll Calculator, CRA, CRA Compliant, CPP, EI, Tax Laws, Canadian Businesses, Audit Red Flags

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