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Test bank For Payroll Chapter 2 (7th Edition by Alan Dryden)
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Test bank For Payroll Chapter 2 (7th Edition by Alan Dryden)
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Test bank For Payroll Chapter 2 (7thEdition by Alan Dryden)
CRA - ANSCanada Revenue Agency
Tax services Business Line - ANS- Assists over 25 million individuals, businesses, trusts and
organizations to meet their tax system obligations.
- Collects approximately $300 billion in gross taxes and excise duties per year. The equivalent
of $1.2 billion a work day.
CRA's Mission - ANS- Mission is to promote compliance with Canada's Tax Legislation and
Regulations through communication, quality service, and responsible enforcement.
CRA's Mandate - ANS- Collect revenues and administrator tax laws for the federal government
and for most provinces and territories.
- Deliver various social and economic benefit incentive programs to Canadians.
CRA tracks the success of the first part of the mandate by measuring compliance in the
following areas : - ANS- Filing
- Registration
- Remittance
- Reporting.
CRA's Program responsibilities that are specifically related to payroll include the administration
of : - ANS- The Canada Pension Plan
- Employment Insurance
- Income Tax
Statutory Deductions - ANSWithholdings from an employee's paycheque that will be remitted to
the Canadian Government.
- CPP
- EI
- Income Tax
Under the Canada Pension Plan Act and the Employment Insurance Act, the CRA is
responsible for determining : - ANS- Whether or not an individual's employment is pensionable
under the Canada Pension Plan Act or Insurable under the Employment Insurance Act.
- the types of earnings that are considered pensionable or insurable.
- How many hours an insured person has in insurable employment
, - The recovery of any debts owed as a result of overpayment of Canada Pension Plan,
Employment Insurance, or Old Age Security Benefits.
- Also responsible for ensuring that CPP contributions and EI premiums are deducted, remitted
and reported as required by legislation.
Canada Pension Plan - ANS- Operational in 1966, but fully effective in 1976
- social insurance program, designed to provide protection in the form of benefits to contributors
and their families against loss of income due to retirement.
- First Statutory withholdings.
- Employer contribution is the same as employee contribution.
Canada Pension Plan Supplementary Benefits : - ANS- Surviving spouse Pensions
- disability benefits
- benefits for orphans and children of disabled contributors
- death benefits payable upon the death of a contributor.
Employment Insurance - ANS- Second Statutory deductions
- All employers must deduct and remit EI premiums as well as add their contribution.
- Employer contribution is 1.4 times the employee contribution.
- Employers are also required to track the employee's insurable earnings and hours by pay
period for reporting purposes.
Income Tax - ANS- began in World War I, July 1917.
- intended to help finance government expenditures for World War I, it eventually became the
basic tax on all incomes.
- In 1940, the federal government legislated deductions at source.
- January 1st, 1962 all provinces imposed personal income tax; prior to that date, it was only
Quebec.
- All Canadian Provinces/Territories except Quebec have entered into a tax agreement with the
federal government. The federal government collects the tax for the provincial/territorial
governments and remits them based on personal tax returns filed by Canadian taxpayers.
-The two tax withholdings are combined into one deduction amount.
-Quebec collects it's own income tax. There are 2 separate income tax deductions, one for
federal and the other for Quebec.
Deductions at source. - ANS- Employers are responsible for withholding and remitting.
An employer who remits withholdings or deductions late is subject to the following penalties : -
ANS- 3% for 1-3 days late
- 5% for 4 or 5 days late.
- 7% for 6 or 7 days late.
- 10% for 8 or more days late.
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