Question

DISCUSSION ACTIVITY Provide two examples of regular payments and two examples of non-regular payments. In your own words, explain the differences in the statutory withholding requirements between regular and non-regular payments. I

Answer 1

• Regular payments are structured so that they have a scheduled frequency such as bi-weekly that is paid by salary or wages.
• An example of a regular payment is salary in which a fixed amount is paid to the employee per pay period, not depending on the hours worked or production.
• Another example is piecework in which the employee receives a rate for each unit of production that is produced not dependent on how long it took.
• Non-regular payments are not structured, hence they do not have a scheduled frequency.
• An example of non-regular payment is retroactive payment in which the employee who was terminated and hired back because of a court decision or union intervention with back pay.
• One more example is bonus or incentive pay in which the employer pays an amount to the employee on top of the regular wages for exceeding performance, holiday bonus and etc.
• In regards to statutory withholding, it depends if the payment is regular or non-regular and also if it is paid with the regular paycheck or separately as it impacts C/QPP and income taxes.
• With regular payments, a C/QPP pay period exemption should be applied before the contributions are calculated but can only be applied once per pay period.
• Any amount that is paid separately from the regular paycheck should not include the pay period exemption.
• When a non-regular payment is made, the method used to calculate C/QPP depends on whether the non regular payment is combined with regular wages or salary and paid separately.
• If combined with regular wages or salary, it should include the pay period exemption.
• With Employment Insurance (EI), an employer can use any method to calculate EI whether it is regular or non-regular payment and if it is paid on the same cheque or not as there is no pay period exemption. EI is only deducted up to the annual maximum.
• Quebec Parental Insurance Plan (QPIP), as EI, can be calculated using any method for regular or non-regular payment and whether it is paid with or separately from an employee's regular cheque as there is no pay period exemption.
• QPIP is only deducted up to the annual maximum.
• Federal and Provincial income taxes are depended on the employee's net taxable income which is the total of earnings, taxable allowance and benefits minus the deductions set out by CRA or RQ.
• Income taxes for regular payments are calculated using the payroll deductions tables, Federal and Quebec software programs, manual calculations and government-provided formulas.
• For non-regular payments, the method used to calculate income tax is through the retroactive tax method and the bonus tax method.