Carswell Payroll Source Alert – January 2018 Issue

2018 Ceilings for Housing Benefits Announced

The Canada Revenue Agency (CRA) has announced the 2018 ceilings for housing benefits that employers provide to employees in prescribed zones without a developed rental market. The changes reflect an increase in the shelter portion of the consumer price index.

For 2018, employers should use the following allowable ceiling amounts to determine the maximum value of housing benefits for employees in prescribed zones without a developed rental market:

For common shelter:
$195/month ($191 in 2017)

For an apartment or duplex:
$525/month for rent only ($515 in 2017)
$255/month for utilities only ($250 in 2017)
$780/month for rent and utilities ($765 in 2017)

For a house or trailer:
$878/month for rent only ($862 in 2017)
$388/month for utilities only ($381 in 2017) $1,266/month for rent and utilities ($1,243 in 2017)

For a listing of communities that qualify as prescribed zones, see https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-255-northern-residents-deductions/line-255-places-located-prescribed-zones.html

Reminder: Alberta Employment Standards Changes in Force

Just a reminder…Effective January 1, 2018, the Alberta government implemented wide-ranging changes to the province’s Employment Standards Code. The changes include:

  • allowing employees to save time in an overtime bank at a rate of 1.5 hours off for each hour of overtime worked;
  • removing a requirement that employees must be employed by their employer for at least 30 days in the 12 months before a statutory holiday to be paid for it;
  • requiring statutory holiday pay to be calculated as 5% of an employee’s wages, vacation pay and statutory holiday pay earned in the four weeks immediately before a holiday;
  • introducing new unpaid leaves for illness/injury, personal and family responsibilities, bereavement, domestic violence, critically ill family members, and parents whose child has disappeared or died as a result of a crime;
  • increasing the maximum length for compassionate care leave from eight weeks to 27 weeks;
  • increasing the maximum length of maternity leave from 15 weeks to 16 weeks; and
  • increasing the maximum length of parental leave from 37 weeks to 62 weeks.

Changes affecting the rules for hiring workers under 18 years of age will come into effect on May 1, 2018.

Reminder: B.C. MSP Premiums Reduced

Just a reminder…Effective January 1, 2018, the provincial government reduced premium rates for the Medical Services Plan (MSP) by 50% for all British Columbia residents.

The maximum premium for single individuals is now $37.50 a month, down from $75. For a couple, the maximum premium is $75 a month, a decrease from $150 per month.

Reminder: Ontario Employment Standards Changes in Force

Just a reminder…Effective January 1, 2018, the Ontario government implemented a number of amendments to the province’s Employment Standards Act, 2000. Among the changes are the following amendments:

  • Employees are now entitled to three weeks’ vacation if they have been employed by their employer for at least five years.
  • Statutory holiday pay is now calculated by using the total amount of regular wages an employee earned in the pay period right before the holiday, divided by the number of days the employee worked in that period.
  • The general minimum wage rate rose to $14.00 per hour on January 1, 2018 as part of a plan to phase-in a $15 minimum wage as of January 1, 2019.
  • A 50-employee threshold for personal emergency leave has been eliminated, giving all employees with at least one week’s service access to 10 days of personal emergency leave per year, with two days being paid days. Employees with less than one week of service are not be entitled to the paid days off, but may take the unpaid days.
  • The maximum length of Family Medical Leave has increased from eight weeks to 27 weeks.
  • Employees may take up to 104 weeks off work, without pay, if their child dies from any cause, not just due to a crime.
  • The maximum length of an unpaid leave for a crime-related disappearance of an employee's child has increased from 52 weeks to 104 weeks.
  • Employees who are the victims of domestic or sexual violence may take unpaid leaves of up to 10 days and 15 weeks.

Other changes to the Act, including those affecting equal pay and work schedules, will take effect on April 1, 2018 and January 1, 2019.

Payroll Q & A

Question: I have recently become responsible for payroll at our company. After distributing T4s to employees and filing the information return with the Canada Revenue Agency (CRA), I discovered an error in the amount reported in box (52) for a pension adjustment for a number of employees. I checked last year’s return and noticed a similar error. How do I correct it?

Answer: Whether or not you have to file amended forms depends on the size of the correction you are making. The CRA does not require employers to file an amended T4 if the difference between the previously reported pension adjustment and the amended one is less than $50. However, regardless of the amount, employers must file an amended T4 to correct a pension adjustment error if the CRA requests it or an employee asks you to accurately report it.

Since you have already distributed your 2017 T4s and submitted the return to the CRA, you will need to amend them to report the correct amount in box (52). You can do this through Internet File Transfer, Web Forms or on paper. If filing online, you only need to change the information that was incorrect. Use summary report type code "A" and slip report type code "A". To file amended slips by paper, clearly identify the revised form by writing "AMENDED" at the top of it. Besides correcting the error, include all of the correct information that was on the original form. Send a copy of the amended form to any CRA tax centre, along with a letter explaining why you made the change. Besides notifying the CRA, you have to give the employees affected by the change an amended T4.

The rules that apply for amending current-year T4s also apply to T4s for previous years. For more information on making changes to T4s, please see 9.2.4, Correcting and Replacing Forms.