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Accountability
|
Accountability in payroll management is the requirement to document the process
and remuneration paid to each employee, determining how the gross and net salaries
were calculated, while ensuring all transactions remain fully traceable for audit
purposes.
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Accounting
|
Accounting is the process of measuring, recording, summarizing and analyzing the
information recorded in the General ledger.
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Accrual accounting
|
This is the process of recording expenses that have been incurred but not yet paid
or are not due until a later date.
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Administrative expense
|
In terms of a negotiated labour contract, an administrative expense is the actual
expense, in access of the actual costs of salaries and benefits, associated with
administration cost of the contract.
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Advance of WCB awards
|
These are payments made by an employer to an employee who is absent from work due
to a work-related injury or accident and who may be entitled to Workers’ Compensation
Board (WCB) benefits. Benefits have been applied for and the decision is pending.
The payments are meant to bridge the gap of time between the injury and the receipt
of the award.
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Advance tax ruling
|
It is a written statement from the Canada Revenue Agency (CRA) stating how they
interpret and apply the provisions in the Income Tax Act to a specific situation.
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Alien
|
With regard to U.S. Immigration law, an alien is a person who is not a U. S. Citizen.
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Allowances
|
Allowances are payments for use or anticipated use of an employee’s personal property;
subsidies for expenses made necessary by the kind of employment; or maintenance
of employer-supplied clothes and equipment.
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Assessable earnings
|
This is the amount of employees’ earnings that are subject to Workers’ Compensation
premiums. Assessable earnings are the total earnings (gross) before deductions,
paid to all workers, including salaries and wages, commissions, bonuses and any
other form of payment that is deemed assessable. Each provincial WC Board sets a
maximum assessable earnings amount per employee.
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Assessment
|
Assessment is the levying or fixing of rates, i.e., the determination of the premium
rate to be calculated on applicable earnings.
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Attendance record
|
This is a record, normally kept by a supervisor, which confirms attendance at work.
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Authorization for hiring
|
This document, which is usually a specifically designed form, authorizes the payroll
department to start paying an employee.
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Automated Earnings Review System (AERS)
|
The Automated Earnings Review System is a voluntary program to help detect overpayments
of Employment Insurance (EI) benefits. The information provided by employers is
matched directly to the EI benefit payments file and is used to verify the earnings
of EI recipients.
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Averaging hours
|
This is the practice of calculating an arithmetic average of hours of work over
two or more weeks (as long as the averaged hours do not exceed the daily or weekly
maximum hours of work), where the nature of the work result in irregular distribution
of hours. In most jurisdictions an employer must obtain permission from the Labour
Department to average hours.
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Back pay
|
See "Retroactive earning/pay".
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Back room resource
|
A ‘back room’ resource in labour negotiations is an expert who provides information
to the negotiating team but does not actually take part in the direct bargaining
process.
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Back-up
|
A back-up is an extra copy of any set of data that is considered to be crucial to
the organization.
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Bank reconciliation
|
This is the process of balancing the company’s record(s), showing the cheque numbers
issued and amounts paid, against the bank statement, which shows all the cheques
and deposits processed for the account.
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Benefit entitlement
|
Benefit entitlement refers to the amount of pension deemed to be earned under a
defined benefit pension plan for a particular year, for purposes of calculating
a pension adjustment.
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Benefits
|
Benefits are services provided by the employer, often in the form of insurance plans,
social services, etc., which may be paid for in whole or in part by the employer,
and which may or may not be included as part of the employee’s remuneration. Benefits
are typically administered by either the Payroll or Human Resources department.
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Bi-weekly
|
This is a time period consisting of two consecutive weeks, commencing with any day
of the week.
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Bonus
|
A bonus is an amount paid to an employee, over and above the usual earnings, normally
at the discretion of the employer. Bonuses are usually based on some measure of
performance, either by the employee, the division or the company as a whole.
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Bookkeeping
|
The process of entering each transaction that affects the financial position of
a business in a book or ledger is called bookkeeping.
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Call-in pay
|
This the minimum amount paid to an employee who is required to report to work outside
of his/her regular hours or work.
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Canada Pension Plan (CPP)
|
The Canada Pension Plan is a benefit plan run by the federal government to which
Canadian employers and employees contribute. See "Quebec Pension Plan (QPP)" for
those employed in Quebec.
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Canada Revenue Agency (CRA)
|
This agency of the Government of Canada administers, adjudicates and receives remittances
for all taxation in Canada (including Federal and Provincial income tax (excluding
Quebec provincial taxation), Employment Insurance premiums and Canada Pension Plan
contributions.
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Career average earnings pension plan
|
This is a type of defined benefit pension plan under which the pension is equal
to a percentage defined in the pension plan of earnings times each year or service.
/this plan is usually integrated with the Canada/Quebec Pension Plan.
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Cash distribution plan
|
A cash distribution plan is a type of profit sharing plan under which employees
are generally given, on an annual basis, cash payments as a share of profits.
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Casual employee
|
A casual employee is someone hired to do a job on an unscheduled, non-regular basis.
Casual employees are usually paid an hourly or whole job rate; they are not normally
eligible for any company benefit plans.
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Cheque requisition (cheque voucher)
|
This form is used to request a cheque for payment to a third party. Supporting documentation
and the form are submitted to an authorizing signing officer for approval.
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Claimant
|
A claimant is a person making a claim for benefits.
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Closed shop
|
This is a type of union security in which the employer must hire and retain only
workers who are members of the union. The closed shop is the strongest form of union.
The union acts essentially as an employment agency to the employer.
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CNT contributions
|
This is a tax paid by employers whose employees are covered by the Quebec Employment
Standards Act. The contribution is used to help defray the cost of administering
the act, and is calculated at a rate of .08% of the total wages paid by the employer
during the calendar year, to an annual maximum per employee.
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Collective liability
|
Collective liability is an obligation shared equally by a group of similar industries
or companies.
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Collective responsibility of cabinet
|
This is a fundamental principle of the British style of democracy, whereby if a
minister does not agree with a particular policy of the government, he/she must
accept the policy or action, defend it, or resign from cabinet.
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Commencement form
|
This is a document which must be completed for each new employee, with information
provided by the employee and the employer. The form is unique to each employer,
but most contain the same basic information which is required to make accurate payment
to employees. It may also be called an Appointment Form or Start-in Form.
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Commencement package
|
This pre-assembled group of documents should be completed jointly by the employer
and the new employee at the commencement of employment. The package usually contains
documents such as an authorization for hiring, commencement form, TD1, benefit application
forms and union deduction authorization. In addition, there may be introductory
information, explanation of policies and applications for other company-provided
services.
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Commercial activity
|
This term generally refers to any activity carried on in order to make taxable or
zero-rated supplies under the Goods and Services Tax (GST) system.
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Commission
|
This is paid to an employee based on a percentage, usually to sales representatives
on their sales.
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Commission de la Santé et de la Sécurite du Travail du Québec (CSST)
|
This is the Québec provincial Workers’ Compensation Board.
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Committee stage
|
The committee stage is the third stage in the federal legislative approval of a
bill, where the bill is examined in detail, amendments are considered, and witnesses
or experts may be called to give testimony or advise on the bill.
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Company-compulsory deductions
|
These deductions are required by company policy as a condition of employment. Although
these deductions are mandatory, a company still requires the employee’s written
permission before making any of the deductions.
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Compliance test
|
This is a test to obtain reasonable assurance that a payroll system is working as
it was set up to do, information produced is valid and whether the controls in place
are working properly.
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Compressed work week
|
This is a week in which the number of working days per week is reduced and the number
of hours worked per day is increased. This type of arrangement is suitable for such
jobs as nursing and firefighting, where employees generally work long hours for
a few days in a row, and then are off for a few days.
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Condition of employment
|
Company policy or union agreement may make it necessary for a prospective employee
to agree to certain benefits, deductions or conditions before employment is confirmed.
For example, signing a union card, authorizing an medical premium deduction, or
supplying a bank account for direct deposit may be a condition of employment. In
some cases, it may also include continued security clearance or continued licenses/certifications.
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Constructive dismissal
|
This is a change in the terms of employment to such a degree that the employee no
longer works under the conditions to which he/she hand agreed. Constructive dismissal
is deemed to be a termination initiated by the employer, whether or not the employee
actually resigns from his/her employment.
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Consumer Price Index (CPI)
|
The CPI measures the percentage change in value from one month to another of a constant
325 items of goods and services.
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Control audit
|
This type of audit, carried out by the internal auditors, look at the existence
and effectiveness of internal controls in either an existing computer system or
a proposed new system. The verification is done by setting up a control in which
all factors, except the variant being tested, are kept constant.
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Cost of Living Allowance (COLA)
|
This escalator clause in a collective agreement stipulates a periodic increase or
decrease in wages. It is based on a formula that is usually tied in with the Consumer
Price Index (CPI).
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Death benefit
|
A death benefit is a payment by an employer upon the death of an employee in recognition
of the employee’s service.
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Deferred Profit Sharing Plan (DPSP)
|
This is a type of profit sharing plan under which a portion of the profits of a
company are shared with the employees at a later date. Canada Revenue Agency approval
is required to defer the income.
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Defined Contribution Pension Plan
|
It is a type of pension plan under which the employees and the employer contribute
to the plan. The funds accumulate with the investment returns until retirement,
when they are used to purchase a lifetime retirement benefit for the retiree. It
is also called a Money Purchase Plan.
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Direct Deposit
|
This is an electronic transfer of funds from the employer to an instituted account
that is designated by the employee there fore avoiding the need for a paper pay
check and benefiting the employee in the way their wages are available in their
bank account on the day they are to be paid instead of having to wait for their
check to clear.
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Direct labour costs
|
Direct labour costs are the cost of labour for employees who actually perform the
work, provide the service or sell the goods.
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Director’s fee
|
It is a payment made to a person who is member of a board of directors. The directors
may or may not be employees of the company.
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Documentation
|
Documentation is the preparation and supply of documents. In payroll, documentation
includes invoice, order forms, accounting books, timecards, computer files, manual,
etc.
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Double-entry accounting
|
Double-entry accounting is a standard system used by business in which each financial
transaction or economic event is recorded in at least two accounts. Each transaction/event
results in at least one account being debited and another being credited. Total
debits must be balanced to total credits.
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Earnings
|
Earnings are the regular salary or wages that an employee receives for performing
his/her work. Earnings, no matter how computed, form the basis for the calculation
of take-home or net pay.
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Electronic Funds Transfer (EFT)
|
The transfer of money electronically from an account in a financial institution
to another account in a financial institution.
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Employee
|
This is a person who is hired to perform a function under direct or indirect supervision
and is remunerated for the work done.
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Employer
|
An employer is an individual or organization who hires an employee
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Employment Insurance (EI)
|
Employment Insurance is a plan administered by Human Resources and Skills Development
Canada (HRSDC) that provides financial assistance to employees who are temporarily
unemployed. The plan also provides benefits for employees on sick, maternity, parental
or compassionate leave. Employers and employees contribute to the plan.
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Employment Standards
|
Employment standards are covered under federal or provincial/territorial legislation
which sets minimum standards for certain aspects of employment. Areas covered include
hours of work, leaves, minimum age, minimum wage, records retention, statement of
wages, statutory holidays, termination, timing of payments, vacation time and pay.
Each provincial/territorial and federal act is unique in detail, but most cover
the same topics.
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Exempted employment
|
Exempted employment is the group of types of employment which, by legislation, are
not pensionable or insurable. Persons working under these specific conditions are
not permitted to pay Canada Pension Plan/Quebec Pension Plan contributions or Employment
Insurance premiums.
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Excess earnings
|
This is the amount by which an employee’s earnings exceed the annual maximum assessable
earnings as set by the Workers’ Compensation Board.
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Excise Tax Act (ETA)
|
This is the act that sets out the requirements for Goods and Services Tax (GST)
and Harmonized Sales Tax (HST)
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Exempt Supplies
|
These are supplies on which no Goods and Services Tax (GST) is paid or collected,
e.g., health care, child care and legal aid services.
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Experience rating
|
This is a means of adjusting an employer’s basic assessment rate for workers’ compensation
through premium reductions or surcharges. These premium adjustments reflect the
individual employer’s own claims experience in relation to the average for a group
of employers in the same or similar industries.
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Field unit
|
This is a factory or installation of the company that has employees but is located
in a different location from the head office
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Final earnings pension plan
|
This is a type of defined benefit pension plan under which the pension is based
on the member’s length of service and average earnings for a stated period of employment.
This type includes final average earnings (FAE) plans and best average earnings
plans.
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First Reading
|
This is the first stage in the federal legislative approval process of a bill, where
the bill is read a first time and is printed.
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Flat benefit pension plan
|
This is a type of defined benefit pension plan under which the annual pension is
a specified number of dollars for each year of service.
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Forfeiture
|
Forfeiture refers to employer contributions forfeited by member of a defined contribution
plan or a Deferred Profit Sharing Plan (DPSP) who terminate service in the plan
before becoming fully vested.
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Fringe Benefits
|
Refer to Benefits
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Garnishments
|
This court order, often called an Order of Garnishment, requires an employer to
deduct monies from an employee’s pay for the purpose of paying a debt to a third
party.
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General holiday
|
See "Statutory holiday"
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General ledger
|
The general ledger is an organized record, by account, of the company’s business
transactions.
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Goods and Services Tax (GST)
|
The GST is a five percent (5%) tax on the final domestic consumption of goods and
services; it is governed by the Excise Tax Act. The GST applies to most supplies
made in Canada by a supplier in the course of a commercial activity.
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Gratuity (tips)
|
A gratuity is an amount received by an employee (usually in a service position)
from someone other than the employer. Commonly called a tip, a gratuity is often
paid in cash and should be included in the annual calculation of taxable income
by the employee when filing his/her tax return.
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Green card
|
A green card is a permanent visa permitting aliens (non-US citizens) to work and
reside in the United States.
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Gross earnings
|
Gross earnings are determined by adding together all the "monies" being paid to
the employee (i.e., all taxable earnings such as regular salary, commissions, overtime
pay, bonuses, vacation pay, pay in lieu of notice, etc.). plus any taxable allowances
and/or expense reimbursements such as a taxable car allowance or a taxable tuition
reimbursement.
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Gross taxable income
|
Gross taxable income is made up of all the taxable earnings, allowances and reimbursements
of expenses being paid to the employee, plus the values or any taxable benefits.
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Group Registered Retirement Savings Plan (GRRSP)
|
A collection of individual Registered Retirement Savings Plan (RRSP) contracts which
an employer sponsors for its employees using payroll deduction facilities is referred
to as a Group Registered Retirement Savings Plan.
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Harmonized Sales Tax (HST)
|
The provincial sales tax (PST) in three participating provinces (Newfoundland and
Labrador, Nova Scotia and New Brunswick) is harmonized with goods and services tax
(GST) to create the harmonized sales tax (HST). HST applies to the same bases of
goods and services as GST at a rate of 13%. The HST in Ontario and B.C. will come
into effect on July 1, 2010.
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Home Purchase loan
|
This is a loan provided by the employer to an employee that is used to acquire a
dwelling to house the employee or a person related to the employee. It could also
be used to repay another loan that has been used to purchase the dwelling.
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Human Resource Management System (HRMS)
|
The term "HRMS" refers to a computerized system that relates specifically to Human
Resource information. This often includes payroll and benefit information and reflects
the trend toward integration of payroll and human resources systems.
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Human Resources and Skills Development Canada (HRSDC)
|
This department of the Government of Canada is responsible for the legislative provisions
of the Employment Insurance program and issuing Social Insurance Numbers.
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Imprest bank account
|
This system, commonly used in business, provides a fund or account with a designated
amount of money, from which payments for payroll cheques or automatic bank deposits
are disbursed.
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Independent Contractor
|
Independent contractors or consultants are people who provide services to companies
but are not considered employees of the company. Independent contractors generally
submit invoices for their services and are usually paid through accounts payable.
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Indirect labour costs
|
These are the cost of labour for employees who do not actually perform the work
or sell the goods, but perform administrative functions, such as a company’s supervisor,
manager, executives and administrative support staff.
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Industry classification
|
These are classifications into which employers are grouped for the purpose of determining
workers’ compensation premiums. Employers are grouped into various industry classifications
according to the type or types of industry in which the company operates. Each group
is collectively liable for the injuries within that industry is pooled and the costs
are shared.
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Information Circular (IC)
|
Information Circulars are issued by Canada Revenue Agency to provide their interpretation
of how the Income Tax Act applies to a specific situation.
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Initial Application for EI Premium Reduction
|
This form (IVAS-5022) is completed by employers who wish to apply/register for an
Employment Insurance premium reduction. The employers must have an income replacement
plan in place and send a copy of the plan along with their application.
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Input Tax Credit (ITC)
|
This is a credit employers may claim for the Goods and Services Tax they have paid
on the goods and services related to their respective business operation.
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Insurable earnings
|
Insurable earnings are those earnings which are considered insurable under the Employment
Insurance Act. Generally, this means all remuneration with the exception of any
benefit in kind.
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Insurable employment
|
Insurable employment refers to types of employment on which earnings are deemed
insurable. Generally, this means all employment in Canada, and certain employment
outside Canada, under a contract or service.
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Interactive Voice Response (IVR)
|
This technology uses touch-tone phones to access computer records on-line. Perhaps
best known in the area of benefits inquiry administration, this technology allows
individual employees to access their computerized records and have common questions
answered within a secured environment.
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Interpretation Bulletin (IT)
|
Interpretation Bulletins are issued by Canada Revenue Agency to provide their interpretation
of how the Income Tax Act and regulations are administered.
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Interruption of Earnings
|
An interruption of earnings is a layoff or separation of employment for a period
of 7 consecutive days when there is no work performed by, and no insurable earnings
paid to, an employee, OR when an employee stops working because of illness, injury,
quarantine, pregnancy, parental or compassionate leave and the earnings fall below
60% of the normal weekly insurable earnings.
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Job description manual
|
A job description manual provides a written summary of the important features and
requirement of each position. It should be organized by position and explain the
scope of work for which the position is responsible, and the reporting structure.
The descriptions are usually based on job analysis.
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Journal entry
|
This is a chronological record of each transaction indicating the date of the transaction,
the debit and credit amounts to be applied to each account, and a brief explanation
of the transaction.
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Just cause
|
Just cause is behaviour which repudiates the employment contract, e.g., willful
disobedience or misconduct or neglect of duly that has not been condoned by the
employer.
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Labour standards
|
See "Employment Standards"
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Legal deductions
|
These are deductions, other than the statutory deductions that are required by law
to be deducted from the employee’s pay, e.g., garnishment, third party demand, support
order/maintenance payments and Northwest Territories/Nunavut payroll tax. Permission
from the employee to withhold these deductions is not required.
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Legislated benefits
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These benefits are provided by law to employees; neither the employee nor the employer
may refuse to subscribe to these benefits.
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Line department
|
Line departments are responsible for carrying on the revenue-generating business
of the organization, such as sales or manufacturing. Non-line departments are service
departments, such as payroll or human resources, which support the effort of the
company but are not central to its main business operations.
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Local Area Network (LAN)
|
A local area network is a method of connecting a number of PCs together so that
they can share data. Often one computer acts as a file server for the network, retrieving
files, storing updated files, and making sure updates to the database are available
to all PCs in the network.
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Long-term disability (LTD) income
|
This type of insurance plan is designed to provide an income to a sick or disabled
employee whose inability to work extends beyond the period of short-term disability
coverage.
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Mainframe
|
This is a large-scale computer system containing large amounts of memory, storage
and input/output activity.
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Maintenance payments
|
See ‘Support orders".
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Manitoba Health and Post- Secondary Education Tax
|
This is an employer tax which is levied on the employer’s total annual Manitoba
remuneration. The tax is payable by all employers paying total remuneration in excess
of $1 million annually to employees who report for work or who are paid from an
establishment of the employer in the province of Manitoba. The tax is collected
in accordance with the Health and Post-Secondary Education Tax Levy Act.
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Maternity top up (mat top up)
|
This is an amount of money paid by the employer that exceeds the Employment Insurance
benefit the employee receives while on maternity/parental leave.
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Maximum assessable earnings
|
Maximum assessable earnings are the maximum annual earnings on which workers’ compensation
premiums are based.
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Minimum age
|
This is the youngest age at which a person can be legally employed.
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Minimum wage
|
This is the minimum hourly rate of pay an employer can pay an employee.
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|
Ministère du Revenu du Québec
|
Like the Canada Revenue Agency, the MRQ administers and (MRQ) receives remittances
for Québec provincial taxation, Québec Pension Plan (QPP) contributions, Québec
Parental Insurance Plan (QPIP) and the Québec Health Services Fund.
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Ministers of State
|
These are ministers who are typically in charge of a particular section of a large
department and would be, for example, the Minister of State for Labour.
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|
Ministers without Portfolio
|
Ministers who do not have any departmental responsibilities are referred to as Ministers
without Portfolio.
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Modem
|
This device allows computers to communicate with one another by converting differing
signals so that they are compatible.
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Money Purchase Plan
|
See "Defined Contribution Pension Plan".
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|
Monthly
|
This is a time period which is one month in length, regardless of the number of
days in the month, commencing on any day of the month and ending on the preceding
day of the following month.
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Municipal officer’s expense allowance
|
This is money paid by a municipal corporation or board to an elected officer for
the performance of duties of office.
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Net pay
|
Net pay equals gross taxable earnings less deductions.
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Net taxable income
|
Net taxable income is gross taxable income less the following: registered pension
plan (RPP) contributions; union dues; alimony or maintenance payments required by
a court order to be deducted at source; a deduction for living in a designated area;
and deductions authorized by the Canada Revenue Agency (and for Québec, the Ministère
du Revenu du Québec).
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Newfoundland and Labrador Health and Post-Secondary Education Tax (HAPSET)
|
This tax is levied on the employers total annual Newfoundland and Labrador remuneration
in excess of $1,000,000. The tax is collected in accordance with the Newfoundland
and Labrador Health and Post-Secondary Education Tax Levy Act.
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Northwest Territories/Nunavut Payroll Tax
|
This is a tax on an employee’s remuneration, imposed by Northwest Territories/Nunavut.
The tax is deducted from the employee’s pay.
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NR4
|
This Canada Revenue Agency (CRA) form is used to report amounts paid to non-residents
for payments such as pensions, annuities, and investments.
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On-line
|
This is something that can be accessed by the computer immediately upon issuing
the correct command to the computer. The term was originally used in connection
with mainframes, where certain files were always accessible, and others (e.g., archive
files) were only put on the system by-special request.
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Ontario Employer Health Tax (EHT)
|
This employer tax is paid by all employers who have a permanent establishment in
Ontario and who have employees who report for work or are paid from the Ontario
permanent establishment. The tax is calculated mainly on the total Ontario remuneration/employment
income reported in box 14 of an Ontario T4.
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Operating costs
|
Operating costs are expenses incurred to operate a vehicle such as licences, insurance,
gasoline, oil, repair and maintenance, including any Goods and Services Tax (GST)
and Québec Sales Tax (QST), if applicable.
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Optional benefits
|
These are benefits which are provided by the employer but used at the option of
the employee.
|
|
Order of Garnishment
|
See "Garnishment".
|
|
Overtime
|
Overtime is time worked beyond the normal work day or work week. Employment standards
legislation or a union contract sets the regulations for the calculation of overtime
payments.
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|
Paid vacation
|
This is a period of annual leave with pay.
|
|
Part-time employee
|
This is someone who works regularly scheduled hours but less than full-time, usually
less than five full days per week or only part days.
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Password
|
A password is a unique string of characters that must be supplied to the computer
system before access is allowed. Passwords are one part of a logical access control
security system.
|
|
Past Service Pension Adjustment (PSPA)
|
This is a type of pension adjustment that could reduce an individual’s Registered
Retirement Savings Plan (RRSP) contribution room. PSPA arises when additional pension
credits occur that would have been included in the member’s pension adjustment (PA)
for previous years (post 1989), if the upgraded benefits or additional service had
actually been provided in those years.
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Pay in lieu of notice
|
This is a payment of wages to an employee whose employment has been terminated without
notice instead of having the employee work during the notice period.
|
|
Pay period
|
This is a length of time for which earnings are calculated, e.g., weekly, bi-weekly,
semi-monthly, monthly, 13 per year, or 10 per year.
|
|
Payslip/Paystub
|
A small document, included with an employee's wage or salary, giving details of
money earned and tax and insurance paid.
|
|
Pay week
|
A pay week is a period of seven consecutive days or two or more such consecutive
periods.
|
|
Payroll
|
Payroll can have several meanings, including a list of persons to be paid and the
amount due to each; the department which administers the payroll; the total number
of people employed by an organization; the sum total of amounts paid to employees;
and the money paid out.
|
|
Payroll Deductions Formulas for Computer Programs
|
This guide (T4127), provided by the Canada Revenue Agency, contains approved formulae
and tables for companies which do their payroll calculations by computer.
|
|
Payroll Deductions Tables
|
These booklets (T4001), provided by the Canada Revenue Agency, provide tables of
amounts to be deducted for Canada Pension Plan, Employment Insurance and Income
Tax. There is a separate guide for each province/territory.
|
|
Payroll expenses
|
Payroll expenses are the costs involved in paying employees, including such expenses
as labour costs, costs required by law (i.e., statutory requirements), and costs
required by company policy or the terms of a collective agreement (e.g., the cost
of premiums required for company-paid benefits).
|
|
Payroll service
|
See "Service bureau".
|
|
PD7A (monthly remitters)
|
These are Canada Revenue Agency forms that employers complete and submit when Canada
Pension Plan contributions, Employment Insurance premiums and income taxes are remitted.
|
|
PD7A-RB (accelerated remitters)
|
These are Canada Revenue Agency forms that employers submit when Canada Pension
Plan contributions, Employment Insurance premiums and income taxes are remitted.
|
|
Pension
|
A pension is a regular payment made to an individual in consideration of past services;
it is normally a retirement income or compensation for disability.
|
|
Pension Adjustment (PA)
|
A pension adjustment is the measure of the benefit or accrual that an individual
earns in a year, in a regular pension plan or a Deferred Profit Sharing Plan (DPSP)
of the employer. The Canada Revenue Agency terms these benefits "the member’s total
pension credits".
|
|
Pension Adjustment Reversal (PAR)
|
A PAR is an amount that will restore registered retirement savings plan (RRSP) contribution
room to an individual. This applies when an individual receives a termination benefit
from a pension plan that is less than the individual’s total pension adjustment
(PAs) and past service pension adjustments (PSPAs).
|
|
Pensionable earnings
|
Pensionable earnings are those earnings on which Canada Pension Plan/Québec Pension
Plan contributions are calculated. Some companies also have pensionable earnings
under their company plan. These earnings may be different from Canada Pension Plan/Québec
Pension Plan pensionable earnings.
|
|
Pensionable employment
|
Pensionable employment is any type of employment considered pensionable under the
Canada Pension Plan Act or Act respecting the Québec Pension Plan.
|
|
Pensionable and Insurable Earnings Review (PIER)
|
This is a deficiency report produced by the Canada Revenue Agency from T4s when
the total Canada Pension Plan (CPP) contributions or Employment Insurance (El) premiums
do not equal the amount calculated on reported pensionable and insurable earnings.
|
|
Personal Tax Credit Return
|
See "TDl - Personal Tax Credits Return".
|
|
Piece rate
|
This is a rate of pay earned per unit of production.
|
|
Position/job title
|
This is an employment designation which may determine the rate of pay to which an
employee is entitled.
|
|
Posting
|
This is the process of transferring information from the journal entry to the applicable
account in the general ledger.
|
|
Premium
|
This is an amount paid in consideration of a contract of insurance or benefit, e.g.,
an Employment Insurance premium.
|
|
Prior to vesting
|
This refers to the entitlement of the member to receive back their pension plan
contributions only, plus interest, i.e., they have no vested right to receive the
employer’s contributions.
|
|
Private bill
|
A private bill confers special powers or rights on a particular person or body of
persons. Generally, private bills are to incorporate private companies, religious
organizations and other non-profit entities, or to amend existing acts of incorporation.
|
|
Private member’s bill
|
This is a bill introduced by a Member of Parliament that is not government-sponsored
legislation.
|
|
Procedures manual
|
A procedures manual is a "how-to" manual.
|
|
Profit Sharing Pension Plan
|
This is a type of defined contribution pension plan under which the employer contributes
amounts that vary each year with profits.
|
|
Provincial health care premiums
|
This is the premium required to be paid by a resident of a province that has a hospitalization
and/or medical care insurance plan that requires residents to pay a premium (British
Columbia).
|
|
Provincial Sales Tax (PST)
|
PST is a tax levied by certain provinces on various goods and services a consumer
purchases.
|
|
Public bill
|
A public bill is a bill that relates to matters of policy, such as government organizational
structures, programs, criminal law, income tax, employment insurance, etc. Public
bills may affect the general public, the corporate world, or only a particular segment
of the population.
|
|
Public Holiday
|
See "Statutory holiday".
|
|
Québec Interpretation Bulletin (IMP)
|
This is a bulletin issued by the Ministère du Revenu du Québec (MRQ) to provide
their interpretation of how the Québec Taxation Act and regulations are administered.
|
|
Québec Pension Plan (QPP)
|
This pension plan is provided by the province of Québec for its residents. Employers
and employees in Québec are required to contribute. It is similar to the Canada
Pension Plan.
|
|
Québec Sales Tax (QST)
|
QST is a consumer tax that includes the GST (5%) and provincial sales tax (7.5%)
applicable to goods and services supplied in Québec. The rate is 12.095%.
|
|
Reconciliation
|
Reconciliation is the process of analyzing the closing balance of an account to
determine its accuracy.
|
|
Record of Employment (ROE)
|
An ROE is a Service Canada form that must be completed by an employer when an interruption
of insurable earnings occurs for an employee.
|
|
Registered Pension Plan (RPP)
|
These are contributions made by employees to registered company contributions pension
plans for the purpose of providing retirement benefits.
|
|
Registered Retirement Savings Plan (RRSP)
|
An RRSP is a retirement savings plan that allows the Canadian taxpayer to contribute.
Contributions to the fund and the interest they earn are tax exempt until the funds
are withdrawn from the plan.
|
|
Regular employee
|
A regular employee is someone who works regularly scheduled hours of the organization,
usually between 35 and 40 hours per week.
|
|
Reimbursement
|
This is payment made to an employee for amounts paid by the employee from his/her
own funds that the company agreed to pay for the employee.
|
|
Remittance
|
The amounts sent to CRA which are withheld from employees payrollby employer, like
Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums,
or income tax deductions.
|
|
Remuneration
|
Remuneration is compensation or pay for services performed, including benefits and
allowances.
|
|
Report on Hirings (ROH)
|
This report is used by the Investigation and Control Unit of the Department of Human
Resources and Skills Development Canada (HRSDC) to detect overpayments of Employment
Insurance benefits. The report asks employers to identify, on a volunteer basis,
the Social Insurance Number and the first day worked of all employees hired or recalled
within the month. Once the completed reports are received, HRSDC compares the Social
Insurance Numbers to those of people who are currently receiving Employment Insurance
benefits.
|
|
Report stage
|
The report stage is the fourth stage in the federal legislative approval of a bill,
where a report on what took place in the committee stage is presented to the house.
|
|
Residence
|
In terms of Canada, residence is the determination of whether an individual is a
resident of Canada. Resi1ence is defined as "a continuing state of a relationship
between a person and a place which arises from the durable concurrence of a number
of circumstances".
|
|
Retiring allowance
|
This is a term used by the Canada Revenue Agency (CRA) to describe any payment made
to a terminating employee for loss of office compensation or in recognition of past
service, e.g., a retiring allowance would be paid when a company wants to dissuade
a terminated employee from suing for wrongful dismissal.
|
|
Retroactive earning/pay
|
This is a delayed payment of earnings owed to an employee.
|
|
Revenue Québec
|
See "Ministère du Revenu du Québec (MRQ)".
|
|
RL-1 - Employment and Other Income
|
This Ministère du Revenu du Québec (MRQ) form, similar to the T4, is used to report
remuneration paid to employees reporting to work at an establishment of the employer
located in Québec (or employees who do not report at an establishment of the employer,
but are paid from an employer’s establishment located in Québec). Québec employees
receive both a T4 and an RL-1.
|
|
RL-1 Summary
|
This Ministère du Revenu du Québec (MRQ) form summarizes the information on the
RL-ls. The amounts for Québec Pension Plan, Québec income tax, Québec Health Services
Fund and other payroll taxes are included.
|
|
RL-2 - Pension and Annuity Income
|
This Ministère du Revenu du Québec (MRQ) form is used to report the types of payments
made to Québec employees that are also reported on a T4A. These payments include
life annuity payments, death benefits, payments out of pension plans, etc.
|
|
Royal Assent
|
This is the seventh stage in the federal legislative approval of a bill, in which
a bill approved by both houses is given royal assent by the Governor General. When
a bill is given Royal Assent it becomes law.
|
|
Salary
|
Salary refers to earnings paid to an employee based on a fixed amount per period,
regardless of hours worked or production accomplished.
|
|
Salary continuance
|
These are payments made to an employee whose employment has been "terminated" but
who continues to participate in the company’s benefit plans, i.e., monies paid while
the employee-employer relationship is deemed to exist.
|
|
Second Reading
|
This is the second stage in the federal legislative approval of a bill, where the
principle of the bill is discussed and affirmed or rejected. Members debate and
vote on the principle of the bill.
|
|
Semi-monthly
|
Semi-monthly is a time period which is one-half of a month in length.
|
|
Service bureau
|
A service bureau is a firm that provides payroll services to other firms on a contract
basis. The service bureau has its own hardware, software and staff for processing
payroll.
|
|
Severance pay
|
This term is used to describe money that an employer pays to an employee at the
time of an employer-initiated termination of employment.
|
|
Shift pay/premium
|
This is a premium paid for working regularly scheduled hours outside the normal
work period of the employer.
|
|
Short-term disability (STD) income plan
|
This type of insurance plan provides replacement income for a period of weeks or
months to employees who are unable to work because of illness or accident.
|
|
Sick-leave credit plan
|
This is a type of short-term disability plan under which employees accumulate credits
based on service, e.g., two weeks per year of service or one day per month of service.
|
|
Social Insurance Number (SIN)
|
This unique nine-digit number is provided by Service Canada to each person commencing
employment in Canada. All employees must provide their employer with their SIN within
three days of employment. It is also provided to persons receiving government benefits.
|
|
Sojourn
|
To sojourn in a place means to be there on a temporary basis, i.e., not permanently.
|
|
Source Deductions and Employer Contributions
|
This booklet is provided yearly by the Ministère du Revenu du Québec (MRQ). It provides
instructions and tables pertaining to Québec income tax, Québec Pension Plan contributions,
Québec Health Services Fund and other payroll taxes.
|
|
Source Deductions
|
Return See "TP-1015.3-V - Source Deductions Return".
|
|
Stale-dated cheque
|
A stale-dated cheque is a cheque that is at least six-months old and has not been
cashed, and therefore can no longer be presented at a bank for payment.
|
|
Standard benefits
|
These are benefits which are provided to employees at the option of the employer;
they are normally granted to all full-time employees.
|
|
Standby charge
|
A standby charge represents the benefit an employee receives when an employer’s
automobile is available for an employee’s personal use.
|
|
Starting date
|
This is the date on which the employee commences employment with the employer; it
may also be called commencement date, hire date, employment date or anniversary
date.
|
|
Statutory deductions
|
Deductions that must be taken from an employee’s pay as required by federal or provincial
laws are statutory deductions. These deductions take priority over all other payroll
deductions. For example, CPP, QPP El, QPIP, Federal and Provincial income taxes.
|
|
Statutory holiday
|
A statutory holiday is a day prescribed by labour legislation/employment standards
as a legal holiday for employees, in some cases with pay; it is sometimes called
a general holiday or public holiday.
|
|
Summary of Source Deductions and Employer Contributions (RLZ1 .S V)
|
This is a cumulative statement used to reconcile the employer’s remittances for
the year with the following amounts: Québec provincial income tax and Québec Pension
Plan reported on the RL1, contributions to the Québec Health Insurance Plan, the
Québec Employment Standards contributions and Fonds national de formation de la
main-d’oeuvre (FNFMO).
|
|
Supplementary Unemployment Benefit (SUB) Plan
|
This is a voluntary employer plan which provides employees with benefits in addition
to the Employment Insurance benefits.
|
|
Support orders
|
Support orders are court orders directing an employer to deduct and remit specified
amounts from an employee’s wages for family support/maintenance or alimony payments.
They are also known as maintenance payments.
|
|
Surname
|
This is usually the legal, family or last name.
|
|
Survey of Employment, Payroll and Hours (SEPH)
|
This is a Statistics Canada report form on which employers are required to report
certain payroll-related statistics.
|
|
T2200
|
This Canada Revenue Agency form is completed by the employee and employer when the
employee is required to pay for business expenses that are not reimbursed or paid
by the employer.
|
|
T4 or T4A Summary - Summary of Remuneration Paid
|
These Canada Revenue Agency forms summarize the totals reported on the T4 or the
T4A.
|
|
T4 Segment
|
This Canada Revenue Agency (CRA) form must be completed by employers submitting
200 or more T4s under the same CRA account number.
|
|
T4 Slip - Statement of Remuneration Paid
|
This Canada Revenue Agency form must be completed for each person who received remuneration
with respect to employment, provided that deductions for Canada Pension Plan contributions,
Employment Insurance premiums and/or income tax were required, or the remuneration
was $500 or more.
|
|
T4A Slip - Statement of Pension, Retirement, Annuity and Other income
|
This Canada Revenue Agency form is used to report other types of income not reported
on the T4, such as lump-sum payments, commissions paid to a self-employed agent,
retiring allowances, patronage allocations, etc.
|
|
T4A Summary - Summary of Remuneration Paid
|
This Canada Revenue Agency form is submitted by the employer with the T4A Slips
summarizing the totals reported on the T4A Slips.
|
|
T4A-NR Slip
|
This Canada Revenue Agency form is used to report amounts paid to non-resident individuals
or corporations for services rendered in Canada not performed in the ordinary course
of office or employment.
|
|
T5
slip
|
This Canada Revenue Agency form identifies the various types of investment income
that residents of Canada have to report on their income tax and benefit returns.
|
|
Take-home pay
|
An employee’s gross earnings, less deductions equals the net amount of money the
employee receives on the pay cheque/direct deposit or the take-home pay; it is also
known as net pay.
|
|
Tax
|
Tax is an amount which must be deducted from an employee’s taxable income; the deduction
is required by both federal and provincial law.
|
|
Tax home
|
This is the country in which the employee typically resides.
|
|
Taxable benefit
|
A taxable benefit is the value of a benefit provided by the employer that is deemed
to be taxable by the Canada Revenue Agency; examples are the personal use of a company
car, life insurance, provincial health care premiums, etc. Taxable benefits may
be cash or non-cash. Non-cash benefits are sometimes referred to as in-kind benefits,
especially in Québec.
|
|
Taxable earnings
|
Taxable earnings are those earnings on which income tax must be deducted. Generally,
all Canadian earnings are taxable, although exceptions are noted in the course material.
|
|
Taxable supplies
|
These are supplies of property and services that are subject to the Goods and Services
Tax (GST).
|
|
TDI -- Personal Tax Credits Return
|
This is a Canada Revenue Agency form which an employee submits to payroll. It is
used by the employee to reduce his/her taxable income at source and provides payroll
with such important information as current address, birth date, and Social Insurance
Number. There is also a provincial version of this form.
|
|
TD1X -- Statement of Remuneration and Expenses
|
This is a Canada Revenue Agency form which a commission- remunerated employee may
use to claim his/her personal expenses at source.
|
|
Terminal charge
|
This is a lump-sum payment an employer may be required to make at the end of a lease
of a company automobile.
|
|
Terminal credit
|
This is a lump-sum payment an employer may receive at the end of a lease of a company
automobile.
|
|
Termination of employment
|
This is a severing of the employee-employer relationship.
|
|
Third party demand
|
This is an order issued by Human Resources and Skills Development Canada (HRSDC)
to collect overpayments of Employment Insurance benefits from an employee; the employer
is legally required to deduct an amount and remit the monies to the Receiver General.
|
|
Third Reading
|
This is the fifth stage of the federal legislative approval of a bill, and consists
of a review of the final form of the bill, further amendments and then either the
acceptance or rejection of the bill.
|
|
Time card/sheet
|
This document, usually completed by the employee and approved by the supervisor,
shows the time and dates worked by the employee.
|
|
Tip
|
See "Gratuity (tips)".
|
|
Top-up
|
This is a portion of an employee’s earnings paid to an employee by an employer that
exceeds the Workers’ Compensation Award or Employment Insurance benefit for maternity,
parental or compassionate leave; this excess is taxable.
|
|
Total annual assessable payroll
|
This is the total amount of an employer’s annual payroll on which the premiums for
workers’ compensation are based. Total annual assessable payroll is determined by
the types of earnings that have been legislated as assessable, and the total dollar
amount of the assessable earnings, to a maximum amount per employee.
|
|
TP-64.3
|
This is a Ministère du Revenu du Québec (MRQ) form the employee and employer complete
when the employee in Québec is required to pay for business expenses that are not
reimbursed or paid by the employer. It is similar to the T2200.
|
|
TP-1015.3-V - Source Deductions Return
|
This Ministère du Revenu du Québec (MRQ) form, which is similar to the federal TD1,
is used by employees employed in Québec to reduce their taxable income at source.
|
|
TP-1 01 5.R. 13.1-V - Statement of Commissions and Expenses for Source Deduction
Purposes
|
This Ministère du Revenu du Québec (MRQ) form, which is similar to the federal TD1X
form, may be used by a commission-remunerated employee employed in Québec to claim
his/her personal expenses at source incurred while earning commission.
|
|
TPZ-1015.R.14.1-V TPZ-1015.R.14.2-V TPZ-1015.R.14.3-V
|
These are Ministère du Revenu du Québec (MRQ) forms which Québec employers must
submit with the applicable Québec Pension Plan, Québec provincial income tax and
Québec Health Services Fund remittances. Form TPZ-1015.R.14.1-V is used by monthly
remitters; form TPZ-1015.R.14.2-V is used by twice-a-month remitters; and form TPZ-1015.R.14.3-V
is used by those who remit four times a month.
|
|
Unadministerable clause
|
An unadministerable clause is a contract provision in a labourcontract that cannot
actually be administered for a variety of reasons, ranging from vagueness of wording
to lack of information or lack of required processing capability.
|
|
Unemployment Insurance (UI)
|
See "Employment Insurance".
|
|
Union contract
|
See "Collective agreement".
|
|
Union dues
|
Union dues are amounts levied by each union against its members, which are deducted
each pay or once a month, depending on the current union contract.
|
|
Union shop
|
This is a type of union security in which the employer is free to hire non-union
workers but the employee must apply for membership within the union.
|
|
User manual
|
With regard to a payroll processing computer system, this is a guide on to how to
use the system. It should be organized from the user’s point of view, allowing for
easy and logical access of information.
|
|
Vacation pay
|
Vacation pay is an amount of money paid pursuant to a contract or employment standards
legislation that is earned/accrued during a specific period of time.
|
|
Vesting
|
Vesting means a member of a pension plan has become entitled to the full or a partial
amount of the employer’s contribution to the plan.
|
|
Voluntary deductions
|
These are deductions which are made at the employees request and require written
permission from the employee.
|
|
Wage loss replacement plan
|
This is a type of insurance plan provided by an employer which makes benefits available
to employees who are not working because of illness or other reasons. Often where
payments are made from such a plan, the employee does not claim Employment Insurance
benefits as early as he/she would have without a plan.
|
|
Wages
|
Wages are earnings which are based on the amount of time worked, usually a rate
per hour or per day.
|
|
Weekly Indemnity (WI) plan
|
This is a type of short-term disability plan which is often established for hourly
employees. WI plans are generally insured programs which pay a specified amount,
either a flat dollar amount or an earnings-related amount, for each week the employee
is absent from work due to illness or accident.
|
|
Work permit
|
A work permit is a document which allows non-Canadians to be employed in Canada.
This permit is supplied by Human Resources and Skills Development Canada (HRSDC)
once the application is approved.
|
|
Workers’ Compensation (WC)
|
Workers’ Compensation is a provincial/territorial government insurance plan designed
to provide compensation for loss of wages and other benefits to employees in the
event of a work-related accident or illness. The plan is funded by employers, who
pay annual assessments into a general accident fund, and is administered by the
Workers’ Compensation Board within each jurisdiction.
|
|
Wrongful dismissal
|
This is a term which refers to the termination of employment without just cause
or an improperly handled termination.
|
|
DOB
|
Date of Birth.
|
|
Pay Rate Unit
|
The base pay rate in hours, day, weeks, months or annual.
|
|
Pay Rate
|
The current base pay rate of the employee (as per the hiring contract, or if, it
has incremented).
|
|
Process date
|
The date on which the payroll is run. For example, if the payroll is weekly, process
the payroll at least two days before the actual pay date. This allows adequate time
for direct deposit transactions and check printing.
|
|
Company Profile
|
Concise description which, among other items of information, includes (1) firm's
name, (2) address (3) tax province (4) website address, (5) Contact details like
telephone and fax numbers, (6) bank name and address, (7) corporate account number,
(8) and bank email etc.
|
|
Routing number (bank)
|
An electronic routing number is comprised of a three-digit financial institution
number and a five-digit branch number, preceded by a "leading zero". The electronic
routing number is used for routing electronic payment items, such as direct deposits
and wire transfers
|
|
Pay type
|
Type of contract, if on hourly basis or salaried.
|
|
System Options
|
Default options for all employees for payroll process.
|
|
General Ledger Management
|
When you post payroll results to Accounting, all posting information from the payroll
results is selected, summarized, and posted to the corresponding general ledger
accounts.
|
|
Earnings
|
Options to select Taxable, Non-taxable, and insurable earnings.
|
|
Benefits Management
|
Options to select Taxable benefits and vacation benefits.
|
|
Deductions Management
|
Statutory (CRA mandatory) deductions, non-statutory deductions and third party deductions.
|
|
Time Summary (Report)
|
Report by hours (regular, overtime, etc.) paid to an employee/s, with details of
rate of pay, amount paid, and GL account for a specified period.
|
|
Payroll Journal (Report)
|
A record of payroll details including the employee’s name, hours worked, (for hourly
employees), earnings, benefits, statutory and non-statutory deductions, and year-to-date
vacation pay.
|
|
Terminated
|
An employee who has been removed from the payroll of a company and is not longer
employed by that company.
|
|
Employee Type
|
Permanent (full-time)
|
|
T/R
|
Short for terminate or reinstate - used in when managing employees and changing
their employment status.
|
|
Date of Birth
|
employee's birth date
|
|
Employee number
|
Unique identifier for the employee. It is good practice not to use the employee's
social insurance number or other government identification number. This system automatically
generates employee numbers for you.
|
|
Security type
|
When adding an employee, you can set the permission level they will have when accessing
the system. "Employee" will provide the individual with standard payslip
access for their own data. "Manager" will allow the individual to view
and enter data into the payroll system. "Administrator" will allow the
individual to make changes and edit the payroll setup for your company.
|
|
Type of Payment
|
Indicates how the employee will receive their payments (ie printed cheque, direct
deposit etc)
|
|
Automatic Vacation
|
Allows you to automatically attribute vacation pay to an employee using standard
employment rules.
|
|
Vacation pay owing
|
Amount of vacation pay (in hours) that is currently owed to the employee. Typically
used when setting up a new employee in the system.
|
