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Winter 2003 E-NOTES

To print the Winter 2003 E-notes click here:


CONTREN MANAGEMENT CONSULTANTS INC.

WINTER 2003 NEWSLETTER

 

STATUTORY (PUBLIC) HOLIDAYS

A reminder that the following are public holidays in Ontario, Christmas Day, Boxing Day and New Years Day.

If your employee works any public holiday they are entitled to either 2.5 times their regular pay or 1.5 times their regular pay plus a day off with pay.

As mentioned previously all employees are entitled to public holiday pay immediately upon hiring. There is no longer a three month exemption upon hiring. This means part time seasonal workers will be paid public holiday pay based on the formula (daily hours worked preceding four weeks/20).

A simple way to avoid paying public holiday pay to new part time seasonal employees is to terminate the employee on Dec 24 and rehire the employee, if required, Dec 27. Legally you would be within your rights as an employer and could save yourself the public holiday pay. Of course you would be viewed as the Grinch to your remaining employees but you would be following the Employment Standards Act.

PAYROLL INFORMATION

For calendar 2003 the Federal personal exemption amount (draft) has increased to $7,756 and the Provincial personal exemption amount (draft) has increased to $7,817. Please adjust your payroll ledger information accordingly.

For calendar 2003 the CPP deduction rate has increased to 4.95% ($1,801.80 total deduction) and the maximum earned income has increased to $39,900. For your information the CPP rate was 2.5% in 1994 which means we, as business owners, are paying more then double the CPP employers portion then just nine years ago. Lower personal taxes help our employees but the employer is paying an additional hidden "tax" of about $1,000 per full time employee.

For calendar 2003 the EI rate has decreased to 2.1% ($819.00 total deduction) while the maximum earned income has remained constant at $39,000.

 

Note that the proposed Ontario personal tax rate reduction for January 1, 2003 has been deferred until January 1, 2004.

 

 OFFICE CHRISTMAS HOURS

Our office will be closed from the afternoon of December 24, 2002 to the morning of January 2, 2003 in order to allow Debbie to fully enjoy the spirit of the Christmas season.

We will be checking our messages on a timely basis throughout the Christmas holidays.

 

SIMPLY ACCOUNTING

Simply Accounting has developed an updated package called Simply 2003. They are still supporting Version 9 and in fact have a special deal on presently for payroll updates for Version 9. There will be no new updates for Version 8 in 2003.

As a point of interest Simply Accounting still supports the old DOS program and is presently issuing Version 4.0U updates for calendar 2003.

 

T4 INFORMATION

All businesses should be receiving their 2002 payroll package from the Federal government the first week of December. For the clients who utilize our services to prepare your T4's and T4 Summary we ask that you include this package with your companies payroll information in January 2003.

Simply Accounting users should make a separate backup diskette of their payroll information prior to changing the system date to January 1, 2003. You can prepare your T4's anytime in 2003 by selecting the previous year T4 option.

Please note that the 2002 T4 internet filing options have expanded but may require additional work. For clients who use a payroll package, including Simply Accounting, it will be easier and more accurate to print the T4's and T4 Summary and mail this information to Revenue Canada.

 

VEHICLE DEDUCTIONS

At present the Department of Finance has not introduced new vehicle deduction limits so for 2003 the amounts remain the same. If new amounts are announced we will post the changes at our website,

 

RRSP DEDUCTIONS

For calendar 2004 and future the RRSP deduction maximums increase. The yearly maximum will still be a function of earned income (18% of income) therefore your earned income in 2003 must increase to be eligible for the maximum deduction in 2004. For 2006 and future years the maximum deduction and corresponding income will be indexed to inflation so we there is no definitive amounts at present.

We have outlined the future RRSP amounts below:

A reminder that any unused RRSP eligibility carries forward forever.

MAX DEDUCTION INCOME REQUIRED

ELIGIBILITY FOR NEXT YR CONT

2003                       $13,500        $80,556

2004                       $14,500        $86,111

2005                       $15,500       Indexed

2006 & future     Indexed        Indexed

EMPLOYEES TIME OFF

A number of our clients have conflicting information regarding employees who are absent from the workplace. Some employers pay for time off sick or for a death in the family while other employers allow unpaid time off for the same circumstances, when requested by the employee. In most cases this is the result of the companies written policy but depending on the size of the company this is not a legal requirement.

The Employment Standards Act is very clear about what is called "Emergency Leave".

Emergency leave is unpaid, job protected leave of up to 10 days per year. This time off may be taken in case of illness, injury or other urgent matters. The key for employees being eligible for emergency leave is that their employer normally has 50 or more employees. If the company has less then 50 employees there is no provision for any time off.

The reality is that most, if not all, "small" employers will not terminate an employee if they miss work for illness, death or injury but the employee does not have the right to time off. The fact that the employer has allowed their employee time off, whether paid or unpaid, has been made at the employers singular discretion. If the employee states that they have the right to this time off please refer them to the Employment Standards Act section on Emergency Leave.




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Contren Management Consultants Inc.
109 Industrial Dr., P.O. Box 295
Dunnville, Ontario. Canada N1A 2X5
Tel: (905) 774-2977
Fax: (905) 774-1096

E-mail: info@contrenmanagement.com


Contren Management Consultants Inc. 1999. All Rights Reserved.