Question

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..

Answer 1

Regular Payments:

These are Structured so they have a scheduled frequency such as bi-weekly or monthly etc. that is paid by salary or wages.

An example of regular payment is salary in which 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 depending on how long it took.

Non Regular Payments:

these are not structured , so they do not have a scheduled frequency .

An example of Non regular payment is retroactive payment in which the employee who was terminated but hired back because of a decision of Court or intervention of Labor unions with back pay. Another example is payment of bonus or incentive etc. paid by employer for exceeding performance of employee.

In regard to statutory withholding , it depends on if the payment is regular or non regular and also if it is paid with the regular paycheck or separately as it impact C/QPP and income taxes.

With regular payments , a C/QPP pay period exemption must 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 must 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 combined with regular wages or salary and if paid separately . If combined with regular wages or salary, it must include the pay period exemption.