Question

In: Accounting

You work for an organization in Nova Scotia and your manager, Jessica Boyer, has asked you...

You work for an organization in Nova Scotia and your manager, Jessica Boyer, has asked you to prepare a memo detailing the remittance responsibilities and legal consequences of non-compliance with statutory remittance requirements.

studing material :

Employers are responsible for registering and maintaining a payroll program account with the Canada Revenue Agency. The employer will remit the statutory deductions withheld from the employees’ remuneration for Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and federal and non-Québec provincial income taxes, along with the employer portions of CPP and EI to this account.
In Trust

Statutory deductions are deemed to be held in trust for the Receiver General for Canada. This means the amounts withheld from employees, along with the employer’s portion, must be kept separate from the operating funds of the business and cannot be part of an estate in liquidation, assignment, receivership, or bankruptcy. Employers who make their own government remittances, as opposed to having them remitted by a service provider, must separate all CPP contributions, EI premiums and income tax withholdings, along with any employer portion, from the organization’s regular bank account. All statutory deductions and contributions must be held in a separate payroll account until the remittance is made to the Receiver General.

Remitter Type

An organization’s remittance frequency depends on its average monthly withholding amount for the second preceding calendar year. For example, the withholding amount for 2017 will depend on the employer’s average monthly withholding amount made in 2015. Employers may apply to the Canada Revenue Agency to have their average monthly withholding amount for the current or previous year used instead of the second preceding year. This would be advantageous if the employer’s payroll for the previous year was lower than the payroll for the second preceding year.

Remittance Schedule

Once an employer has been advised by the CRA what type of remitter they are, a schedule, based on that type, is used to determine when the remittances are due to the CRA. The payment for the first three types of remitters – quarterly, regular, and accelerated threshold 1 – is due by a specified date based on the payroll cheque/deposit date. The remittance for accelerated threshold 2 remitters is due three business days after the end of the weekly period, established by the CRA, in which the payroll cheque/deposit date falls. In all cases, the payroll cheque/deposit date is the date when the money is paid to the employee or directly deposited in their bank account. The period end date, the payroll processing date and the date the pay statement is handed to the employee are all irrelevant in determining the remittance date.

Penalties and Interest Charges

The CRA may assess a penalty of up to 10% of the required amount of CPP contributions, EI premiums and income taxes due for late remittances (20% on the second and later occurrences). An employer who withholds the statutory deductions but does not remit them, or fails to deduct the required deductions will be subject to a 10% penalty for the first occurrence on the amount that should have been deducted and remitted (20% on the second and later occurrences). The penalties for late remittances are as follows:
 3% if payment is late 3 business days or less
 5% if payment is late 4 or 5 business days
 7% if payment is late 6 or 7 business days
 10% if payment is 8 or more business days late Normally the penalty is only applied to the part of the amount that the employer fails to remit that is more than $500.00, however the CRA may apply the penalty to the total amount if the failure to remit, or the late remittance, was made knowingly or under circumstances of gross negligence. Again, special attention is required at the end of the year if producing any manual cheques after the final pay period for the year has been processed

Solutions

Expert Solution

TO: All the Employees of "Organization Name"

CC: Jessica Boyer, Manager

FROM: "Employee's name" who prepares MEMO

DATE: August 21, 2018

SUBJECT: Remittance Responsibilities and Legal Consequences of Non-compliance with Statutory Remittance Requirements

As of August 21, 2018, An Organization is implementing Legal Compliances and remittance responsibilites Which are to be followed by all the employees of an organization.

The organization is responsible for registering and maintaining a payroll program account with the Canada Revenue Agency. The Organization will remit the statutory deductions withheld from the employees’ remuneration for Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and federal and non-Québec provincial income taxes, along with the employer portions of CPP and EI to this account.

In Trust, Statutory deductions are deemed to be held in trust for the Receiver General for Canada. This means the amounts withheld from employees, along with the employer’s portion, must be kept separate from the operating funds of the business and cannot be part of an estate in liquidation, assignment, receivership, or bankruptcy. All statutory deductions and contributions must be held in a separate payroll account until the remittance is made to the Receiver General.

The type of remitter is, An organization’s remittance frequency depends on its average monthly withholding amount for the second preceding calendar year. Employers may apply to the Canada Revenue Agency to have their average monthly withholding amount for the current or previous year used instead of the second preceding year. This would be advantageous if the employer’s payroll for the previous year was lower than the payroll for the second preceding year.

Schedule of Remittance is, Once an employer has been advised by the CRA what type of remitter they are, a schedule, based on that type, is used to determine when the remittances are due to the CRA. The payment for the first three types of remitters – quarterly, regular, and accelerated threshold 1 – is due by a specified date based on the payroll cheque/deposit date. The remittance for accelerated threshold 2 remitters is due three business days after the end of the weekly period, established by the CRA, in which the payroll cheque/deposit date falls. the payroll cheque/deposit date is the date when the money is paid to the employee or directly deposited in their bank account.

Penalties and Interest Charges are as follows,

The CRA may assess a penalty of up to 10% of the required amount of CPP contributions, EI premiums and income taxes due for late remittances (20% on the second and later occurrences). An employer who withholds the statutory deductions but does not remit them, or fails to deduct the required deductions will be subject to a 10% penalty for the first occurrence on the amount that should have been deducted and remitted (20% on the second and later occurrences). The penalties for late remittances are as follows:
 3% if payment is late 3 business days or less
 5% if payment is late 4 or 5 business days
 7% if payment is late 6 or 7 business days
 10% if payment is 8 or more business days late Normally the penalty is only applied to the part of the amount that the employer fails to remit that is more than $500.00, however the CRA may apply the penalty to the total amount if the failure to remit, or the late remittance, was made knowingly or under circumstances of gross negligence. Again, special attention is required at the end of the year if producing any manual cheques after the final pay period for the year has been processed.


Related Solutions

You work for an organization in Nova Scotia and your manager, Jessica Boyer, has asked you...
You work for an organization in Nova Scotia and your manager, Jessica Boyer, has asked you to prepare a memo detailing the remittance responsibilities and legal consequences of non-compliance with statutory remittance requirements.
You have just started up a new company in Nova Scotia. Your company produces software for...
You have just started up a new company in Nova Scotia. Your company produces software for the “Doctors Online” company which provides medical assessments and treatment recommendations via combination of online doctor appointments and extensive screening questionnaires. You need to invest $200,000 immediately to purchase computer equipment (CCA class number 45 with a CCA rate of 45% and no salvage value). If the anticipated operating costs (excluding your salary) are $15,000 per year increasing at 5% per year (inflation) and...
Nova Scotia Emporium has been in business for 5 years. Due to a lack of understanding...
Nova Scotia Emporium has been in business for 5 years. Due to a lack of understanding of generally accepted accounting principles, errors were made in calculating the amount at which to report inventory on the balance sheet at the end of the fiscal year. These errors are summarized below: Annual Net Income Reported in Income Year Statement    Description and Amount of Error in Ending Inventory 2020 $ 202,000 Understatement $ 20,000 2021 $ 110,595 Understatement $ 40,000 2022 $ 97,500...
In the wake of the recent mass shooting in Nova Scotia,Justin Trudeau has recently implemented a...
In the wake of the recent mass shooting in Nova Scotia,Justin Trudeau has recently implemented a ban on military style assault rifles and committed millions of dollars to buying the guns of all Canadians that currently possess such weapons. Do you agree with his decision? Why or why not? write two paragraphes
Question 1 You are the marketing manager of an organization in your country. Your organization has...
Question 1 You are the marketing manager of an organization in your country. Your organization has decided to enter a new market with one of the products from its product line. After conducting extensive secondary research, you have decided to conduct primary market research to uncover some market characteristics. Using the -market research process, de"ribe how you would perform market research in your Chosen niarket. Identifi' the problem and describe what you should do at each step of the prpcess....
Question 2 Qui Limited was incorporated in Nova Scotia on May 21, 1936. The corporation has...
Question 2 Qui Limited was incorporated in Nova Scotia on May 21, 1936. The corporation has never carried on business in Canada, but held its annual directors' meeting in Nova Scotia each year from 1936 through 1966. Which one of the following best describes Qui Limited's residency status for Canadian income tax purposes for 2018? Question 2 options: 1) A full-time resident 2) A part-time resident 3) A deemed resident (sojourner) 4) A non-resident Question 3 Which of the following...
Your manager has asked you to put together a survey that you are to send to...
Your manager has asked you to put together a survey that you are to send to all employees regarding topics they would like to be trained on. Write at least 10 effective questions and add them to the survey Examples: What areas do you feel as though you have deficiencies within that you would benefit from additional training? What topics do your peers most frequently ask you questions regarding? These questions will be challenging to think of, but that is...
Assume that you are a manager in a factory and your supervisor has asked you increase...
Assume that you are a manager in a factory and your supervisor has asked you increase productivity without hiring additional workers or incurring overtime. Describe how you could motivate the existing workers using one content perspective and one process perspective. Support your answer.
As the new financial manager of your company, the CEO has asked you to provide a...
As the new financial manager of your company, the CEO has asked you to provide a brief analysis of the company’s performance to present at the upcoming board of directors meeting. The CEO has asked that you assess the company’s performance against your company’s industry. Thus, to do this, you will need to use ratio analysis or other techniques to determine areas in which the company is doing well, as well as areas that management should look at. ( you...
Assuming that you are IT manger in your organization and your president asked you to illustrate...
Assuming that you are IT manger in your organization and your president asked you to illustrate and discuss the importance of systems integration that will be achieved by adopting ERP systems. Your answer should include the necessary steps involved, expected benefits, as well as the roles of both ERP system and management in system integration.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT