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Commentary

1.1 Introduction: overview of the domestic payroll system

Canada
Canada | Commentary

1.1 Introduction: overview of the domestic payroll system

Canada | Commentary

1.     Payroll basics

1.1     Introduction: overview of the domestic payroll system

The tax year in Canada is the calendar year and the tax system is administered by the Canada Revenue Agency (CRA). Canada is a federal country, with payroll obligations at both federal and province/territory level.

Employers are responsible for making deductions and remittances from employee payment and for reporting these actions. Employers must make statutory deductions in every regular pay period basis. These statutory deductions are:

  1.  

    •     employment insurance (EI) premiums

  2.  

    •     Canada pension plan (CPP) contributions, and

  3.  

    •     income tax

Employers must make employer contributions to CPP as well as the employer portions of EI premiums.

Different types of remuneration are defined as

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