Payroll Fundamentals 1
RQ and CRA define a car allowance as reasonable if: correct answers- The allowance is based solely on
business kilometres driven in a calendar year
- the amount provided is based on the following government-prescribed reasonable guidelines
- $0.58 per km for the first 5,000 business km's in the year ($0,62 in the Yukon, NWT & Nunavut)
- $0.51 thereafter ($0.56 for YK, NWT, NT)
- the employer does not reimburse the employee for expenses related to the same use of the vehicle
Personal Driving includes: correct answers- vacation travel
- driving to conduct personal business
- travel between home and work, even if the employer insists the employee drive the vehicle home
Business driving includes: correct answers- driving to existing and prospective clients, points of call, and
other office locations of the employer
- when an employee travels directly from home to a point of call, which is not the employer's place of
business where the employee regularly reports for work
- when the employees travels home directly from a point of call
Availability (automobiles) correct answersThe number of thirty-day periods that the automobile is
available to the employee for the current taxation year. The employee has access to or control over the
vehicle.
Automobile correct answersA motor vehicle that is designed or adapted to primarily carry individuals on
highways and streets, and has seating capacity of not more than the driver and eight passengers
If a gift or award is given to an employee in cash correct answersThe amount is considered pensionable,
insurable and taxable to the employee, subject to all statutory deductions
,Overtime meal allowance is considered non-taxable if (RQ): correct answers- overtime is done at the
employer's request and is expected to last for at least two consecutive hours
- overtime is done rarely or on an occasional basis
- the meal expenses are reimbursed upon presentation of receipts
- the meal expenses reimbursed or the value of the meal provided is reasonable
The four categories of employment income correct answers- Earnings
- Allowances
- Benefits
- Taxable expense reimbursement
Earnings correct answersDollar amounts the employer pays an employee for the work they perform
Types of earnings correct answers- a salary
- a rate for each hour worked
- a rate per piece of goods produced or picked
- a disability payment for time off work due to illness
- a payment for vacation time
- a premium payment for overtime hours worked
- a premium payment for hours worked on shift
Allowances correct answersAdditional dollar amounts paid to employees for the use, or anticipated use,
of their personal property for business purposes
Benefits correct answersDollar values attributed to something the employer has either provided to an
employee or paid for on an employee's behalf
Expense Reimbursements correct answersDollar amounts paid to employees to cover expenses that they
incur while performing their job.
, Regular payments correct answersHave an established frequency, such as weekly-paid salary or wages
Non-regular payments correct answerspayments that do not occur each pay period, for example, a
bonus or a retroactive adjustment
Salary correct answersA fixed amount of money paid to an employee for each pay period.
Salary per pay period correct answersAnnual salary / number of pay periods per year
Wages correct answersEarnings which are based on the amount of time worked, usually at a rate per
hour or per day
Regular earnings correct answersHourly rate x pay period regular hours worked
Piecework correct answersA rate of pay earned per unit of production, regardless of the length of time
taken
Self-Insured Disability correct answersEmployers often offer disability coverage that provides their
employees with income in the event of absence due to illness or injury
Sick Pay correct answersAn amount paid to an employee who is absent from work due to illness or
injury. Paid sick leave is only legislated in two provinces, PEI and Quebec. With the other provinces paid
sick leave is up to the employer.
Formal Plans correct answersA plan structured to balance both the needs of the employee and the
employer. Formal plans will outline provisions for the amount of sick leave, and whether the leave can be
carried over to a following year.
Informal plans correct answersInformal, unwritten plans exist in organizations that have no formal policy
for sick leave.
RQ and CRA define a car allowance as reasonable if: correct answers- The allowance is based solely on
business kilometres driven in a calendar year
- the amount provided is based on the following government-prescribed reasonable guidelines
- $0.58 per km for the first 5,000 business km's in the year ($0,62 in the Yukon, NWT & Nunavut)
- $0.51 thereafter ($0.56 for YK, NWT, NT)
- the employer does not reimburse the employee for expenses related to the same use of the vehicle
Personal Driving includes: correct answers- vacation travel
- driving to conduct personal business
- travel between home and work, even if the employer insists the employee drive the vehicle home
Business driving includes: correct answers- driving to existing and prospective clients, points of call, and
other office locations of the employer
- when an employee travels directly from home to a point of call, which is not the employer's place of
business where the employee regularly reports for work
- when the employees travels home directly from a point of call
Availability (automobiles) correct answersThe number of thirty-day periods that the automobile is
available to the employee for the current taxation year. The employee has access to or control over the
vehicle.
Automobile correct answersA motor vehicle that is designed or adapted to primarily carry individuals on
highways and streets, and has seating capacity of not more than the driver and eight passengers
If a gift or award is given to an employee in cash correct answersThe amount is considered pensionable,
insurable and taxable to the employee, subject to all statutory deductions
,Overtime meal allowance is considered non-taxable if (RQ): correct answers- overtime is done at the
employer's request and is expected to last for at least two consecutive hours
- overtime is done rarely or on an occasional basis
- the meal expenses are reimbursed upon presentation of receipts
- the meal expenses reimbursed or the value of the meal provided is reasonable
The four categories of employment income correct answers- Earnings
- Allowances
- Benefits
- Taxable expense reimbursement
Earnings correct answersDollar amounts the employer pays an employee for the work they perform
Types of earnings correct answers- a salary
- a rate for each hour worked
- a rate per piece of goods produced or picked
- a disability payment for time off work due to illness
- a payment for vacation time
- a premium payment for overtime hours worked
- a premium payment for hours worked on shift
Allowances correct answersAdditional dollar amounts paid to employees for the use, or anticipated use,
of their personal property for business purposes
Benefits correct answersDollar values attributed to something the employer has either provided to an
employee or paid for on an employee's behalf
Expense Reimbursements correct answersDollar amounts paid to employees to cover expenses that they
incur while performing their job.
, Regular payments correct answersHave an established frequency, such as weekly-paid salary or wages
Non-regular payments correct answerspayments that do not occur each pay period, for example, a
bonus or a retroactive adjustment
Salary correct answersA fixed amount of money paid to an employee for each pay period.
Salary per pay period correct answersAnnual salary / number of pay periods per year
Wages correct answersEarnings which are based on the amount of time worked, usually at a rate per
hour or per day
Regular earnings correct answersHourly rate x pay period regular hours worked
Piecework correct answersA rate of pay earned per unit of production, regardless of the length of time
taken
Self-Insured Disability correct answersEmployers often offer disability coverage that provides their
employees with income in the event of absence due to illness or injury
Sick Pay correct answersAn amount paid to an employee who is absent from work due to illness or
injury. Paid sick leave is only legislated in two provinces, PEI and Quebec. With the other provinces paid
sick leave is up to the employer.
Formal Plans correct answersA plan structured to balance both the needs of the employee and the
employer. Formal plans will outline provisions for the amount of sick leave, and whether the leave can be
carried over to a following year.
Informal plans correct answersInformal, unwritten plans exist in organizations that have no formal policy
for sick leave.
