PAYROLL FUNDAMENTALS 1
QUESTIONS AND CORRECT
ANSWERS
RQ and CRA define a car allowance as reasonable if: - ANS -- 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: - ANS -- 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: - ANS -- 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) - ANS -The 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 - ANS -A 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 - ANS -The amount is considered pensionable,
insurable and taxable to the employee, subject to all statutory deductions
Overtime meal allowance is considered non-taxable if (RQ): - ANS -- 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 - ANS -- Earnings
- Allowances
- Benefits
- Taxable expense reimbursement
Earnings - ANS -Dollar amounts the employer pays an employee for the work they perform
Types of earnings - ANS -- 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 - ANS -Additional dollar amounts paid to employees for the use, or anticipated use,
of their personal property for business purposes
Benefits - ANS -Dollar values attributed to something the employer has either provided to an
employee or paid for on an employee's behalf
Expense Reimbursements - ANS -Dollar amounts paid to employees to cover expenses that they
incur while performing their job.
Regular payments - ANS -Have an established frequency, such as weekly-paid salary or wages
Non-regular payments - ANS -payments that do not occur each pay period, for example, a bonus
or a retroactive adjustment
Salary - ANS -A fixed amount of money paid to an employee for each pay period.
Salary per pay period - ANS -Annual salary / number of pay periods per year
Wages - ANS -Earnings which are based on the amount of time worked, usually at a rate per
hour or per day
Regular earnings - ANS -Hourly rate x pay period regular hours worked
Piecework - ANS -A rate of pay earned per unit of production, regardless of the length of time
taken
QUESTIONS AND CORRECT
ANSWERS
RQ and CRA define a car allowance as reasonable if: - ANS -- 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: - ANS -- 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: - ANS -- 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) - ANS -The 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 - ANS -A 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 - ANS -The amount is considered pensionable,
insurable and taxable to the employee, subject to all statutory deductions
Overtime meal allowance is considered non-taxable if (RQ): - ANS -- 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 - ANS -- Earnings
- Allowances
- Benefits
- Taxable expense reimbursement
Earnings - ANS -Dollar amounts the employer pays an employee for the work they perform
Types of earnings - ANS -- 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 - ANS -Additional dollar amounts paid to employees for the use, or anticipated use,
of their personal property for business purposes
Benefits - ANS -Dollar values attributed to something the employer has either provided to an
employee or paid for on an employee's behalf
Expense Reimbursements - ANS -Dollar amounts paid to employees to cover expenses that they
incur while performing their job.
Regular payments - ANS -Have an established frequency, such as weekly-paid salary or wages
Non-regular payments - ANS -payments that do not occur each pay period, for example, a bonus
or a retroactive adjustment
Salary - ANS -A fixed amount of money paid to an employee for each pay period.
Salary per pay period - ANS -Annual salary / number of pay periods per year
Wages - ANS -Earnings which are based on the amount of time worked, usually at a rate per
hour or per day
Regular earnings - ANS -Hourly rate x pay period regular hours worked
Piecework - ANS -A rate of pay earned per unit of production, regardless of the length of time
taken
