It’s not just you – we also just shuddered at the thought of another year having flown by, and year-end tax season being upon us again.
It’s part of an employer’s legal requirements to calculate, withhold, and remit income taxes from their employees’ pay to the Canadian government throughout the year, and give employees their year-end payroll tax form (also known as a T4) by the end of February so they can file their personal income tax.
From reviewing taxable benefits, to balancing and reconciling records, to creating and filing T4s, there are a number of critical steps payroll administrators need to take to stay in compliance with the CRA – and provide a smooth tax experience for their employees.
We get it–tax season can be pretty overwhelming, even for seasoned payroll professionals. Luckily for Humi Payroll users, you have a team of payroll product experts and a payroll software to help you confidently navigate tax season!
Our payroll team received some great questions from last year’s tax season. To help make this year’s filing a stress-free process, here are your top five questions during tax season, answered.
- What does it mean when I have a +/- on Humi’s PIER Analysis Report, and what should I do now?
Humi’s Pensionable and Insurable Earnings (PIER) Analysis Report is designed to help streamline T4 preparation and quickly identify potential discrepancies in Employee CPP, Employer CPP, Employee EI, and Employer EI.
You can easily see a discrepancy if there’s an amount other than zero in any of the “variance” fields.
A positive (+) discrepancy means there’s an over-remitted amount, or an “overage”.
A negative (-) discrepancy means there’s an under-remitted amount, or a “deficiency”.
If you see a discrepancy, determine if it is valid, by:
- Totalling the CPP and Employer CPP
- Totalling the EI and Employer EI
- Taking those amounts and cross referencing them with the Remittance Report to determine if you need to remit more
If you have over-remitted, the CRA will issue a credit for the over remittances. If you’ve determined that you need to make additional payments, you can view the process in our year-end guide.
- Why is there a PIER deficiency on Humi’s PIER Analysis Report?
Humi’s PIER Report helps bring to your attention any variances that may be flagged by the CRA, although it doesn’t mean that you’ve definitely over or under remitted.
These variances need to be explained to the CRA if they question it. Reasons for variances could include, but are not limited to:
- If an employee was on payroll, with 0 pay in a pay period
- If an employee turned 18 or 70 and started/stopped contributions
- If an employee was on leave but remained on as an active employee and active on payroll
- If you were granted an EI premium reduction, using a rate that is lower than the standard employer rate of 1.4 times the employees' EI premium
- If your company was implemented mid year.
Smaller variances aren't looked at closely by the CRA, so in the cases where you are seeing pennies, it's likely a rounding error and that isn't something you’ll be required to explain.
Humi’s PIER Report is designed to give you the tools you need to flag and determine the cause of the variance so you can decide on the best course of action to take. Due to compliance and liability reasons, we’re not able to advise on specific reasons for employee variances, but we highly recommend speaking to an accountant if you are new to reconciling a PIER Report.
- How do I send my terminated employees T4s?
Once you’ve edited, reviewed, and finalized your T4 package in Humi, you’ll be able to send T4s to all employees via the email associated with their Humi profile. Terminated employees cannot log into their Humi profile anymore to edit their email, so it’s good practice to check the email on their Humi account is a personal email.
To update a terminated employee’s email address:
- Go to the “People” module on the left navigation pane.
- Under the "Directory" tab, click on the filter icon next to the "Status" column and select the "Terminated" checkbox.
- Follow the steps in this support article to update an employee’s email.
- What do I need to consider if I joined Humi part way through a calendar year?
We recommend that you follow up with your previous payroll provider to confirm they do not file T4s, as this will overstate actual earnings and will require reconciliation.
You should also check the company’s YTD import to ensure that it includes all payroll details from 2022 pay cycles processed prior to when the company onboarded with Humi. If not, use Humi’s T4 Adjuster Tool to add the YTD information.
Note: Your Humi PIER Report may flag your CPP and Employer CPP as a discrepancy since you’ve joined mid year, due to the CPP per pay period exemption which would not be captured when importing YTDs.
- An employee has informed me that there is an error on their T4. How do I revise a T4 that’s been filed already?
If you've submitted your T619 file to the CRA and discovered an error on a T4, the CRA requires that you create and submit an Amended T4, and upload a new, updated T619 on the CRA's website.
Thankfully, you can create T4 amendments in Humi Payroll! Follow these instructions for creating T4 amendments.
Have more questions? We’ve got you covered.
On January 17th, we’re hosting a live event with our payroll product expert, Greg Caskie, to help you confidently navigate tax season with Humi. We’ll take you through your role as a payroll admin during tax season, show you how to use and comprehend Humi’s PIER Analysis & T4 Preview Reports, do a walkthrough of how to enter year-end adjustments, and showcase how Humi’s T4 generation tools help make tax season a more streamlined experience.
For all things Humi payroll during year-end tax season, refer to our 2022 Year-End Guide, which includes a year-end checklist to help you stay on top of critical tax season tasks, and detailed instructions for:
- how to review and adjust records
- how to issue, edit, and file your T4s
- how to set-up for the next payroll year
If you have specific questions regarding the T4 module, our payroll support team will be happy to help! Simply submit a support ticket here.