Have you finished step four?
Before jumping into this article, if you haven't read Step 4 - Create, Review, and Finalize T4s, we strongly recommend reading it first.
If you've made it this far, congrats!! We're almost at the finish line. The final step to complete is setting up your new payroll year.
This article will review the following things you need to do:
- Review Carry-Forward balances, if applicable
- Remind employees to file new TD1 for additional tax credits, if required
- Review employees who are set to CPP and EI exempt
Part 1 - Review Carry-Forward Balances, if applicable
Some examples of balances that may carry over include vacation accruals, banked overtime, and unused sick days.
We recommend you review and adjust these balances as close as possible to January 1st, so employees don’t get confused.
If you have Humi’s Time Off module, you can set up your time off policies to automate this!
Part 2 - Remind employees to file new TD1 for additional tax credits, if required
Individuals are not required to complete a new TD1 every year unless their federal, provincial, or territorial personal tax credit amounts change - but it never hurts to remind them at the end of the year. Employees must submit new forms to their employers if their federal or provincial claim amounts have changed to ensure accurate payroll calculations.
So, remind employees to complete and provide new TD1 Federal and TD1 Provincial forms.
Part 3 - Review employees who are set to CPP and EI exempt
Review these employee settings in case an employee’s situation has changed. In some cases, an employee's exemption status for statutory deductions (i.e. income tax, EI, or CPP), may change.
Common examples are when an employee turns 18 and becomes eligible for CPP deductions, or when an employee turns 70 and becomes CPP-exempt.
Review Exemption Statuses
It's important to confirm all exemption statuses are up to date in Humi Payroll to avoid discrepancies in statutory deductions in 2024.
Once you've completed these steps, you're done! However, we recommend taking a little more time to review your employee payroll configurations to ensure everything is still set correctly.
Part 4 - Update your Workers' Compensation Rates (WCB / WSIB) for 2024, if applicable
Humi can help you configure and comply with the Workers' Compensation Benefit (WCB) or Workplace Safety and Insurance Board (WSIB) standards in your province or territory. It's important that you ensure you're compliant with any updates to your 2024 rates as set by your local regulations.
Learn more about setting up a Workers' Compensation Rate here.
Additional Steps to Success
To get the new year off to a good start, you should take a few minutes to confirm the following for your employees:
Review your Employee Payroll Configurations
During Year-End, it's common for employees to receive an increase in salary. Before processing your first payroll in 2024, you should ensure each employee's compensation is set up with the correct rate and effective dates.
Learn more about setting up an employee's compensation here.
Ensure all existing benefits are set up with a specified T4 Box, to represent how the benefit should be reported when T4 slips are prepared.
In addition, verify that each benefit offered is set up correctly to reflect whether they are eligible for income tax, EI, or CPP deductions.
The company contribution and employee premium amounts should also align with the anticipated annual amounts from your benefit plan payments. Learn more about managing benefits in Humi Payroll.
In addition to these earnings, there are other ways an employee can be paid that will contribute toward the employee’s gross earnings. These are generally referred to as additional income types.
Verify that each income type is set up correctly to reflect whether they are eligible for income tax, EI, or CPP deductions, or they have vacation pay requirements.
Learn more about managing income types in Humi Payroll.
You did it!
Okay, we promise this is really the end now.
You're officially ready to take on 2023's Payroll Year-End!