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Have you filed your tax slips?Before jumping into this article, if you haven't read Step 4 – Create, Review, and Finalize T4s and Step 5 – Create, Review, and Finalize RL-1s we strongly recommend reading those 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 update their federal and provincial/territorial tax credits on the TD1 and/or TP-1015.3-V, if required
- Review employees who are set to CPP/QPP and EI/QPIP 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.
Humi Tip
If you have Humi’s Time Off module, you can set up your time off policies to automate this!
Part 2 - Remind employees to update their federal and provincial/territorial tax credits on the TD1 or TP-1015.3 if required
Starting in 2025 in Humi, all employee tax credit settings will default to the basic personal amount at the beginning of every year.
If an employee is claiming an amount other than the basic personal amount on their Federal TD1 form or their provincial/territorial form, you must have them submit a new form so you can update their amounts in their Tax Settings.
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.
Personal Tax Credits Update
Humi will automatically default all tax credits to the basic personal amount on January 1st every year. If an employee is claiming a different amount, it must be entered manually at the beginning of every tax year.
Part 3 - Add TD1 and TP-1015.3 Additional Tax Credits to Humi
Tax credits for 2025 will default to the basic amount. This must be updated yearly if employees are claiming above the basic amount. You’ll need to add the new credits for 2025 to employee profiles where necessary.
Learn how to manage tax forms in Humi
Part 4 - Review employees who are set to CPP/QPP or EI/QPIP 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/QPIP, or CPP/QPP) may change.
Please note that employees with age exemptions are handled automatically in Humi and don’t need to have the exemption for CPP/QPP toggled during the year.
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 2025.
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 5 -Update your Workers' Compensation Rates (WCB / WSIB / CNESST) for 2025, 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 2025 rates as set by your local regulations. You can do so any time before running your first 2025 payroll!
Learn more about setting up a Workers' Compensation Rate here.
New for 2025
Ontario EHT exemption applies differently to associated employers. Associated employers in Ontario may need to customize their exemption amount for EHT. If this affects your company, please reach out to support.
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 2025, 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/RL-1 box to represent how the benefit should be reported when tax slips are prepared.
In addition, verify that each benefit offered is set up correctly to reflect whether they are eligible for income tax, EI/QPIP, or CPP/QPP 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/QPIP, or CPP/QPP 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 2024's Payroll Year-End!
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