Step 1: Review Records

Collect payroll records from the year.

It is important to have payroll records ready for review before year-end to identify potential discrepancies and facilitate reconciliations. Employers are legally responsible for keeping payroll and employment records for each employee for at least 36 months.

It's also a best practice for employers to backup all payroll records regardless of whether third-party payroll providers produce the records.

How to collect payroll records with Humi

Humi provides historical records for all payrolls that are processed throughout the year. In addition, special purpose reports like payroll registers, YTD summaries, remittance summaries, and COVID-19 wage subsidy summaries are available. Learn more about Humi's payroll reporting.

Collect records for additional T4 reporting requirements.

In August, the CRA introduced additional T4 reporting requirements for the 2020 tax year. Employers are required to separately report each employee's employment income for the following periods in the Other Information section:

• Code 57: Employment income – March 15 to May 9
• Code 58: Employment income – May 10 to July 4
• Code 59: Employment income – July 5 to August 29
• Code 60: Employment income – August 30 to September 26

If you were using Humi Payroll before March 15th, 2020 no further actions are required. When Humi prepares T4 slips at year-end, the relevant amounts will be automatically pre-filled in the employees' T4 records.

If you weren't using Humi Payroll prior to March 15th, at year-end you will be guided through an in-app process to retroactively enter the employment income information. It is highly recommended that you have the payroll records handy during that process.

If you don't have the payroll records on hand, you may still obtain the relevant records by contacting your previous payroll service provider, or in the case where ROEs have been issued to employees, refer to Block 15C insurable earnings by pay period.

If you have already filed all T4 slips and summary for 2020, you don't need to refile to provide the new information.

Review payroll records.

There are three things to look at when reviewing payroll records.

1. Check for discrepancies in paid benefits or additional income types.

If not done already, confirm that all types of pay offered to employees are set up correctly according to CRA-mandated requirements. Learn more.

Ensure employees’ compensations, taxable benefits & allowances, and additional income types paid throughout the year are accurate and meet statutory requirements.

Common causes of benefits or income type discrepancies:
‍- Clerical errors
- Incorrect treatment of taxable/pensionable/insurable/vacationable statuses for the type of pay
- Confusion or error in per-period amount vs annualized amount
- Annualized amounts in-app weren't updated when benefit plans were updated
- Changes made to employee or payroll records after payrolls have been processed

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2. Check for discrepancies in Income Tax, CPP, and EI withholdings, as well as remittances.

Humi Payroll automatically calculates the employer-obligated amounts for statutory deductions based on each employee's pay.

However, it's best practice that employers also perform a self-directed review of all payroll records periodically. The CRA has published a series of helpful resources to facilitate this review process:

• Calculation of CPP contributions (multiple pay periods or year-end verification)
• Payroll Deductions Online Calculator (PDOC)
• Pensionable and Insurable Earnings Review (PIER)

In addition, make sure that payroll tax account remittances match payroll registers to-date.

Common causes of CPP/EI discrepancies:
‍- Clerical or calculation errors
- Incorrect or missing YTD amounts uploaded to Humi Payroll during implementation
- Incorrect configuration of CPP/EI exemption statuses. Example: when employee turns 18 (becomes non-exempt) or 70 (becomes exempt)
- Rounding errors. It's possible for per-period CPP/EI deductions to be correct, but have minor discrepancies when per-period amounts are summed to get the annual amount due to rounding
- Records were adjusted retroactively and no longer reflected remittances made

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3. Check for discrepancies in claimed Temporary Wage Subsidy amounts vs entitled amounts.

In March 2020, as part of the nation-wide financial aid package, the Canadian Government released the the 10% Temporary Wage Subsidy for eligible employers. If you have claimed the subsidy either on your own or through Humi Payroll, make suret hat the overall claimed amounts are consistent with the actual entitled amounts. The maximum claimable amount for an employer is 10% of the gross remuneration paid to employees between March 18th, 2020 to June 19th 2020, up to a maximum of $1,375 per employee or $25,000 for the company.

If you have made claims through Humi Payroll during the policy's effective period (or retroactively after the period), you can find a summary of all claims made in the in-app COVID-19 wage subsidy report.

Common causes of TWS claim discrepancies:
‍- Clerical or calculation errors
- Overestimation of retroactive claims
- Changes made to employee or payroll records after claims have been processed
- Change in pay period dates after claims have been processed
- Additional claims made independently, not processed through Humi Payroll
- Interactions with Canadian Emergency Wage Subsidy (CEWS)

Payroll Review Summaries‍

Throughout the end of 2020 and beginning of 2021, Humi will be providing tailored Payroll Review Summaries for applicable employers via email, which will  consist of four sections:

• Preliminary Pensionable and Insurable Earnings Review (PIER)
• Benefits and income type configuration summary
• Temporary Wage Subsidy claim summary
• 2021 Pay Periods summary

If any discrepancies are discovered in your manual review process or revealed in Humi's Payroll Review Summaries, please contact support@humi.ca immediately.

Note: the purpose of the summaries is to help reveal basic errors in implementation or usage in Humi Payroll. They are not designed to replace the employer's review of payroll records. Humi does not guarantee all discrepancies are captured in the Payroll Review Summaries.