Reviewing your 2020 records is the first step to making sure that year-end is a smooth process. Within this step, you should review important year-end dates, review employee and payroll records, and reconcile payroll discrepancies.
Confirm the last pay period of the year.
The last pay period is likely the best opportunity to process payroll adjustments as part of a recurring payroll to account for discrepancies during the tax year.
Once this period is over, it often entails starting a new period that belongs to the following tax year.
Confirm if the last period's pay date falls on one of the federal bank holidays. For most payroll providers, the deadline to process payroll will be adjusted to the closest business day.
How to review important payroll dates with Humi
In Humi Payroll, you can see the total number of periods in the Period column on the Run Payroll page. In the example below, the employer has a semi-monthly pay schedule with 24 periods in total, and the last period's pay date will be on December 31st, 2020.
If the final period's payday falls on one of the federal bank holidays, the adjusted run-by date will be one business day before the holiday.
Ensure all payrolls for the 2020 tax year are processed no later than 4:30pm EST on the last run-by date.
Confirm the due date for your last remittance.
Humi Payroll automatically remits your payroll deductions from each pay period to the CRA. However, if you plan on making independent remittances, keep in mind your final due date based on your remittance schedule for the 2020 tax year.
Confirm important dates for T4 filing.
First week of January 2021
- The CRA opens internet filing for T4s and T4 summaries.
First week of February 2021
- T4s and T4 summaries are ready for review in Humi Payroll.
February 28th, 2021
- All T4 slips should be issued to employees by this date.
March 1st, 2021
- T4 summaries (or T619 for electronic submissions) should be submitted to the CRA by this date.
- This is the RRSP contribution deadline.
April 30st, 2021
- Employees' personal tax returns should be filed by this date.
Confirm that your employees' personal information is correct.
- Social Insurance Number (SIN)
- Employee legal name
- Employer legal name
- Valid email (for terminated employees, this will be their personal email)
- Valid address
- CPP / EI exemption status
- Personal tax credits
- Additional tax to be deducted
In addition, make sure all employees paid within 2020 are setup in Humi Payroll, even if they have been terminated. Learn how to do this.
Confirm all types of pay offered to employees are set up correctly.
- Salary / hourly compensations. Learn more.
- Amounts and deduction behaviours for taxable benefits and allowances. Learn more.
- Amounts and deduction behaviours for additional income types. Learn more. Learn more.
- Where applicable, customize designated T4 boxes for benefits and additional income types
Other resources that may help you:
Reconcile payroll discrepancies
Remit outstanding amounts.
Remit any owed income Tax, CPP, or EI statutory deductions as part of, or before, the final remittance for the tax year through the CRA's My Business Account. There will be no penalties or interests incurred as long as the owed amounts are remitted and received by the CRA within the remittance period's due date.
Use Payment on Filing as a last resort.
As a leniency policy, the CRA offers a last resort resolution known as Payment on Filing, which allows eligible employers to remit a reconciliation payment by the last day of February without being subject to a penalty or interest.
Employers are eligible if they meet all three of the following requirements.
1. If the reconciliation payment is less than 1% of their total annual remittances.
2. They have perfect payroll compliance:
- No late or outstanding remittances
- No assessments in the year they are filing
- All T4 information filed on or before the due date
3. They must have one or more of the following circumstances:
- Employees who are paid stock-based salaries or wages
- Third-party information they rely on for insurance, health benefits, broker information, taxable benefits and/or automobile fleet mileage
- Employees who live in other tax jurisdictions
However, we generally recommend remitting any owed amounts as soon as possible, so Payments on Filing can be utilized for true emergencies, such as reconciling discrepancies that are discovered after the final remittance due date.
If applicable, reach out to email@example.com to have records adjusted retroactively. This will ensure payroll records in Humi Payroll will reflect the additional remittances made.
To avoid delays in resolution due to the high volume of requests at year-end, it is highly recommended that you provide the specifics of the desired adjustments if possible.