Prepare for 2022

If you completed our 2021 Year-End Payroll Guide, congrats! The hardest part is over – but we aren't done yet. 

To prepare for the next year, we recommend reviewing your "2022 Payroll Calendar" and confirming your "pay schedule frequency" and the "number of pay periods."

An employer may consider changing the "pay schedule frequency" based on various internal and external factors, such as:

• Changing payroll providers
• Reducing frequency to decrease operating costs
• Adhering to new remittance frequency requirements due to the company's growth

Whether or not you're expecting a change in Payroll frequency going into 2022, it's important to confirm the schedule is set up with the correct frequency in Humi Payroll.

In addition, ensure that the number of pay periods for 2022 is correct given the finalized pay schedule frequency:

Confirm your pay period dates

‍Humi Payroll automatically creates pay periods for the tax year based on your pay schedule. There are five key dates within each pay period.‍

If a pay date falls on a statutory holiday, Humi will automatically set the pay period's cheque date to the closest business day before the holiday.

Verify your "remitter type" for 2022

Confirm your "remitter type" and "remitting frequency"

As an employer, the CRA determines when you must pay (remit) payroll source deductions. It is normally based on your average monthly withholding amount (AMWA) from two calendar years ago.

You can view your "remitter type" through CRA's My Business Account, and be sure to update your "remitter type" in Humi if it has changed for 2022. 

Review your employee "payroll configurations"

Confirm compensations are up to date

During Year-End, it's common for employees to receive an increase in salary. Before processing your first payroll in 2021, 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.

Confirm benefits are up to date

Each employee benefit you offer may have direct implications on payroll remittances as well as tax calculations and reporting. It is important to understand the deduction implications for each benefit offered. Learn more about taxable benefits.

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.

Confirm additional income types are up to date

Typically regular earnings, or regular compensations, are salaries and wages paid to employees on a recurring basis.

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.

Review employee tax credits, exemptions, and additional tax deductions

Confirm tax credits are up to date

On a federal and provincial level, employees are subject to basic personal tax credits. These tax credits are applied toward the employees' taxable income automatically such that the taxable income will not be taxed until they exceed the credit amounts.

If employee federal or provincial claim amounts have changed, they must submit new forms to their employer to ensure accurate payroll calculations. Otherwise, make sure tax details are up to date with the 2022 basic exemption amounts. In addition, remind employees to complete and provide new TD1 Federal and TD1 Provincial forms for any additional tax credits.

Confirm exemption statuses are up to date 

In some cases, an employee's exemption statuses 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.

Confirm additional taxes to be deducted are up to date

Sometimes employees may opt for having additional tax deducted from their income per period. This could be due to various reasons such as to offset previously under-deducted amounts, or to cover for an increased tax rate resulting from holding multiple jobs because each independent payroll provider may not have the full context of the employee's employment income.

On the other hand, it's also possible for a previously set up amount to become non-applicable going into 2022.

Its best practice is to always confirm if the amounts specified in Humi Payroll are up to date.