GIF
Payroll

Manage Benefits

Humi Payroll greatly simplifies setup, remittance, and reporting of employee benefits, but in order to manage these benefits effectively, we recommend first gaining a basic understanding of taxable benefits.

Non-cash and cash benefits are set up differently in Humi Payroll as they often have different behaviours and tax implications. This guide will cover the steps to set up both types of benefits.

  • Set up non-cash benefits
  • Set up cash benefits

Set up non-cash benefits

When to setup non-cash benefits in payroll

Each non-cash benefit should be set up in payroll based on the first effective date of the benefit. Prior to processing your first payroll with Humi, it is important to allot enough time to ensure the benefits are set up correctly.

Common instances where typical health benefits are set up on payroll:

When new benefit plan becomes effective

For example, if the plan is effective February 1st and the payroll schedule is semi-monthly, benefits need to be set up before the Feb 1st - 15th pay period’s pay day, which is normally Feb 15th.

New employee with benefits

If a new employee starts on February 1st with a 3-month waiting period, benefits need to be set up before the May 1st- 15th pay period’s pay day, which is normally May 15th. Also note that in this example because of the mid-month effective date, most benefit carriers do not prorate but will still charge for the benefits.

Have a copy of your benefits bill ready

This helps identify the different benefits and the premium monthly. Note that if you are located in a province with sales taxes, the benefit must include the tax amounts.

Identify non-cash taxable benefits

It is important to distinguish between taxable and non-taxable benefits. Adding non-taxable benefits to payroll is optional as no statutory deductions are calculated, and could become an additional burden to managing payroll.

There are four main components to setting up and paying a non-cash benefit:

  • Create and configure the benefit
  • Assign applicable employees to the benefit
  • Add default annualized benefit amounts to employees

Create and configure the benefit

  1. Navigate to the Payroll page by clicking Payroll from the menu column
  2. Navigate to the Benefits page by clicking Benefits tab
  3. Click the button on the bottom right and fill in the basic details of the new benefit to be added.
  1. Enter the benefit details as well as specify which T4 box the benefit should be reported in. It is highly recommended you refer to the CRA's Benefits Reference Chart to ensure the benefit is subject to the correct source deductions. *Note that Box 14, 16-18, 22, 24, and 26 are automatically assigned by Humi Payroll.
    Click Save to create the new benefit. Once created, you will be taken to the benefit’s detail page where you will be able to further configure the benefit.
  1. Configure benefit. This is where you can enter information about the benefit’s Default Annual amounts (default amount for all employees who receive this benefit), as well as whether it is taxable, insurable, and pensionable.
*The company contribution’s CPP, EI, and tax withholding settings are all turned on by default. Admin must confirm the appropriate withholding settings are accurate as they directly affect withholding calculations in every payroll where the benefit is applied.

Assign applicable employees to the benefit

  1. Navigate to the Payroll page by clicking Payroll from the menu column
  2. Navigate to the Benefits page by clicking Benefits tab
  3. From the list of benefits, select the benefit which you want to assign employee(s) to
  4. Navigate to the benefit’s employees section by clicking the Employees tab
  5. Click the button on the bottom right. Here you will be able to assign employees to the benefit as well as un-assign existing employees from the benefit.
  1. Once employee(s) are assigned to a benefit, they will show up as entries on the benefit’s Employees section alongside their default benefit amounts

Add default annualized benefit amounts to employees

  1. Navigate to the Payroll page by clicking Payroll from the menu column
  2. Navigate to the Benefits page by clicking Benefits tab
  3. From the list of benefits, select the applicable benefit
  4. Navigate to the benefit’s employees section by clicking the Employees tab. Here you will find a list of employees who have been assigned to the benefit

There are two types of annualized benefit amounts you can enter for each employee who is assigned to a benefit:

Employee Premium - benefit amount that the employee pays and is deducted from the employee’s gross pay.

For example, if the employee’s own contribution to life insurance plan is $10 per month, the annualized amount for employee premium would be $10 x 12 = $120 and the amount entered here would be 120.

Company Contribution - benefit amount that the company pays and is contributed to the employee’s gross pay.

For example, if the company contributes $8.50 per month to the employee’s life insurance plan, the annualized amount for company contribution would be $8.50 x 12 = $102 and the amount entered here would be 102.

It is also common for both the employee and the company to split up a benefit’s cost. In this case both the employee premium and company contribution would be present.

Once the benefits are set up, each payroll period Humi Payroll will automatically include the relevant amounts in its calculation for every employee’s earnings and deductions.

Review payroll register

Each payroll’s deduction amounts are usually calculated during a the payroll’s review stage. This is a stage where we recommend payroll admins to export a Payroll Register report and confirm that amounts calculated for the payroll are accurate for each employee.

Some common scenarios that imply a change to benefit amounts include:

  • Adding/removing a dependent to employee’s benefit plan which could trigger a change from single to family coverage (or visa versa)
  • Salary changes affecting salary based benefits (LTD, STD, and sometimes Life and AD&D)
  • Change RRSP % based on salary
  • When an employee applies for optional coverage
  • If someone were to waive their Health and Dental coverage due to spousal coverage
  • If there is an amendment to the group benefit plan that impacts the premium rate (adding or removing a particular benefit)
  • Yearly at benefit renewal time

It is important to verify that these changes are reflected in the benefits that are set up in Humi Payroll, and that any amounts that are modified are accurately reflected in the period’s payroll for applicable employees.Important considerations before setting up a benefit

Set up cash benefits

In Humi Payroll, cash benefits can be set up as Income Types in addition to an employee’s regular pay such as hourly or salary pay. Learn more about Income Types here.