GIF
2020 Year-End Guide

Step 1: Review Records

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.

Review important dates

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.

Federal Bank Holiday Date
Christmas Day Friday December 25, 2020
Boxing Day Monday December 28, 2020
New Year's Day Friday January 1, 2021

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.

Remitter type Remitting frequency Remitting period Remittance due dates
Quarterly Quarterly January 1 to March 31
April 1 to June 30
July 1 to September 30
October 1 to December 31
April 15
July 15
October 15
January 15
Regular Monthly Calendar months 15th day of the next month
Threshold 1 accelerated Up to twice a month 1st to 15th of the month
16th to end of the month
25th day of same month
10th day of the next month
Threshold 2 accelerated Up to four times a month 1st to 7th of the month
8th to 14th of the month
15th to 21st of the month
22nd to the last day of the month
3rd working day after the 7th
3rd working day after the 14th
3rd working day after the 21st
3rd working day after the last day of the month

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.

Review employee records

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:

Review payroll 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

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:

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

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:

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.

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.

Adjust records.

If applicable, reach out to support@humi.ca 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.