Canadian Payroll Glossary

Canadian Payroll Terms:

• Gross Pay: Total earnings an employee receives before deductions and taxes.
• Net Pay: The amount of money an employee receives after deductions and taxes are subtracted from gross pay (what goes into the employee's bank account).
• Deductions: Amounts withheld from an employee's paycheck, such as income tax, CPP contributions, EI premiums, and benefit plan contributions.
• Remittances: Payments an employer makes to the government on behalf of their employees, including CPP contributions, EI premiums, and income tax deductions.
• Pay Period: The timeframe for which an employee is paid, typically weekly, bi-weekly, or semi-monthly.
• Pay Stub: A document that details an employee's earnings, deductions, and net pay for a specific pay period.
• T4 Slip: An annual tax information slip provided to employees by their employer, summarizing their income and deductions for the year.

Canadian Government Programs:

• Canada Pension Plan (CPP): A government program that provides retirement income to eligible Canadians. Employees and employers share contributions.
• Employment Insurance (EI): A government program that provides temporary financial assistance to unemployed workers who meet eligibility requirements. Employees pay premiums through payroll deductions.

Taxation:

• Canada Revenue Agency (CRA): The federal agency responsible for collecting taxes in Canada, including income tax from employee payrolls.
• Taxable Earnings: The portion of an employee's earnings subject to income tax deductions.
• Source Deductions: Taxes withheld from an employee's paycheck at the source (their employer) and remitted to the CRA.

Other Important Canadian Payroll Terms:

• Overtime Pay: Pay an employee receives for working hours beyond their regular scheduled hours, typically at a higher rate.
• Statutory Holiday Pay: Pay an employee receives for working on a nationally recognized statutory holiday in Canada.
• Employee Benefits: Non-cash compensation offered to employees, such as health insurance, dental insurance, or paid time off.
• Garnishment: A legal order requiring an employer to withhold a portion of an employee's wages to pay off a debt.
• Recordkeeping: Maintaining accurate and complete records of employee payroll information for tax and government reporting purposes