Update for Employers on Payroll Matters

Form PD27 – 10% Temporary Wage Subsidy Self-identification Form for Employers

The Temporary Wage Subsidy for Employers (“TWS”) program was introduced on March 25, 2020. It was a three-month subsidy provided to eligible employers to reduce the amount of federal, provincial, or territorial income tax that they otherwise must remit to the Canada Revenue Agency (“CRA”). The subsidy was equal to 10% of the remuneration paid from March 18 to June 19, 2020, up to a maximum of $1,375 for each eligible employee and $25,000 for each employer. If you are eligible and have not claimed the TWS yet, you may still do so. No reporting or application was necessary at the time of introduction – employers could simply reduce their payroll remittance to CRA. For more information please click here for our April 10, 2020 newsletter.

The Canada Revenue Agency recently released the self-identification Form PD27, 10% Temporary Wage Subsidy Self-identification Form for Employers (“Form PD27”). It is required by eligible employers who:

  • have already claimed the TWS;
  • intend to claim the TWS; or
  • have claimed the Canada Emergency Wage Subsidy (“CEWS”) and, as a result, need to confirm the amount of TWS that will be claimed or elect to claim 0% for the TWS and claim all wage subsidies under the CEWS.

A separate Form PD27 is required for each payroll account for which the TWS is claimed (including a reduced claim due to the CEWS).

The CRA will use the information on Form PD27 to reconcile the subsidy on employers’ payroll program accounts. Accordingly, the CRA recommends that employers file the Form PD27 as soon as possible, ideally before December 31, 2020, to avoid receiving a discrepancy notice on your payroll account at the end of the year.

If you use a payroll service provider, they may be able to provide a report of the information required to complete the Form PD27 (or complete the form itself on your behalf). If you would like D&H Group LLP to assist with the completion of Form PD 27, please contact us as soon as possible.

T4 Slips – Additional Reporting Requirements for 2020

On August 26, 2020, the CRA announced additional reporting requirements for the T4 slip, Statement of Remuneration Paid, (“T4 slip”) for 2020 for all employers.

In addition to the reporting employment income in the usual Box 14 (Code 71) on the T4 slip, employers are now also required to separately identify and report employment income and retroactive payments made in the following periods using new boxes codes:

  • 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

The employment income and retroactive payments should be reported in the period based on the date of the payment, and not the period that the wages were earned and accrued.

The additional reporting requirements are part of CRA efforts to help track pandemic-related benefit payments made under the CEWS, the Canada Emergency Response Benefit, and the Canada Emergency Student Benefit. The reporting periods coincide with the periods relating to these benefit programs.

The CEWS program was extended in July to include periods up to the end of the year and on September 23, 2020 the government announced another extension of the CEWS program into summer of 2021. We may, as a result, see the above additional reporting requirements expanded in the coming months for 2020 and perhaps for 2021.

If you use a payroll service provider, they may be able to provide a report of the additional information required or complete the T4 slips for your employees with above information.

T4 Reporting Requirements with Respect to CEWS

The CRA previously stated that employers will be required to report the amount of CEWS benefit received on each T4 slip to their employees. This requirement has since been updated on CRA’s Frequently Asked Questions page for CEWS on August 11, 2020 to indicate that information on the T4 reporting will be released shortly.