Chapter 10

Question 1

Non- Regular Payments

Answer 1

In addition to regular wages, earnings, allowances and benefits, there are other forms of employment income that an employer may pay to an employee.

Unlike regular salary payments, which are paid on a regular basis, non-regular payments have no established frequency.

Question 2

3 Types of Non-regular payments

Answer 2

retroactive payments
bonus payments
vacation payments

Question 3

Why are Bonus payments more costly to a the receiver?

Answer 3

Bonus payments do not have a CPP exemption as they are not on a regular pay cheque

Question 4

retroactive payments

Answer 4

are required when an employee’s salary has changed prior to the current pay period

Question 5

bonus payments

Answer 5

are made based on an employee, or group of employees, achieving certain objectives or target

Question 6

Types of retroactive pay

Answer 6

Retroactive Adjustment
Retroactive Increase
Retroactive Payment

Question 7

Retroactive Adjustment

Answer 7

Are required when the increase in wages is processed after the increase has been awarded, for example, where the paperwork authorizing the increase is late in coming to the payroll department

Question 8

Retroactive Increase

Answer 8

required when an increase in wages is awarded and the effective date is backdated, for example, where the signing of a new contract occurs after the expiry date of the old contract

Question 9

Retroactive Payment

Answer 9

Required when an employee whose employment was terminated is later reinstated, with back pay, as a result of a court decision or union intervention

Question 10

Bonus and Incentive Pay

Answer 10

a non-regular payment made to an employee, over and above regular wages

can be work-related, tied to production or work performance, or it can be discretionary, such as a Christmas bonus

Question 11

Vacation Pay

Answer 11

an amount paid when an employee goes on vacation leave
legislated by employment standards in each jurisdiction
based on a percentage or fraction of vacationable earnings

Question 12

CPP on non-regular payments

Answer 12

If bonus is included with the regular pay then the total amount is calculated using the CPP exemption.

If the bonus is paid on a separate cheque/pay then the CPP is calculated without the CPP exemption.
*This is because CPP exemption is only deducted from regular earnings.

Question 13

Commission Payments

Answer 13

Commissions are the dollar amounts an employee earns for selling the company’s goods or services
Some companies choose to pay employees by commission instead of, or in addition to, a regular salary
Commission payments are usually based on the sales generated by the employee

Question 14

Calculation of Commissions

Answer 14

The method an organization uses to calculate commission payments is usually specified in either an employment contract or a collective agreement

Question 15

3 general methods of calculating Commissions

Answer 15

Straight Percentage of Sales
Fixed Amount per Sale
Multiple Rates per Target Level

Question 16

Straight percentage of sales

Answer 16

commission earnings calculated using the straight percentage method pay a fixed percentage rate on gross or net sales

Commission = sales x percentage rate

Question 17

Fixed amount per sale

Answer 17

commission earnings calculated using the fixed amount per sale method are based on a set dollar amount for each sale.

Commission = Fixed dollar amount x number of products sold

Question 18

Multiple rates per target

Answer 18

commission payments calculated using the multiple rates per target level are calculated using a set percentage per target amount

Commission =
Zero to first target x first percentage rate
+ amount in excess of first target up to beginning of secondtargetx second
percentage rate
+ amount in excess of second target x third percentage rate

Question 19

Payroll Remittances - Payees

Answer 19

Employees
The Canada Revenue Agency
Workers Compensation Boards
Provincial Ministries of Finance
Courts
Insurance providers
Pension fund administrators
Other administrators of funds withheld from employee’s wages

Question 20

Employee Expectations:

Answer 20

Employees assume:

If they are not paid on time – the payroll administrator is to blame.

Question 21

Steps taken to process payroll

Answer 21

Communicate to employees the payroll dates.

Advise other departments or functions of input “cut-off” dates for:
Changes to static information.
Newly hired employee information.
Termination or lay-off advice.
Pay cycle information such as regular hours, overtime, special payments.

Plan ahead to ensure that adequate time is allowed for unusual events such as holidays and vacations.