Chapter 4

Question 1

What is retroactive increase?

Answer 1

a type of earning 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 2

what is a bonus?

Answer 2

a non-regular payment made to an employee over and above regular wages in recognition for a job well done

Question 3

what is retroactive adjustment?

Answer 3

a type of earning required when an increase in wages is processed after the increase has been awarded for example where the paperwork authorizing the increase is late in coming

Question 4

true or false. When calculating the CPP/QPP contribution on a non-regular payment paid separately from the employee’s regular salary or wages, the pay period exemption must be applied to the payment.

Answer 4

false. if the non-regular payment is paid separately from the regular salary or wages payment the manual calculation method must be used without applying the pay period exemption as the exemption would have been applied when calculating the CPP/QPP contributions on the regular pay period pensionable earnings.

Question 5

true or false. directors’ fees paid to directors in the private sector are subject to EI premiums

Answer 5

false directors fees paid to directors in the private sector are not subject to EI premiums

Question 6

death benefits are subject to
1. CPP/QPP contributions
2. EI premiums
3. Quebec Parental Insurance Plan premiums
4. all of the above
5. none of the above

Answer 6

5. none of the above

Question 7

true or false. lump-sum tax rates are applied based on the amount of each individual payment during the taxation year

Answer 7

false the tax to apply should be based on the total of all lump-sum payments that will be made in the taxation year