Chapter 5

Question 1

Whats the order of priority for deductions?

Answer 1

1. CPP/QPP contributions
2. EI premiums
3. QPIP premiums
4. Income taxes (federal and provincial)
5. payroll taxes ( Northwest Territories and Nunavut)
6. legal deductions
7. union deductions
8. company- compulsory deductions
9. voluntary deductions

Question 2

True or False. In most jurisdictions, and employer can terminate the employment of an employee for whom they have received a garnishment

Answer 2

False. In most jurisdictions, an employee is protected from dismissal because a garnishment against their wages has been served.

Question 3

True or False. In most jurisdictions, the legislation will define the amounts that are exempt from garnishment.

Answer 3

True

Question 4

provide the reason the following garnishments are issued from Third Party Demand:

Answer 4

A third party demand is issued by the CRA to recover overpaid EI benefits

Question 5

provide the reason the following garnishments are issued from Garnishment Order:

Answer 5

is issued by either the ministry or department of justice the attorney or solicitor general or the ministry of community or social services to collect a debt owed to a third party creditor

Question 6

provide the reason the following garnishments are issued from Maintenance Order

Answer 6

a maintenance order is issued by either the ministry or department of justice the attorney or solicitor general or the ministry of community or social services to collect child support and maintenance payments

Question 7

provide the reason the following garnishments are issued from Requirement to Pay

Answer 7

a requirement to pay is issued by either the CRA or RQ to collect unpaid income taxes and unpaid statutory deductions

Question 9

which legal deduction would be taken first from an employee with multiple orders against them?

Answer 9

Generally, requirement to pay takes top priority over any other orders

Question 10

besides deducting and remitting the amounts stated in the Requirement to Pay order, what are an employer’s other responsibilities?

Answer 10

• an employer who fails to comply with the order is liable for the amount owing
• an employer must advise the CRA/RQ if no wages are owed to an employee for a given period
• an employer must notify the CRA/RQ if the employee’s employment is terminated

Question 11

true or false. third party garnishment orders are provincially regulated

Answer 11

true

Question 12

what are the more common types of contributions made to a defines contribution plan?

Answer 12

• flat dollar contribution
• percentage of pensionable earnings contribution

Question 13

true or false. a group registered retirement savings plan (RRSP) must be registered with the federal government

Answer 13

true

Question 14

what are the RRSP contribution limits based on?

Answer 14

usused room from prior years carried forward plus:
les- a pension adjustment (PA) value reported for participating in an RPP
- Past Service Pension Adjustment (PSPA) values reported
plus - pension adjustment reversal (PAR) values reported

Question 15

What is the difference between a group insurance policy and an individual policy?

Answer 15

group insurance policy differs from an individual policy in that it is designed around classes of membership rather than specific individuals

Question 16

true or false.employer-paid premiums for group term life insurance, medical, dental, vision, and accidental death and dismemberment coverage are non-cash taxable benefits in all jurisdictions

Answer 16

false. employer-paid premiums for group term life insurance, including spousal and dependent coverage, and accidental death and dismemberment are non-cash taxable benefits to the employee, both federally and in Quebec. In Quebec only, employer-paid premiums for medical, dental, and vision coverage are also non-cash taxable benefits

Question 17

do employers need an employee’s written consent to take legal deductions?

Answer 17

no

Question 18

do employers need an employee’s written consent to take QPIP premiums?

Answer 18

no

Question 19

do employers need an employee’s written consent to take Company-compulsory deductions?

Answer 19

yes

Question 20

do employers need an employee’s written consent to take Income taxes (federal and provincial)

Answer 20

no

Question 21

do employers need an employee’s written consent to take union dues?

Answer 21

yes

Question 22

do employers need an employee’s written consent to take CPP/QPP contributions?

Answer 22

no

Question 23

do employers need an employee’s written consent to take Payroll taxes (Northwest Territories and Nunavut)?

Answer 23

no

Question 24

do employers need an employee’s written consent to take employment insurance premiums?

Answer 24

no

Question 25

do employers need an employee’s written consent to take voluntary deductions?

Answer 25

yes

Question 26

does legal deductions reduce the employees net taxable income?

Answer 26

no

Question 27

does RRSP reduce the employees net taxable income?

Answer 27

yes

Question 28

does voluntary deductions reduce the employees net taxable income?

Answer 28

no

Question 29

does income taxes reduce the employees net taxable income?

Answer 29

no

Question 30

does union dues (non-Quebec) reduce the employees net taxable income?

Answer 30

yes

Question 31

does union dues ( Quebec) reduce the employees net taxable income?

Answer 31

no

Question 32

does CPP/QPP contributions reduce the employees net taxable income?

Answer 32

no

Question 33

does Payroll taxes reduce the employees net taxable income?

Answer 33

no

Question 34

does EI premiums reduce the employees net taxable income?

Answer 34

no

Question 35

Which type of employment income would be EXEMPT from a garnishment?
1. bonus payment
2. overtime pay
3. vacation pay
4. none of the above

Answer 35

4 none of the above

Question 36

which government body would issue a garnishment order?

Answer 36

ministry or department of justice, attorney or solicitor general, ministry of community and social services (through small claims courts)

Question 37

When dealing with legal deductions, which of the following is NOT a correct statement?
1. an employees consent is required to withhold amounts under a garnishment order
2. An employer must advise the Canada Revenue Agency and/or Revenu Québec if the employee’s employment is terminated
3. An employer must advise the Canada Revenue Agency if there are no wages owing to an employee for a given period
4. An employer who fails to comply with a garnishment order is liable for the amount owing

Answer 37

1. An employee’s consent is required to withhold amounts under a garnishment order

Question 38

Monies collected by payroll deduction under a third party garnishment order are remitted to:

Answer 38

the court

Question 39

Georgia is a member of her employer’s defined contribution pension plan. The plan defines the contribution as 2% of the employee’s pensionable earnings with the employer matching the employee’s contribution. Georgia’s pensionable earnings are $2,500.00 per month. Calculate the total employee and employer’s contribution to be remitted to Georgia’s defined contribution pension plan each month.

Answer 39

100
=2500 x 2 % = 50 x 2

Question 40

an employer had the right to discuss the details of an employee’s garnishment with:

Answer 40

the employee

Question 41

Alenka is a member of her employer’s defined contribution pension plan. The plan defines the contribution as 4% of the employee’s pensionable earnings with the employer matching the employee’s contribution. Alenka’s pensionable earnings are $4,400.00 per month. Calculate the total payment to be remitted to Alenka’s defined contribution pension plan each month.

Answer 41

352
= 4400 x 4% = 176 x 2

Question 42

the maximum rrsp contribution for 2024 is:

Answer 42

31,560

Question 43

which province are employer-paid premiums for medical, dental and vision coverage reported as a non-cash taxable benefit?

Answer 43

Quebec

Question 44

what payroll deduction does not require employee authorization for the deduction?

Answer 44

third party demand

Question 45

A defined contribution pension plan is also known as a:

Answer 45

money purchase plan

Question 46

which of the following deductions is subtracted from an employees gross taxable income to arrive at net taxable income
1. voluntary deductions
2. union special assessment contribution
3. employees registered pension plan contribution
4. legal deductions

Answer 46

3. employees registered pension plan contribution

Question 47

What other responsibilities related to a third party demand should employers be aware of?

Answer 47

• an employer must : must advise the CRA if there are no wages owing to an employee for a given period
  must notify the CRA if the employee’s employment is terminated
• an employer who fails to comply with the order is liable for the amount owing

Question 48

which is NOT a voluntary deduction?
1. social club deductions
2. union dues
3. united way donation
4. none of the above

Answer 48

2. union dues