Chapter 6: Employer Payroll Expenses
6.1 Overview
In addition to accurately calculating employees’ gross pay, deductions, and net pay, payroll professionals are also responsible for calculating and remitting employer payroll expenses.
Employer payroll expenses are the statutory contributions and premiums that employers must pay in addition to employee wages. These obligations vary by jurisdiction but typically include:
-
Employer contributions to the Canada Pension Plan (CPP) — equal to the employee’s CPP contribution.
-
Employer contributions to Employment Insurance (EI) — calculated at 1.4 times the employee’s EI premium.
-
Employer contributions to the Québec Pension Plan (QPP) — for employees working in Quebec, the QPP replaces CPP and is equal to the employee’s contribution.
-
Employer contributions to the Québec Parental Insurance Plan (QPIP) — calculated as a percentage of the employee’s insurable earnings, not 1.4 times the employee’s deduction.
-
-
The 2% payroll tax in the Northwest Territories and Nunavut, administered through the WEBRAS system.
-
Health and Post-Secondary Education Tax (in Newfoundland and Labrador).
-
Employer Health Tax (EHT) (in Ontario and British Columbia).
-
Health and Post-Secondary Education Levy (in Manitoba).
Provincial or territorial payroll taxes, where applicable, such as:
-
-
Workers’ Compensation premiums, which fund workplace injury and illness coverage, and vary by province, industry, and risk classification.
Specific Learning Outcomes
Upon successful completion of this chapter, you will be able to:
- Calculate employer CPP, QPP, EI, and QPIP contributions
- .Identify jurisdictional payroll taxes and understand when they apply.
- Calculate Workers’ Compensation premiums based on provincial or territorial rates.
- Ensure accurate remittance and reporting of all employer statutory expenses.
Image Credit
