Helping you to avoid PIER assessments prior to year-end T4 processing
Now that families have settled in to their back to school routines, and as winter has arrived albeit a bit earlier than normal, now is a great time to review your payroll's pensionable and insurable earnings vs. employee & employer contributions for the current calendar year. Catching any discrepancies before year end will help avoid a Pensionable and Insurable Earnings Review (PIER) assessment from the Canada Revenue Agency in the New Year.
Getting an assessment from the CRA is never a good thing, but PIER assessments are extra troubling because they apply to both the employee and employer portions of any CPP, EI or QPP deficiencies. Employers are somewhat accustomed to having to contribute any possible short comings for their own source deduction (CPP, QPP and EI) contributions, although employers normally don’t expect to have to pay the employee portion as well since this portion is usually deducted at source. With PIER assessments from the CRA, this is a very real possibility.
Adding insult to injury, because of the employer’s failure to withhold payroll taxes from the employee at the time in which they are earned and the restrictions on recovering short falls, employers may be unable to recover the employee portion of the PIER assessment. Sometimes it can be quite confusing as to what scenarios you can and cannot – recover under contributed amounts from your employees.
A PIER report that you can run prior to the end of the calendar year will assist you to identify any discrepancies you may unknowingly have and give you the time to revise your payroll records before you produce the employee T4 and RL-1 slips.
Here at Prophet, we have developed a PIER report that is based on the CRA’s PIER assessment review process. The CRA checks the T4 slips you file to make sure that the CPP/QPP and EI amounts you reported are correct. Employee CPP/QPP and EI amounts are then recalculated based on the pensionable and insurable earnings you reported. Any discrepancies between the reported and calculated amounts for an employee are noted on a PIER listing. The report that we have created here at Prophet, will do the exact same thing for you.
Our report details the names of all employees along with their current year source deduction contributions for both employer and employee portions. Our report will identify any deficiencies that the employer would be responsible for, unless corrections are done to remedy the short falls prior to calendar year end. If you are using an outside payroll company, they should be doing this for you prior to year-end. If you are using GP payroll, you have a couple of different options;
- You can run a SmartList that will show the Employee and Employer contributions for the year for CPP, QPP, and EI amounts and then export this report into Excel. You will have to manually create the formulas necessary that will accurately calculate the required contributions to determine if you have deducted and remitted the appropriate amount of Source Deductions, OR
- You can reach out to a Prophet consultant and arrange to have our PIER report deployed in your environment. The deployment of the report is fairly straightforward and can be done in minimal amount of time.
Here’s why should you have Prophet deploy the PIER Report in your environment;
- You will own the report.
- You will save your payroll staff a significant amount of time balancing source deductions as part of the daunting year end T4 preparation process.
- It will ensure that your staff are setting the appropriate tax flags on the employee cards so that there are no surprises at year end.
- It will save your company money by avoiding any PIER Assessment received by the CRA.
Do yourself a favour, avoid the stress of receiving a PIER Assessment from the CRA and reach out to have the Prophet PIER Report deployed for you.
If you have any questions regarding the PIER report contact us today.