Interactive Payroll Deduction Guide (IPDG)

Interactive Payroll Deduction Guide (IPDG) Revised: April 2005 Interactive Payroll Deduction Guide (IPDG) Solidarity Fund QFL Monthly Remittances Tax Breaks Forms and Change Notice Interactive Payroll Deduction Guide (IPDG) Solidarity Fund QFL Solidarity Fund QFL About Us Our Mission Monthly Remittances Tax Breaks Forms and Change Notice 1 Interactive Payroll Deduction Guide (IPDG) About Us Solidarity Fund QFL About Us Our Mission With close to 550,000 shareholders and net assets of $5.5 billion,1 the Solidarity Fund QFL is the largest development capital corporation dedicated to SMEs in Québec. As the only organization of its kind, the Fund calls upon public savings and the solidarity of the people of Québec to fulfill the mission it undertook upon its inception in 1983. 1 Shareholders, net assets on November 30, 2004. 1.1 Interactive Payroll Deduction Guide (IPDG) Our Mission Solidarity Fund QFL About Us Our Mission • Invest in Québec companies and provide them with services in order to further their development and create, maintain or preserve jobs in Québec. • Encourage economic training for workers so that they have a greater impact on the Québec economy. • Stimulate the Québec economy through strategic investments that benefit both workers and companies alike. • Make workers aware of the need to save for retirement and encourage them to participate in the development of the economy by purchasing Fund shares. In pursuing its mission, the Fund strives to offer stable and reasonable long-term returns to its shareholders through a balanced distribution of assets between its job-creating investments and its marketable securities portfolio. 1.2 Interactive Payroll Deduction Guide (IPDG) Monthly Remittance Solidarity Fund QFL Monthly Remittances Making Remittances to the Fund Your Reference Number Notice to Employers Remittance Notice Detailed Remittance List and Remittance List Tax Breaks Forms and Change Notice Your Payroll Schedule Log into our Secure Website Remittance Terms Payment Procedure Providers of Payroll Processing Services 2 Interactive Payroll Deduction Guide (IPDG) Making Remittances to the Fund Monthly Remittances Making Remittances to the Fund Your Reference Number Notice to Employers Remittance Notice Detailed Remittance List and Remittance List Making remittances to the Fund is simple and easy. A variety of efficient tools are available to transmit and send payments. Just choose the option that is most convenient for you. Moreover, our processing method ensures accuracy and confidentiality. Your Payroll Schedule Log into our Secure Website Remittance Terms Payment Procedure Providers of Payroll Processing Services 2.1 Interactive Payroll Deduction Guide (IPDG) Your Reference Number Monthly Remittances Making Remittances to the Fund Your Reference Number Notice to Employers Remittance Notice Detailed Remittance List and Remittance List A five-digit code will be assigned to your by the Fund. Please refer to this number any time you communicate with the Fund in writing or by telephone. Your Payroll Schedule Log into our Secure Website Remittance Terms Payment Procedure Providers of Payroll Processing Services 2.2 Interactive Payroll Deduction Guide (IPDG) Notice to Employers Monthly Remittances Making Remittances to the Fund Your Reference Number Notice to Employers Remittance Notice Detailed Remittance List and Remittance List You can choose to receive each month, by mail, by fax or via our secure Website either a Remittance Notice, a Remittance List or a Detailed Remittance List (see samples). Please be sure to read it carefully since this is how we communicate with our 6,000 participating employers. Your Payroll Schedule Log into our Secure Website Remittance Terms Payment Procedure Providers of Payroll Processing Services 2.3 Remittance Notice Employers that make monthly remittances receive a Remittance Notice. Please make sure to include the tearoff portion with your monthly payment to help us serve you better. 2.3.1 Detailed Remittance List Most employers that make monthly remittances using the subscription list provided by the Fund receive the Detailed Remittance List. These employers must validate and correct the information, if necessary. The Detailed Remittance List is then returned to the Fund with the tear-off portion of the Remittance Notice. 2.3.2 Remittance List Certain employers receive the Remittance List. These employers must fill out and return this form to the Fund with the tear-off portion of the Remittance Notice. 2.3.3 Interactive Payroll Deduction Guide (IPDG) Your Payroll Schedule Monthly Remittances Making Remittances to the Fund Your Reference Number Notice to Employers Remittance Notice Detailed Remittance List and Remittance List Why do we need your payroll schedule? Your payroll schedule allows the Fund to send you Change Notices at the correct time and Remittance Notices for the right pay periods, thereby ensuring that your monthly remittances are processed accurately and according to your requirements. Your Payroll Schedule Log into our Secure Website 26 Pay Periods 52 Pay Periods Remittance Terms Payment Procedure Providers of Payroll Processing Services 2.4 Interactive Payroll Deduction Guide (IPDG) 26 Pay Periods Pay Period Date Pay Production Date Employee Payment Date Example of a payroll schedule On the left is an example of a payroll schedule for January 2005 for 26 pay periods. Start 04-12-26 End 05-01-08 05-01-10 05-01-13 05-01-09 05-01-22 05-01-24 05-01-27 52 Pay Periods 2.4.1 Interactive Payroll Deduction Guide (IPDG) 52 Pay Periods Pay Period Date Start 04-12-26 05-01-02 05-01-09 05-01-16 05-01-23 End 05-01-01 05-01-08 05-01-15 05-01-22 05-01-29 Pay Production Date 05-01-03 05-01-10 05-01-17 05-01-24 05-01-31 Employee Payment Date 05-01-06 05-01-13 05-01-20 05-01-27 05-02-03 Example of a payroll schedule On the left is an example of a payroll schedule for January 2005 for 52 pay periods. 2.4.2 Interactive Payroll Deduction Guide (IPDG) Before logging into our secure Website, please read the procedure in PDF format. Monthly Remittances Making Remittances to the Fund Your Reference Number Notice to Employers Remittance Notice Detailed Remittance List and Remittance List Log into Our Secure Website We can transmit your Notices, Remittance Lists and Change Request forms via our secure Website. We can also transmit your Notices and Remittance Lists via an Excel file. If you would like to receive your documents using one of these methods, please sign up by e-mail at remisedas@fondsftq.com or by fax at: (514) 383-2503. Your Payroll Schedule Log into our Secure Website Remittance Terms Payment Procedure Providers of Payroll Processing Services 2.5 Interactive Payroll Deduction Guide (IPDG) Did you know that Fund shareholders can now view their file online? Hence the importance of respecting your remittance schedule. Remittance Terms Monthly Remittances Making Remittances to the Fund Your Reference Number Notice to Employers Remittance Notice Detailed Remittance List and Remittance List All payroll deductions made in the course of a month must be remitted to the Fund no later than the fifteenth (15th) day of the following month, in accordance with Section 27 of the Act to establish the Fonds de solidarité des travailleurs du Québec (F.T.Q.). Just as remittances to the federal and provincial governments are obligatory, so are remittances to the Fund. In the event of any disruption of employment (illness, CSST, etc.), no payroll deductions will be made retroactively upon the employee’s return, unless an agreement has been negotiated between the parties to this effect. Employees can cash out their bonuses, banked vacation or overtime hours and contribute these amounts to the Fund’s RRSP. A specific remittance list must be submitted in such cases. Your Payroll Schedule Log into our Secure Website Remittance Terms Payment Procedure Providers of Payroll Processing Services 2.6 Interactive Payroll Deduction Guide (IPDG) Payment Procedure Monthly Remittances Making Remittances to the Fund Your Reference Number Notice to Employers Remittance Notice Detailed Remittance List and Remittance List You can pay owed amounts by: • Cheque payable to the Fonds de solidarité FTQ; • Direct deposit into the Fund’s bank account at the Banque Laurentienne; • Electronic fund transfer (EFT), by Internet via your financial institution’s Website (AccèsD Affaire, Clic paiement, etc.). Your Payroll Schedule Log into our Secure Website Remittance Terms Payment Procedure Providers of Payroll Processing Services 2.7 Interactive Payroll Deduction Guide (IPDG) Providers of Payroll Processing Services Monthly Remittances Making Remittances to the Fund Your Reference Number Notice to Employers Remittance Notice Detailed Remittance List and Remittance List In order to facilitate your remittances to the Fund, partnerships have been formed with the following payroll subcontractors: CGI (Banque Nationale), Service de paie Desjardins (SPD), Société GRICS and Coba. If you do business with any of these companies, please contact us for the appropriate procedure. Your Payroll Schedule Log into our Secure Website Remittance Terms Payment Procedure Providers of Payroll Processing Services 2.8 Interactive Payroll Deduction Guide (IPDG) Tax Break Solidarity Fund QFL Monthly Remittances Tax Breaks Forms and Change Notice Tax Benefits of Fund Shares Government Authorization Payroll-Processing Service Providers Reference Documents Example of Payroll Calculations with Payroll Deduction Example of Payroll Calculations with Payroll Deduction and Employer Contribution Employment Insurance and Employer Contribution to the Fund 3 Interactive Payroll Deduction Guide (IPDG) Tax Benefits of Fund Shares Tax Breaks Tax Benefits of Fund Shares Government Authorization Upon buying Fund shares, your employees receive two immediate tax credits reducing the income tax payable by 30% (15% Québec + 15% federal) on the amount invested. These savings can reach up to $1,500 per year on a $5,000 investment, that is, 30% of $5,000. By registering their shares in a Fund RRSP, your employees can double their tax savings since the 30% credit is added to the income tax deduction granted by a conventional RRSP. Payroll-Processing Service Providers Reference Documents Example of Payroll Calculations with Payroll Deduction Example of Payroll Calculations with Payroll Deduction and Employer Contribution Employment Insurance and Employer Ccontribution to the Fund 3.1 Interactive Payroll Deduction Guide (IPDG) Government Authorization Tax Breaks Tax Benefits of Fund Shares Government Authorization The Fund obtained authorization from the Québec and federal governments for all participating employers to reduce the amount of taxes withheld from each pay for shareholders contributing through payroll deduction. Employers therefore have no procedure to follow in this respect. Payroll-Processing Service Providers Reference Documents Example of Payroll Calculations with Payroll Deduction Example of Payroll Calculations with Payroll Deduction and Employer Contribution Employment Insurance and Employer Ccontribution to the Fund 3.2 Interactive Payroll Deduction Guide (IPDG) Payroll-Processing Service Providers Tax Breaks Tax Benefits of Fund Shares Government Authorization Most companies that offer payroll-processing services have the means to process payroll deductions as well as tax breaks with respect to Fund shares. We strongly advise that you carry out a payroll test to ensure that your system complies with applicable tax measures. Payroll-Processing Service Providers Reference Documents Example of Payroll Calculations with Payroll Deduction Example of Payroll Calculations with Payroll Deduction and Employer Contribution Employment Insurance and Employer Ccontribution to the Fund Do you process your own payroll? Make sure you can apply all the deductions. 3.3 Interactive Payroll Deduction Guide (IPDG) Reference Documents Tax Breaks Tax Benefits of Fund Shares Government Authorization Guide for Employers – Source Deductions and Contributions TP-1015.G, Revenu Québec. PDF Document http://www.revenu.gouv.qc.ca/eng/services/sgp_winras_2005/index.asp Payroll Deduction Forms for Computer Programs T-4127, Canada Customs and Revenue Agency. PDF Document http://www.cra-arc.gc.ca/tax/business/tod/menu-e.html Payroll-Processing Service Providers Reference Documents Example of Payroll Calculations with Payroll Deduction Example of Payroll Calculations with Payroll Deduction and Employer Contribution Employment Insurance and Employer Ccontribution to the Fund Guide de l’employeur – avantages imposables T-4130, Canada Customs and Revenue Agency. PDF Document 3.4 1 Example of Payroll Calculations with Payroll Deduction • Relevé 10: A revenue statement issued by the Fund twice a year that attests to the total contributions made to the employee’s account. This slip is sent by the Fund to the employee’s personal address. To be deducted before determining the tax payable 1 Must be calculated based on gross income The 15% tax credit for each government tax bracket reduces the tax payable Example based on taxable income of $26,000 3.5 1 Example of Payroll Calculations with Payroll Deduction and Employer Contribution • T4 slip and relevé 1: Any financial contribution made by the employer is taxable and must be added to the employee’s gross income, unlike that of the employee, which is not included. • Relevé 10: An income To be deducted before determining the tax payable 1 Must be calculated based on gross income The 15% of tax credit for each government tax bracket reduces the tax payable statement issued by the Fund twice a year that attests to the total contributions made to the employee’s account. This income statement is sent by the Fund to the employee’s personal address. The taxable benefit arising from the employer’s contribution to the Fund must be excluded from the insurable earnings when calculating employment insurance contributions (see next screen). 3.6 Interactive Payroll Deduction Guide (IPDG) Employment Insurance and Employer Contribution to the Fund Tax Breaks Tax Benefits of Fund Shares Government Authorization The taxable benefit arising from contributions made by an employer to the Fund on behalf of an employee must be excluded from the insurable earnings when calculating employment insurance contributions. In fact, given the Fund’s restrictive purchase-by-agreement criteria, these contribution cannot be considered as made in cash and consequently must be excluded from the insurable earnings pursuant to paragraph 2(3)a) of the Insurable Earnings and Collection of Premiums Regulation. Our interpretation has been confirmed by the Canada Revenue Agency (CRA). Payroll-Processing Service Providers Reference Documents Example of Payroll Calculations with Payroll Deduction Example of Payroll Calculations with Payroll Deduction and Employer Contribution Employment Insurance and Employer Ccontribution to the Fund 3.7 Interactive Payroll Deduction Guide (IPDG) Forms and Change Notice Solidarity Fund QFL Monthly Remittances Tax Breaks Forms and Change Notice Which form should I use? Enrolment Form Change Request Form Change Notice Access to Our Secure Website Contact Us 4 Interactive Payroll Deduction Guide (IPDG) Which form should I use? Forms and Change Notice Which form should I use? Enrolment Form Change Request Form Two forms are available to you for the administration of payroll deductions: •the Enrolment Form •the Change Request Form Change Notice Access to our Secure Website Contact Us 4.1 Enrolment Form This form authorizes the Fund to open an RRSP, a non-RRSP or a Spousal RRSP account. It must be signed by the person applying to become a shareholder. This form also authorizes the Fund to ask the employer to begin payroll deductions for the newly enrolled employee. 4.1.1 Change Request Form This form enables employees who are already Fund shareholders to start, change or stop their payroll deductions. This form also authorizes the Fund to ask the employer to begin, change or stop payroll deductions for an employee. 4.1.2 SPECIMEN Change Notice • These reports centralize all the information contained in the Enrolment and Change Notice Form. • Depending on your payroll production date, you can choose to receive by mail, by fax or via our secure Website, a Change Notice that will allow you to update your employees’ payment schedule. 4.2 Interactive Payroll Deduction Guide (IPDG) Before logging into our secure Website, please read the procedure in PDF format. Access to Our Secure Website Forms and Change Notice Which form should I use? Enrolment Form Change Request Form • We can transmit your Change Notice via our secure Website for consultation at your convenience. • To help you manage your time, we can also e-mail the Change Notice. • If you are interested in receiving this document via one of these means, please sign up by e-mail at remisedas@fondsftq.com or by fax at: (514) 383-2503. Change Notice Access to our Secure Website Contact Us 4.3 Interactive Payroll Deduction Guide (IPDG) Contact Us Forms and Change Notice Which form should I use? Enrolment Form Change Request Form For more information concerning our secure Website, transmission methods for Remittance Notices and Lists, as well as the send-outs of your monthly remittances to the Fund, do not hesitate to contact us at: remisedas@fondsftq.com or by fax at: (514) 383-2503. One of our advisors will contact you promptly. You may contact the individual responsible for your file at any time by dialling the telephone number indicated on your Remittance Notice. Change Notice Access to our Secure Website Contact Us 4.4