Everything Youve Ever Wanted To Know About Pay Periods
How many pay periods are in a year? What pay period are we in? When are there three pay periods in a month?
If youâre a small business owner, youâve probably asked most of these questions aloud or in your head.
Many parts of running a business are puzzling. Payroll doesnât have to be. This guide to demystifying payroll periods will answer all of your pay frequency questions.
Hereâs what youâll learn:
- What a pay period is
- How a pay period is calculated
- How long a pay period is
- How many pay periods are in a year
- The difference between a pay period and a pay date
- Why there are 26 pay periods in a year on a bi-weekly schedule
In What Order Should I Complete The Blocks Of The Roe
You can complete the administrative information in any order you like. However, it is often easier to complete the rest of the form in the following order:
Step 1: Complete the period of employment information in Blocks 10, 11, and 12. This information provides you with the timeframe for which you need to report the employee’s insurable hours and earnings.
Step 2: Enter any separation payments paid or payable to the employee in Blocks 17A, 17B, and 17C .
Step 3: Calculate the insurable hours to enter in Block 15A.
Step 4: If you need to complete Block 15C, do it next. Then, enter the total insurable earnings in Block 15B. Remember to include the insurable separation payments you entered in Block 17 in the total amount you enter for the final pay period in Block 15C, and in the total insurable earnings you enter in Block 15B.
- For paperROEs, you only need to complete Block 15C if the employee received no insurable earnings in one or more pay periods, or if you opt to do so in order to provide us with the necessary information for the variable best weeks calculation .
- For electronicROEs, you must always complete Block 15C.
Completing Block 15c On The Paper Roe
If you use a paper ROE, you only have to complete Block 15C if the employee did not earn any insurable earnings in one or more pay periods. In Block 15C on the paper ROE, there are 27 fields in which to report insurable earnings, which allows for a maximum of 27 weekly pay periods.
On April 7, 2013, a new way of calculating a claimant’s Employment insurance benefit rate came into effect. This new way of calculating the benefit rate takes into account the employee’s best weeks in the last year. Because of this, you are encouraged to complete Block 15C even if there are not any pay periods where the employee did not earn any insurable earnings.
In Block 15C, you must provide the payroll data for the required number of pay periods as indicated in the chart below, or fewer if the period of employment is shorter. Enter the insurable earnings the employee received for each full, partial, or nil pay period. To do so, complete Block 15C, making sure to enter the insurable earnings for the final pay period in the first pay-period field , the second-last pay period in the second pay-period field , and so on.
For any nil pay periods with no insurable earnings, enter “0.00.”
Include both dollars and cents. Do not round off the totals. Do not use the dollar sign.
In P.P. 1, remember to include any insurable amounts you reported in Block 17 Separation payments.
To determine the number of consecutive pay periods to enter in this block, see the chart below.
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Block 10 First Day Worked
In Block 10, you usually enter the employee’s first day of work for which he or she received insurable earnings. However, if you have previously issued an ROE for that employee, the date you enter in Block 10 will be the first day the employee worked after the last interruption of earnings .
Anne started working for you in March 2009 as a landscaper. In November 2009, you completed an ROE for Anne, since your business closes each year over the winter months. On March 15, 2010, Anne returned to work for your company. Now in November 2010, you are ready to complete the latest ROE for Anne. In Block 10, you enter “15/03/2010” as Anne’s first day worked.
What If Your Pay Period Is Not In This Guide
This guide contains the most common pay periods: weekly, biweekly , semi-monthly, and monthly. If you have unusual pay periods, such as daily , or 10, 13, or 22 pay periods a year, go to the Guide T4008, Payroll Deductions Supplementary Tables, or the Payroll Deductions Online Calculator to determine tax deductions.
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Your Decision Has Other Effects
Payroll TaxesThe amount of pay will affect the total Social Security and Medicare you and your employees pay. Some employees may reach the maximum Social Security contribution earlier and may reach the threshold for the additional Medicare tax if you make an additional payment.
Employee BenefitsPaying additional salary may also result in paying additional benefits. For example, you might be over-funding someone’s 401 with the extra pay period, beyond the maximum allowable amount. If that happens, you would have to give back the money to the employee.
Tax Year for W-2sHaving a pay period extend over the end of a year brings up the issue of which year’s taxes the payment is in. The general rule is that the tax should be on the W-2 for the year when the paycheck is issued, and the employee has use of it.
Laws About Pay Periods
Although the federal law doesnt force employers to adopt a certain pay period they require the business owners to pay their employees regularly at frequent intervals irrespective of pay frequencies. However, some states have their own laws to ensure the employees are paid frequently. In New Hampshire, you have to pay your employees weekly, while in Hawaii, you cannot pay your employees monthly. You have to pay them weekly, bi-weekly, or semi-monthly. So, its important to check with DOL in your state to know the payroll laws and regulations.
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Fridays: The 2021 Pay Period Leap Year
We have reached the first non-holiday Friday of 2021, which means today is the first payday for many employers . 2021 is one of those years that come along every 5, 6 or 11 years, depending on your exact pay period and payroll calendar.
The Pay Period Leap Year
The Pay Period Leap Year doesnt really exist. Its just the phrase Ive coined to explain a phenomenon that is critically important for large employers or employers with largely salaried workforces, in particular, because it can have a substantial impact on your bottom line and it only happens roughly once per decade.
What is a Pay Period Leap Year? Put simply, Pay Period Leap Years are years with an extra payroll period. Like the Gregorian calendar created by Pope Gregory XIII in 1582, the bi-weekly payroll calendar doesnt fit evenly into a single, 365-day year. The Gregorian calendar addresses this problem by adding 1 day every four years at the end of February, just as we did in 2020. The bi-weekly payroll calendar adjusts by adding a 27th pay period every 11 years. For employers on a weekly payroll cycle, it happens twice as often. 2021 has 53 Fridays which means that, for many employers, 2021 will be a Pay Period Leap Year .
Determining if 2021 is a Pay Period Leap Year for Your Business
If the year starts on a Friday in a non-leap year, like 2021, you end up with 53 Fridays. . For the majority of employers who pay employees on Fridays, this means that 2021 will be a Pay Period Leap Year !
How Earnings Are Paid
- Employers must pay an employee at least the minimum wage.
- Employees must be paid in Canadian currency.
- Employees may be paid by cash, cheque or similar document, drawn on an insured financial institution, such as a chartered bank or credit union.
- Employees may be paid by direct deposit into an account of their choice, in any recognized financial institution.
- Employers must pay employees within 10 consecutive days from the end of the pay period, unless employment is terminated. An employee isnt considered paid until theyve received the funds.
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How Is A Pay Period Calculated
Companies decide what pay period length they want to run their payroll on.
This can be based on a variety of factors, like when the company gets paid for its products and services, how often employees need money, and whether you have hourly employees or if your team is on an annual salary schedule. Thereâs also state law to factor in â you may prefer to pay monthly while state law requires bi-weekly payments.
For example, a company that employs mostly hourly workers might find it beneficial to have a week-long pay period. Weekly payments are easier for financial planning and make employees happier by giving them access to more readily available cash flows.
However, a company that bills its clients at the end of the month and has mostly salaried employees may prefer to pay its employees less frequently â a bi-weekly basis is typical.
Bc Denies Public Health Care To Newcomers We All Pay
British Columbias three-month waiting period for provincial health benefits is hitting racialized immigrant and migrant women the hardest, forcing them to choose between basic health care or food and other necessities, according to a new study.
Without access to timely routine checkups and testing during the wait period, particularly for pregnant parents and newborn babies, health conditions can worsen and have lifelong consequences, researchers at the Centre for Gender and Sexual Health Equity at the University of British Columbia found.
With clear evidence of the harm done to mostly poor and racialized migrants by B.C.s policy, a coalition of 19 migrant rights, poverty reduction, civil liberties and labour groups are calling on the province to repeal the policy permanently.
We can talk for days about the health impacts of the policy, said Omar Chu, an organizer with Sanctuary Health in the Lower Mainland. And at the same time, its also an emotional impact of people who struggle for permanent residence, theyre not eligible for the universal public health care that so many Canadians consider a core value.
When someone moves to B.C., whether from another province or from another country on any type of visa, they are not eligible for basic provincial health coverage for the remainder of the month they arrived, plus two additional calendar months.
When the measures ended in July 2020, Health Minister Adrian Dix defended the waiting period.
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British Columbia Indexing For 2022
For 2022, the provincial income thresholds and the British Columbia tax reduction have been indexed. They have been changed based on changes in the consumer price index.
The indexing factor for January 1, 2022, is 2.1%. The tax credits corresponding to the claim codes in the tables have been indexed accordingly. Employees will automatically receive the indexing change, whether or not they file Form TD1BC, 2022 British Columbia Personal Tax Credits Return.
Payroll Deductions Online Calculator
For your 2022 payroll deductions, you can use our Payroll Deductions Online Calculator . The online calculator makes it easier to calculate payroll deductions. PDOC is available at canada.ca/pdoc.
PDOC calculates your payroll deductions. It calculates deductions for any pay period, province and territory. The calculation is based on exact salary figures.
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Pay Employees On Designated Pay Date
The pay period calendar makes it easy to see each pay date because theyre circled. You can post the calendar on your desk or wall for easy reference. You can also write additional information or reminders to help you keep track of other important dates. Just follow along each day, and youll always know when payday is approaching. This really comes in handy if you process payroll manually.
Who Does This Extra Pay Period Affect
Two kinds of pay periods for salaried employees are often confused. The pay for these employees is annual pay, paid monthly, semi-monthly, or bi-weekly. Semi-monthly is twice a month, resulting in 24 payments in a year, while bi-weekly is every other week, resulting in 26 payments in a year.
The extra pay period affects salaried employees who are paid bi-weekly . Here’s an example:
Jerry is a salaried employee paid $28,000 a year, on a bi-weekly pay basis. Each pay period during a “normal” year of 26 pay periods, he receives $1076.92. But if there is an extra pay period in a year, he would receive an extra paycheck, more than his actual salary.
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What Records Are Employers Required To Maintain
Employers must keep records for all employees that show:
- Name, address, date of birth, and occupation
- The date the employment started
- The regular wage and overtime wage at the start of employment and whenever the wage rate changes
- The regular and overtime hours of work, recorded separately and daily
- Date wages are paid and the amount paid on each date
- Deductions from wages, and the reason for each deduction
- If applicable, overtime that is banked with the written agreement of the employee and employer and the dates the employee takes the banked time off with pay
- The dates on which general holidays are taken
- The employees hours of work on a general holiday and the wages paid
- Start and end dates of annual vacations, the period of employment in which the vacation is earned, and the date and amount of vacation wages paid
- The amount of any outstanding vacation wages when the employment ends and the date this is paid to the employee
- Copies of documents on maternity leave, parental leave, compassionate care leave or other leaves, including dates and number of days taken as leave
- Dates of termination of the employment
- Copies of work schedules
If an employee is paid a monthly or annual salary, it can be divided into an hourly wage for record keeping purposes. Regular hours of work are not required to be recorded if they do not vary on a daily basis, but any overtime or other changes should be recorded.
Block 6 Pay Period Type
In this block, enter the pay period type for the employee. There are five standard types of pay period: weekly, biweekly, semi-monthly, monthly, or 13 pay periods a year.
If your semi-monthly or monthly pay periods are non-standard , please enter “non-standard semi-monthly” or “non-standard monthly” in this block.
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