When a corporation pays income..

[Nir]

Hi All,



Some basic accounting questions:



When a corporation pays its employees income, does the corp. also have to pay the government cpp?

also EI?



Does it have to be paid by mid January 2011 (if not paid already of course) for any income the corp. has paid in 2010?



Are any of the answers different when the employee is also the owner of the corporation?



THANKS.

 

[moparcanuck]

Generally speaking, if a corp (or any business, corp or not) pays a wage to employees, it must also withhold payroll taxes and pay it's portion of government programs (CPP, EI). Remittances are usually due by the 15th of the month following the pay cheque. There are exceptions to every rule, so if you're unsure, you might want to ask your accountant, or at least read through the government payroll guides.



CRA Payroll guide:



http://www.cra-arc.gc.ca/E/pub/tg/t4001/

 

[Thomas Beyer]

EI is optional for major (over 20%?) owners of a corporation .. CPP is mandatory !



if you take out money monthly then yes you should submit payments for taxes, CPP (and possibly EI) monthly .. if you take out money irregularly then you should submit then ..

 

[moparcanuck]

EI is never 'optional', as such. Either it's payable or it's not (of course, don't get me wrong, if it isn't payable, I'm sure they'll gladly take your money, but don't expect to ever collect if you aren't actually eligible). If you are the owner, or in some cases very closely related to the owner of the company, then yes, EI is not applicable. (Owners are still responsible for CPP unless they are otherwise exempted)

 

[LondonHomes]

If you are paying wages to employees then as the employer you need to set up remittance accounts with the government for EI, CPP, Workers Comp and all other payroll deductions.



Once they accounts are set up the government will begin to send you a never ending stream of notices of when these payments are due and the proper forms to use when paying them.

 

[Nir]

Thank you everyone for the information!

Regards, Neil