New Payroll Reporting Requirements for 2020
Additional T4 Reporting for 2020 for all Employers
The Canada Revenue Agency (CRA) has added additional reporting requirements for employees’ T4s effective for 2020 that apply to all employers (regardless of whether the employer or employee received COVID-19 benefits). The additional information will be used by the CRA to validate payments made to employees under the Canada Emergency Response Benefit (CERB) and the Canada Emergency Student Benefit (CESB) as well as payments to employers under the Canada Emergency Wage Subsidy (CEWS).
In addition to reporting the employee’s employment income in box 14 of their T4, employers will also have to report employment income (including retroactive payments) for various periods as follows:
- Code 57: Employment income – March 15 to May 9
- Code 58: Employment Income – May 10 to July 4
- Code 59: Employment Income – July 5 to August 29
- Code 60: Employment income – August 30 to September 26
The reporting is done on a cash basis so that the income is reported in the period that it was paid. For example, employment income earned from May 1 to May 9 that is paid on May 15th would be reported in Code 58 since it was paid in that period. You can read more about this on CRA’s website: https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/support-employers-cra-covid-19.html
PD27 – Potential Other Reporting Requirement
Employers may also have to file form PD27, “10% Temporary Wage Subsidy Self-identification Form for Employers”. The 10% Temporary Wage Subsidy (TWS) was the first COVID-19 wage subsidy that the federal government introduced, and it applied to salary and wages paid between March 18 and June 19, 2020.
Employers that were eligible to claim the TWS could have done so by reducing their payroll remittance and the CRA will use the information on form PD27 to reconcile the employer’s payroll remittances for 2020 that are reported on their T4 Return. Employers that did not claim the TWS and wish to do so can claim the subsidy by filling the PD27 form. Filing form PD27 will ensure that the CRA does not send a discrepancy notice regarding the amount of source deductions reported on the T4 Return.
Employers who are eligible for the TWS are required to complete and submit the PD27 form to the CRA if:
- They claimed CEWS (regardless of whether the CEWS claim was reduced by the TWS);
- They already claimed the TWS; or
- They plan on claiming the TWS.
You can read more about the TWS on CRA’s website: https://www.canada.ca/en/revenue-agency/services/subsidy/temporary-wage-subsidy/tws-reporting.html