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Canada Pension Plan and Employment Insurance Explained
Generally, employment has to take place in Canada to be pensionable or insurable under the Canada Pension Plan or the Employment Insurance Act. However, in certain situations employment outside Canada may be pensionable or insurable. This is the case if a person is working outside Canada for a Canadian company or the Canadian government.

There are two types of plans - insured and uninsured. The insured plans are not affected by the changed in the Act. Insured plans are plans made under a formal contract with an insurance carrier. In this instance, the insurance company is not acting as an employer, but as an independent third party.

Here is some information that is new for 2012, that may be of interest.  We hope that by blogging about some of the changes in Canadian payroll to keep our readers informed.  This is by no means identifying all of the changes for 2012, but some of the highlights.  For more information on legislative changes for 2012 please leave a comment or contact our office.

What is your preferred method of keeping informed?  OnPayroll.ca has expanded to offer several options on social networks.  In addition some of the government agencies offer subscriptions to electronic mailing lists.

Service Canada, the Agency responsible for the administration of Canada Pension Plan, has announced some significant changes to the plan effective January 1, 2012. The changes involve opting into the plan after receiving benefits among other things.

PIER Reports - (Pensionable Insurable Earnings Review)

It is always best practice to regularly check throughout the year to see if your Canada Pension Plan/Quebec Pension Plan and Employment Insurance/Quebec Parental Insurance plan premiums are in balance. If you are a client of OnPayroll.ca, then we automatically do this for you as a part of our regular service.

Some employers provide a wage-loss replacement plans for short-term disability to their employees. If the plan meets certain standards established by Service Canada, the employer's EI premiums could be paid at a reduced rate (less than 1.4 times the employee's premiums).

To benefit from a reduced employer premium rate, you have to apply for the EI Premium Reduction Program by submitting:

We have repeated this article in our newsletter and thought we should blog it too,  as just when you are sure your are safe paying an incorporated company as an independent contractor, along comes a curve ball. We have been receiving a lot of inquiries about paying Indpendent contractors lately - so here is the article.

Steven Van Alstine, Vice-President, Compliance Programs and Services of the Canadian Payroll Association, noted 10 key areas where many employers were not in compliance with the various tax rules and reg