It's important to consider factors like employment standards, minimum wage, tax implications, payroll scheduling, payment methods, and wage calculations for effective seasonal payroll management.
Do you have a seasonal workforce?
As a seasonal employer in Canada, understanding payroll for your temporary staff is essential. Additionally, distinguishing between hourly and salary wages and ensuring compliance with deductions like CPP, EI, and income tax are important. Consider leveraging payroll services and automating tasks to streamline the process and ensure your staff members are paid accurately and on time. By optimizing your payroll processes, you can enhance efficiency and provide valuable support to your seasonal employees. Luckily, there is help!
Payroll Regulations for Seasonal Workers
Seasonal employees have the right to most of the same protections outlined in the Employment Standards Act (ESA) as permanent employees. This includes entitlement to minimum wage, regulated hours of work, scheduled rest and meal breaks, overtime compensation, vacation and stat holiday pay. It is important to note that these aspects of employment vary by province and territory. Be sure to confirm the legislative requirements for the province in which you are hiring seasonal employees.
Tax Implications for Seasonal Employees
Seasonal workers, like full-time permanent employees, are required to pay federal and provincial taxes and deductions, according to their province of taxation. This means as an employer, you must calculate source deductions and remit to the CRA the same as you would with any other employee.
Ensure that when bringing on seasonal employees, you gather all essential details, including their eligible tax credits. Request that they complete an updated federal and provincial TD1 form, whether they are new hires or returning staff members. You can find links to all TD1 forms here.
Record of Employment (ROE) for Seasonal Employees
In Canada, a Record of Employment (ROE) is an official document that provides information about an individual's employment history, including details about their work and earnings while employed with a particular employer. It is used by the government to determine eligibility for various benefits, such as Employment Insurance (EI). It is essential that employers issue ROE's promptly and correctly for their staff once their seasonal work ends.
According to the CRA (linked here):
If you issue ROEs on paper, you must issue an ROE within 5 calendar days of:
- the first day of an interruption of earnings, or
- the day the employer becomes aware of an interruption of earnings
If you issue ROEs electronically and your pay period is weekly, biweekly (every 2 weeks), or semi-monthly (twice a month, usually the 15th and last day of the month), you have up to 5 calendar days after the end of the pay period in which an employee's interruption of earnings occurs to issue an electronic ROE.
If you have a monthly pay period or 13 pay periods per year (every 4 weeks), you must issue electronic ROEs by whichever date is earlier:
- 5 calendar days after the end of the pay period in which an employee experiences an interruption of earnings, or
- 15 calendar days after the first day of an interruption of earnings
You can learn more about ROE's using the CRA Record Of Employment Guide found here.
Tips for Streamlining Payroll Processes for Seasonal Employees
Accurate record keeping is imperative for managing seasonal employee payroll. It facilitates precise year-end preparation and is necessary in the event of a payroll audit. Outsourcing payroll or utilizing a payroll software is ideal for most seasonal employers as you can often pause your account or subscription during your off-season, and reactivate when busy season resumes.
We strongly recommend updating employee information annually, even if you are re-hiring past employees. Verify banking and personal information including email and address to keep your records up to date and avoid mistakes with paying employees, issuing ROE's or preparing year end tax documents.
You can also check out our Ultimate 2024 Canadian Payroll Guide for additional payroll resources.
With our expertise in handling seasonal employee payroll, PayTrak offers a seamless process for deactivation/reactivation for our clients. If you have any questions or concerns about managing seasonal payroll, reach out to us.
