Payroll management: legal obligations

In Quebec, employers have a number of legal obligations related to managing their employees' payroll. These obligations relate to payment frequency, source deductions and periodic remittances to various government agencies. Here's an overview of the employer's main payroll responsibilities:

1. Payroll frequency

Under Quebec's Act respecting labour standards, employers must respect certain rules concerning the frequency with which employees are paid:

  • Payment frequency : Pay must be paid at regular intervals of no more than 16 days.
  • First pay: When a new employee is hired, the employer has 1 month to pay the employee's first pay.

2. Withholding tax obligations

Employers are responsible for making deductions from employees' salaries to cover certain taxes and contributions:

  • Federal and provincial income tax: the employer must deduct a percentage of the employee's gross salary for income tax purposes (provincial and federal).
  • Quebec Pension Plan (QPP) contributions: The employer must deduct contributions for the employee's retirement, and must also pay their share.
  • Employment Insurance (EI): Employers are required to deduct a portion of the salary for EI premiums, and must also pay their share.
  • Fonds des services de santé (FSS): Employer contribution to finance the healthcare system. The remittance rate varies according to the total payroll worldwide and the company's sector of activity.
  • Commission des normes, de l'équité, de la santé et de la sécurité du travail (CNESST): Employers are required to pay contributions for the protection of health and safety in the workplace.

3. Periodic remittance

Employers must make periodic remittances to various government agencies for payroll deductions:

  • Remittance frequency: In general, remittances to the Canada Revenue Agency (CRA) and Revenu Québec are made monthly or quarterly, depending on the amount of wages paid.
    • For a company with a low payroll, remittances must be made on the 15th of the month following salary payment, or on the 15th of the month following the end of the quarter, if quarterly frequency has been agreed.
    • o For a company with a high payroll, remittances may have to be made on a more frequent basis (bimonthly or weekly).

4. Annual obligations

At the end of each year, the employer must complete several formalities:

  • T4 and Relevé 1: Employers must produce tax slips for each employee (T4 for federal and Relevé 1 for provincial). These documents must be given to the employee and sent to the tax agencies before the end of February.
  • Annual summaries: A global summary of payroll payments, deductions and employer contributions must be submitted to the Canada Revenue Agency and Revenu Québec before the end of February.
  • CNESST: The employer must declare the total payroll for the year by March 15.

5. Compliance with labour standards

The employer must also ensure that remuneration paid respects the minimum wage in force, and that payments for overtime, bonuses or other compensation are calculated and paid correctly.

In addition, the employer must guarantee that employees can take time off work for reasons provided for by law, without jeopardizing their employment relationship. Such absences may be paid or unpaid, depending on the situation. Here are a few examples:

  • Sickness: an employee with at least 3 months' seniority is entitled to a minimum of 2 days' sick leave per calendar year. These days cannot be carried forward or redeemed for cash if not used.

  • Vacation: employees are entitled to annual vacation, the duration of which depends on their years of continuous service:

    • Less than 1 year of continuous service: 1 day of vacation per full month of service, up to a maximum of 2 weeks.
    • 1 year to less than 3 years' continuous service: 2 weeks' vacation, continuous or not, at the employee's choice.
    • 3 years or more of continuous service: 3 weeks' vacation, continuous or divided into 2 periods, at the employee's choice.

Vacation pay is calculated as a percentage of gross salary:

    • o 4% for employees with less than 3 years' service;
    • o 6% for those with 3 years or more.

Conclusion

Payroll management in Quebec requires compliance with numerous legal obligations. These include payment frequency, source deductions, periodic remittances to governments, and the application of labour standards. By respecting these responsibilities, employers avoid penalties, ensure legal compliance and contribute to maintaining a fair and harmonious work environment.

Our payroll services department is at your service should you require assistance. We are always available to answer any payroll-related questions you may have.