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Payroll Compliance Audits

Is your payroll fully compliant? Are you exposed to significant fines and penalties? Are your employees being taxed correctly?

Let us introduce you to the LeadingEdge Payroll Group, an organization that can help you get immediate answers to these and other important payroll / HR compliance-related questions.

LeadingEdge is the only multi-dimensional payroll company in Canada that totally focuses on Canadian payroll and HR administrative functions. Established in early 1996, LeadingEdge provides its growing client base throughout North America, in both the public and private sectors, with practical advice, cost-effective strategies and valued-added solutions. Its clients recognize LeadingEdge for it's unparalleled knowledge and expertise. Clients include Ford of Canada, Canada Customs and Revenue Agency, Shell Canada, Hamilton-Wentworth District School Board, District of Maple Ridge, Human Resources Development Canada, Hudson's Bay Company, Ontario Power Generation, Central Alberta Midstream, Alberta Treasury Branches, Sobey's, Canadian Helicopter Corporation and Canfor.

LeadingEdge offers a comprehensive suite of services, which includes payroll research, specialized consulting, best practices, benchmarking, customized training and the re-engineering of payroll and HR-related administrative practices and processes. In addition, LeadingEdge publishes a monthly payroll newsletter, entitled Payroll ALERT™, which reports on payroll and HR related compliance issues and developments.

Why have a compliance review done?

Over the year's, a company's payroll obligation has grown from a relatively simple task to one that now requires extensive knowledge of federal and provincial tax structures (tax on income), employment law, garnishments, family support orders, workers' compensation and health taxes / levies. During the last few years, government auditors have become more aware that many employers are not in full compliance with the law. There is an ever-increasing demand for employers' to be fully compliant. We have witnessed cases where employers have been fined and penalized significant sums of money for failure to comply. Non-compliance also opens the door for former employees to pursue possible legal challenges.

More importantly, are you aware that a director may be held personally liable, pursuant to section 227.1 of the Income Tax Act ("ITA"), section 323 of the Excise Tax Act ("ETA"), and similar provisions of the Canada Pension Plan, and the Employment Insurance Act for failure to deduct, withhold, remit, or pay certain amounts of money held in trust for the Crown.

What is our methodology?

Our proven methodology would include a team approach to diagnosing any possible compliance issues. We would hold an initial meeting to help us determine primary areas of concern. We would then ask you to complete a detailed questionnaire that our consulting team would use to assist with the on-site diagnostic review, which includes:

• Fully challenging the status quo;
• Transfer knowledge of payroll and HR administrative "best practices" with a particular emphasis on compliance and control weaknesses;
• Analyze and document issues, opportunities and benefits;
• Prepare a report card together with a reasonable and "do-able" plan that can be implemented quickly, measured and assessed for the objectives you are seeking;
• Assist in the development of a key communications strategy (where applicable); and,
• Provide liaison with government agencies (if required).

What areas do we typically cover?

• Tax calculations
  • Are you accurately taxing your employees at source?
  • Do you pay bonuses, commissions and are these being handled properly?
  • Do you have employees that frequently transfer between business numbers or provinces?
  • Do you have a reduced EI premiums account?
• Remittance schedule
  • Are you adhering to the correct CCRA / MRQ schedule and remitting all deductions, i.e. the application of manual cheques?
• Workers' Compensation (WC) assessable earnings
  • Are you accurately assessing WC insurable earnings?
  • Are you adhering to the inter-provincial agreements?
• T4's / RL-1's
  • Are you reporting correctly?
  • Do you receive a P.I.E.R. report yearly?
  • Do you balance your T4's / RL-1's to your payroll register and other internal reports?
• T4A's, severance packages previously reported
  • Has there been a cessation of an employee / employer relationship?
  • Are you correctly identifying and classifying retiring allowances?
  • Are you properly applying statutory deductions and RRSP transfer limits?
• Employee/Employer relationships
  • Do you have contractors or consultants that should be classified as employees? What is your exposure if a supposed independent contractor or consultant gets injured on the job?
• Provincial Health Care Taxes and Levies
  • BC Medical Services Plan and Alberta Health Care, Ontario's EHT, Manitoba, Newfoundland and Labrador and Quebec health care levies. Are you handling these correctly?
• Pension Plans
  • Are you accurately reporting your PA's and PAR's?
  • Are you handling group RRSP programs properly?
• ROE's
  • Are you correctly completing these forms, properly assessing insurable earnings / hours and issuing the ROE's within the identified timelines?
• Taxable Benefits
  • Do you pay for your employee's parking?
  • Do you have car allowances or company cars?
  • Do you provide group life insurance?
  • Are you applying the proper treatment to employee gifts and awards?
  • Low Interest Loans?
• Garnishments / Family Support Orders
  • Are you applying the correct withholding rates and exemptions?
  • Are you handling arrears correctly?
• Employment standards
  • How do you handle the payment of vacation pay and / or vacation time-off?
  • Are you calculating statutory holidays and overtime correctly?
  • Are you providing the appropriate coverage under parental and maternity leave?
  • Treatment and provisions for casual and part-time labour - are you treating this correctly?

Project Staffing, Proposed Timelines and Professional Fees

LeadingEdge has offices in Vancouver, Calgary, and Toronto. This helps facilitate reviews that are national in scope. Senior experienced professionals, who will be available to meet with you to determine your compliance issues, head our practices. They are involved to varying degrees on compliance-related assignments, implementation projects, control audits and training on the Canadian Payroll Association delivered courses.

In the spirit of developing a long-term relationship with any organization, LeadingEdge offers competitive rates. A full compliance review, which requires approximately 5 to 7 days on-site, could be conducted for a professional fee of between $7,000. to $10,000. In the event you want to focus on one primary area and do not believe a full compliance audit is necessary, we also offer assignments on an hourly rate basis (i.e. time and materials). We would be pleased to review your specific requirements in this regard.

Interested in a compliance audit for your organization or just want to learn more? Click here, complete and submit the information request. .