PAYROLL

INTRODUCTION

1. The payroll function, for all NPF employees, is controlled by the Chief Financial Officer and Vice President Informatics (CFO&VPI) through the National Payroll Office Administrator (NPOA) at CFPSA. There are, however, some payroll related matters that RAMs/NPFASs should be aware of for general information or may be involved in on an ongoing basis. This Chapter provides information on these.

2. Specific payroll policy and procedures are issued by the NPOA and/or Vice President - Human Resources (VP HR)/ Human Resources Information System (HRIS) Manager.

GENERAL

3. The Base Human Resources (HR) Managers, who are responsible to CFPSA/VP HR through the Regional HR Managers (RHRM), maintain the employee files, process employee time sheets and enter the employee data into the Base Human Resources Payroll System (BHRPS) that then feeds into the Cyborg Human Resources Information System (HRIS) at CFPSA HQ.

4. The payroll data is sent electronically to the NPOA who is responsible for processing the payroll data using the Cyborg HR/Payroll System. The payroll for all 25 bases across Canada is processed centrally at CFPSA HQ. This includes processing all employee earnings, all related source deductions and employee benefits.

5. Once the payroll is processed, the NPOA generates, balances and sends to the RAMs an ABACIS JENGEN that is the media by which RAMs post to all entity payroll expense accounts.

6. The normal method of paying employees is by direct deposit to the employees' bank accounts, which is done by the CFO&VPI. Any manual cheques, whether for normal payroll, pay advances, etc, are generated by the NPFAS. All pay stubs for direct deposits are printed and distributed by Base HR.

7. Payroll expenses must be accrued, as required, to ensure a reasonable matching of the expenses incurred to generate revenues in each accounting period. The number of employees, resource limitations, and the workload that would be involved in accurately defining the accrued payroll for each activity dictates that, in the interest of cost effectiveness, determining the amount to be accrued shall be based on estimates.

INTERNAL CONTROLS - PAYROLL CHEQUE PROCESSING

8. As the cheques issuer, the RAM must ensure that appropriate internal controls are in place for the signing and distribution of cheques.

9. The distribution of cheques, which (must be in sealed envelopes), should be done by the NPF HR Manager/Coordinator/Clerk and a designated employee (but not the same employee with authority to sign the wage requests) in the applicable entity/outlet. Unclaimed cheques are to be returned to the HR Manager for cancellation by the RAM.

10. Personnel appointed as cheque signers must satisfy themselves regarding the validity of cheques presented for signature. The cheque signers must review and initial the supporting documentation at the time of signing the cheque. Particular attention should be given to large amounts and unknown employees.

CONTRACT FOR SERVICES

11. Occasionally, personnel may be hired to perform certain duties (eg. sports referees, church organists, instructors, etc) under a Contract for Services rather than as permanent NPF employees or under a Contract of Services. A Contract for Services implies the relationship of a self-employed independent contractor with NPF. A Contract of Services ( eg. a term employee contract) implies an employer-employee relationship.

12. The NPF Human Resources Policy and Procedures Manual provides additional information as well as a sample Contract for Services.

13. Although Canada Customs and Revenue Agency (CCRA) does not require source deductions under a Contract for Services, a T4A Supplementary must be issued by the RAM when :

1. the payment is made to an independent, self-employed contractor which is not incorporated (eg. a person vice a company or organization); and

2. the total remuneration made to the contractor in the tax year is greater than $500.

NOTE

Treasury Board Guidelines state that for Government Service Contracts all forms of enterprises should receive T4A slips i.e. individuals, corporations, partnerships. There are no limitations WRT amounts paid. For further info see the Treasury Board Web site: www.tbs-sct.gc.ca/fin/fin_e.asp.

14. When a T4A is required, the contractor's Social Insurance Number is to be obtained and the amount of remuneration for the tax year is to be entered in Box 28 (Other Income) of the T4A.

15. RAMs/NPFASs are to make payments through the Disbursements Journal (ABACIS DISGEN). A file of payments to each contractor is to be maintained and reviewed at tax year-end to determine if a T4A is required.

FREE MEMBERSHIPS - TAX IMPLICATIONS

16. Free memberships to clubs and messes that are given to select individuals, who are either military members, public servants or NPF employees, are taxable benefits to be included in the income of the recipient. Such memberships would not be taxable benefits when offered to all of the club's members rather than to a select group or individual.

17. Managers of NPF activities that issue free memberships are required to provide the names, addresses and SINs of the recipients as well as the equivalent monetary value of the membership to the NPFAS/RAM prior to the end of each calendar year. RAMs are to issue T4As or Releve 1 (for Quebec) for the these memberships.

PAYROLL ENTITY NUMBER (PEN)

18. Payroll Entity Numbers (PENs) are used to automatically charge specific GLs with specified payroll costs (eg. recoverable payroll costs). Labour Distributions (LABDIS) may be generated for each PEN to assist in tracking costs by purpose or category. Generally, the PENs assigned to an entity correspond to the entity's EOS. The ranges of PENs are as follows:

Entity EOS PEN RAM/CFO&VP 100 0001 - 0999 Base Funds 101 - 399 1000 - 3999 CANEX 400 - 599 4000 - 5999 Officers' Messes 600 - 699 6000 - 6999 Warrant Officers' & Sergeants' Messes 700 - 799 7000 - 7999 Junior Ranks' Messes 800 - 899 8000 - 8999 Miscellaneous 900 - 999 9000 - 9999

19. When the need for a new base PEN is identified, the entity manager will request one from the Base HR Manager/Coordinator/Clerk. The HR Manager will choose an appropriate PEN, request the RAM to verify the GLs affected, and forward the request by e-mail to the National Payroll Supervisor with an info copy to the RAM. For the RAM/CFO&VPI PENs, which are controlled by the Fin Div/ASM, the ASM shall also forward PEN requests to the National Payroll Supervisor. The National Payroll Supervisor will enter the PEN into the CYBORG payroll system and inform the HR Manager and applicable RAM or ASM, as appropriate. A copy is also passed to the Fin Div/Software Manager who updates the BHRPS.