2016-12-21 00:00:00Finance and AccountingEnglishFind the right blend of salary and dividends to maximize your tax efficiency as the owner of a small business.https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/03/Female-jewelry-maker-earning-weekly-salary-sits-at-work-bench-with-tools.jpghttps://quickbooks.intuit.com/ca/resources/finance-accounting/should-i-pay-myself-a-salary-or-dividends/Should I Pay Myself a Salary or Dividends?

Should I Pay Myself a Salary or Dividends?

2 min read

Service Canada uses a Record of Employment (ROE) form to assess workers’ eligibility for Employment Insurance benefits. As an employer, you should understand the basic form, as well as the use of these documents and your legal obligation to complete them for your employees.

When to Issue Record of Employment Forms

If an employee has an interruption of earnings, you must fill out an ROE on their behalf and send it to Service Canada. An interruption of earnings consists of seven days in a row with no pay and no insurable earnings. This happens if an employee quits or if you terminate their employment. To figure out the time, start counting on the last day the employee receives wages, and remember to count the weekends.

If your employee’s earnings fall to lower than 60% of their average income due to illness or taking care of an ill family member, that can also constitute an interruption of earnings. In this case, start counting on the Sunday of the week in which the earnings fall below the threshold. For example, an employee who normally earns $1,000 per week experiences an interruption of earnings when their income falls under $600.

Special Situations With ROEs

Certain types of employees serve as exceptions to this rule. For example, employees who have schedules that often give them seven days off in a row don’t experience an interruption of earnings during their off weeks. In addition, you also have to issue ROEs if you change the pay period you use. For example, if you pay all your employees twice a month but decide to switch to paying them biweekly, you have to issue ROEs for all your employees. Also, if Service Canada requests an ROE, you must submit one.

Information on Record of Employment Forms

To complete an ROE form, you need basic information about your company, including your business number, address, and employer pay reference number. You also need the employee’s name, address, Social Insurance number, and job title, as well as the dates of the first and last day the employee worked for your company. The form prompts you to note when the employee plans to return to work, but you can tick Unknown if you’re unsure of the timing.

Submitting Record of Employment Forms

Service Canada has a special web system for filling out and submitting ROE forms. Once you create your account, the form automatically populates with your business information, so you only have to add employee details. This automation helps you save time by eliminating manual entry, and using electronic submission means you don’t have to worry about documents getting lost in the post.

Some payroll apps work with QuickBooks Online to handle ROEs and necessary government-related forms. This compatibility helps you track and sync payroll expenses quickly and efficiently while also keeping you in compliance with employment law. QuickBooks Online can help you maximize your tax deductions. Keep more of what you earn today.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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