Two small business owners in Alberta going through payroll documents on a jobsite

Alberta Payroll Guide

Between managing your employee data and making payroll deductions, the payroll process has many moving parts; What do I need to know to stay compliant? What information is necessary for me to provide? What is best for my employees? There are a few ways to answer these questions. 

Although the federal government has their own set of regulations (for example, the Canada Pension Plan), it’s important to know what your province expects from you. This guide is here to offer you specific information about Alberta’s payroll regulations and answer questions that will help you through the process.

Alberta Minimum Wage 

The general Alberta minimum wage for most employees is $15.00 per hour. 

The minimum wage for a salesperson is $598 per week. Someone qualifies as a salesperson if they are someone who:

  • Solicits orders, mainly outside the employer’s place of business for goods or services to be delivered to the buyer, and;
  • Is paid fully or in part by commission (not including route salesperson)
  • Sells automobiles, recreational vehicles, trucks or busses 
  • Sells manufactured homes
  • Sells farm machinery
  • Sells heavy duty construction equipment or road construction equipment

Employees who are eligible for the weekly minimum wage rate of$598 per week include:

  • direct sales salesperson
  • commission salesperson selling goods delivered later on
  • Fam machinery salesperson, manufactured home salesperson, residential home salesperson employed by builder, construction equipment salesperson, or motor vehicle salesperson
  • architect
  • Accountant
  • agrologist
  • land agent
  • Chiropractor
  • engineer or other geoscientist
  • Lawyer
  • psychologist
  • Dentist
  • denturist
  • optometrist
  • Podiatrist
  • veterinarian
  • information systems professional

Domestic employees (living in their employer’s home) have a minimum wage of $2,848/month. Should your employer provide you with lodging and food, they can deduct these costs from your wages- up to $3.35 per meal, and up to $4.41 per day for lodgings. It is important to note that your employer cannot make a meal deduction if you do not eat. 

The minimum wage for students under the age of 18 increased to $13/hour in June of 2019. However, employers can choose to pay students more than this minimum. While school is in session the $13 wage rate applies to the first 28-hours worked in a week. But employers must pay students the general minimum wage of $15/hour past the 28 hours in one week. Overtime rules still apply.

Hours of Work

The maximum hours of work in Alberta is 8 hours per day or 48 hours per week. If an employee works more than 8 hours in the day or more than 44 hours in the week, they need to be compensated for overtime. The overtime pay is 1 and 1/2 times the employee's regular rate of pay. 

Employers are required to give their staff a half hour break per a consecutive 5 hours worked.

The minimum hours of work in Alberta is 3 hours per shift for their regular wage.

Workers Compensation 

Should one of your employees become injured on the job, you are required by law to report this injury within 72 hours of it happening to the Workers Compensation Board Alberta. To read more about how to report injuries as an employer, look to the following document: Report an injury: For employers.

Wages and health benefits 

If an employee's injury does occur during work hours, it is up to you as the employer to pay the injured worker a full day of wages on the day the injury occurred. Should the employee be unable to work beyond the day of the injury, compensation payments must start on the following regular working day. Cheques must be issued once every two weeks.

If you continue to pay the worker their full wages covering the disability period, the eligible compensation they can receive will be paid to you. Be sure to inform the adjudicator or case manager of this situation to avoid duplicate wage-loss payments. 

Suppose you made payments towards the worker's employment benefits plan before the injury. In that case, you are also required to continue these payments towards health benefits if the injured worker is absent from work for up to one year following the accident date. Learn more about your injured worker’s health benefits after an injury.

Payroll Remittances Alberta

Common payroll responsibilities include: 

  • Open and maintain a payroll program account. If you have met all the conditions in chapter 1.
  • Get your employee’s social insurance number (SIN)
  • Obtain a completed federal Form TD1, Personal Tax Credits Return, and, if applicable, a provincial or territorial Form TD1. New employees or recipients of other amounts such as pension income must fill out this form.
  • Deduct all CPP contributions, EI premiums, and income tax from remuneration or other amounts, including taxable allowances and benefits, you pay within a pay period. Hold these amounts in trust for the Receiver General, keeping them separate from the operating funds of your business. These amounts cannot come from an estate in liquidation, assignment, receivership, or bankruptcy.
  • Remit all deductions alongside your share of CPP contributions and EI premiums. 
  • Report employees’ income and deductions on the appropriate T4s or T4A slips. The information return must be filed on or before February 28 of the following calendar year. 
  • When an employee stops working or whose earnings are interrupted (ie temporary layoff), prepare a Record of Employment (ROE) 
  • Keep records in your payroll account for at least six years should officers wish to see them.

Below is a guide for Alberta specific tax brackets and rates: 

Deductions employers are not allowed to take from wages

Employers cannot deduct the following items, even if such situations fall into a collective or written agreement: 

  • Payment for faulty work 
  • Property loss or cash shortages in instances where someone other than yourself had access to these assets
  • Cash shortages from uncollected part of full price from customers for products or services rendered
  • Costs covering the purchase, repair, and maintenance of uniforms or special clothing required for work
  • Worker’s compensation board premiums

Canadian-controlled private corporations not in an associated group may claim a small business deduction on active business income (that is, non-investment income), up to the small business threshold of $500,000. Canadian-controlled private corporations in an associated group share the maximum small business threshold. For more information see Information Circular CT-17, Alberta Small Business Deduction.

Alberta Pay Statements 

It is the responsibility of the employer to provide all employees with a statement of earnings at the end of every pay period, which will show the following information: 

  • The statement period
  • Regular hours worked alongside wage rate 
  • Any overtime worked if applicable, including overtime rates 
  • Earnings paid separated by line item (ie wages, overtime wages, holiday pay, and vacation pay)
  • Deductions from earnings including the reason for each deduction made
  • Hours taken off in lieu of overtime 

Electronic statements are allowed only if employees have confidential access to the documents to view and print them out. Keep in mind, privacy legislations will require employers to maintain employee payroll confidentiality.

Alberta employers are legally required to pay their employees at least once a month, or use a pay frequency on a daily, weekly, bi-weekly, or semi-monthly schedule. 

Employers are also responsible for other pay-related tasks, such as: 

  • Provide every employee with a statement of earnings covering each pay period
  • Hold employment records for at least 3 years 
  • Pay employees their waged within 10 consecutive days after the pay period ends (unless the employee is terminated) 

Leave of Absence 

When it comes to regular sick leave, no provincial laws require employers to provide employees with paid sick days. However, employers can offer sick days at their own discretion through the employment contract. 

Termination Notice

Alberta has a policy known as the Employment Standards for Termination, for when/if an employee’s employment is terminated. If an employee has been working for longer than 90 but less than 2 years, the employer is required to give the employee 1 week notice of termination. If the employee has been working for the employer for longer than 2 years, then 2 weeks notice is required. Termination notice is not required when the employee has been working for 90 days or less. 

When an employee is terminated from their job, the employer can choose to pay employee earnings in one of two ways: 

  • Within 10 consecutive days following the end of the pay period in which they were terminated, or
  • 31 consecutive days following the last day of employment 

QuickBooks Online streamlines your payroll process by giving you access to features that help you set up multiple pay schedules and frequencies, setting up vacation and sick leave policies, time tracking, filing taxes and more. Try it today.

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