PEI small buisness owners sorting through their payroll paperwork on a laptop

PEI Payroll Guide

Whether you’re starting a business in PEI or are expanding your existing business, it’s a good idea to have detailed information on your province's payroll regulations. This guide will ensure that you stay on top of important protocols that keep your employees safe and your business thriving. 

Once you’ve familiarized yourself with all the necessary regulations, you can begin your payroll automation journey to ensure the entire process is as easy as possible. 

PEI Minimum Wage

As of April 1 2022 the minimum wage in PEI is $13.70 per hour. 

Effective April 1 2022, the maximum amounts that may be deducted from the wages of an employee where the employer provides board and lodging are as follows:

  • Board and Lodging - $61.60 per week
  • Board Only - $49.50 per week
  • Lodging Only - 27.50 per week
  • Single Meals - $4.25 per meal

Employers cannot charge an employee for a meal they did not receive. In no case should the employee's pay, after board and lodging deductions, be less than the minimum rate shown in this order. 

The following list illustrates the maximum amounts that can be deducted from employee’s wages in the instance where an employer provides board and lodgings: 

  • Board only: $45 per week
  • Lodging only: $25 per week
  • Board and lodging: $56 per week
  • Meals: $3.75 per meal

Hours of Work

  • Maximum work hours: 48 hours is the standard amount that employers can require employees to work in a given week.
  • Overtime: Any amount of hours that exceed 48 hours per week.
  • Overtime rates: 1 and 1/2 times the employee's regular pay rate.
  • Double time: If employee works on another day of rest in same week as the Statutory holiday
  • Break period: 1/2 hour for each consecutive 5 hours worked
  • Rest period: 24 consecutive hours per week

Employees who are excluded from these hours of work regulations include (but are not limited to):

  • Truck drivers
  • Ambulance drivers
  • Fish processors

Workers Compensation Prince Edward Island

As an employer in PEI, you contribute to an accident fund to pay for the cost of various compensations. Your contributions to the Worker's Compensations Board of PEI (WCB) are based on your annual assessable payroll and your assessment rate.

To determine your assessment rates, the WCB will use the employer classification system to divide employers into different groups based on their broader industry class. These industries are grouped together based on similar business operations and then are assigned to a Rate Group based on claims history. 

The WCB Board of Directors set assessment rates each year, per $100 of assessable payroll based on the maximum assessable earnings for that year. The maximum assessable earnings for 2021 is $55,300 and for 2022, will be $58,300. These rates are based on the following: 

  • The payroll figures for all employers by Rate Group
  • Expenses associated with administering the compensation system 
  • Relative costs of injuries

PEI Payroll Tax Deductions and Remittances

An employer can only make payroll deductions from an employee’s pay if they:

  • Are authorized or required by law (i.e. CPP, EI, income tax)
  • Have a written agreement between employer and employee
  • Have a court order 
  • Have given a previous advancement of pay to the employee
  • Make payments toward a group benefit plan the employee participates in 
  • Make contributions towards a savings plan the employee participates in 

Any deductions to employee’s wages that go towards an employer’s business is forbidden, including damage or breakage to company property, or a lack of payment from customers.

Employers are not allowed to deduct pay from an employee for uniforms or footwear that are unique to the employer's business.  An employer is allowed to request a deposit of up to 25% of the cost covering corporate uniforms. However, employers must return the deposit when employment ends and the employee returns the uniform. Employers should keep a record of this by having employees sign receipts for the uniforms.

Pay Statements

For Prince Edward Island, employers are required to pay their employees within a pay period of at least 16 days. Such pay can exclude up to 5 working days prior to the day that pay goes out. Under provincial legislation. PEI pay statements will include the following information (however, employers may include additional items):

  • Pay period dates 
  • Earnings and payments outside of the regular wage (ie commissions, bonuses)
  • Itemized list of deductions
  • Gross earnings and net pay
  • Total hours worked
  • Rate of pay
  • Vacation pay including the gross amount 
  • Pay in lieu of notice including gross amount
  • Employer name and address
  • Employees name 
  • Overtime hours worked with rate of pay
  • General, public, and statutory holidays worked

Leave of Absence in PEI

Vacation pay 

All employers must keep accurate and up to date payroll records that include information on vacation days taken and vacation pay paid to employees. Should a Labour Standards Officer audit a company and be unable to find records of vacation pay, the Director of Labour Standards may assert that the employer still owes vacation pay to employees. 

Employees are entitled to receive accumulated vacation pay they have earned should their employment end. Employers must include this amount with the employee’s final pay.

Over the first 12 months of employment an employee will earn vacation and vacation pay, and every 12 months after that.

Employees are entitled to the following vacation pay based on length of employment:

  • After first 12 months and up to 8 years: 2 weeks or 4%
  • 8 years or more: 3 weeks or 6%

Termination Regulations

The province of Prince Edward Island has no specific regulations on group terminations. 

QuickBooks Online will allow your business to run efficiently by streamlining your payroll process and overall financial needs. You will be able to easily pay employees right from  QuickBooks Online as well as gain access to other features like filing taxes, creating year end forms, complete time tracking, calculate taxable benefits, staying in compliance with employment insurance and so much more. Try it today.

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