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Pensionable and Insurable Earnings Review (PIER)

craThe CRA uses a variety of methods to check your remittances after you submit your T4s, but one of the more notable ways is with using the Pensionable and Insurable Earnings Review, or the PIER (PaySavvy includes an in-house PIER for year-end auditing prior to submitting T4s, similar to the system the CRA uses). The CRA uses the PIER to make sure the pensionable and insurable earnings you report match what you withheld and remit.

They check by matching the pensionable and insurable earnings you report with the premiums for the year; they then compare these required amounts with the reported CPP and EI premiums on the T4 slips. If they find a difference, they print the figures on a PIER listing and send it your way for you to remit the balance due (heads up — you’re on the hook for your and your employee’s portion due).

The CRA uses different calculation methods for figuring out Pensionable and Insurable Earnings. Using these methods — or your payroll provider’s in-house PIER, if they have one — you can find out whether or not you should expect a PIER in the mail (in our experience, no PIER is a good PIER). The methods the CRA uses for the PIER are as follows:

CPP deficiency calculations:

If the employee has 52 pensionable weeks in the year, CPP is calculated by:

  1. Subtracting the CPP basic exemption for the year from the CPP pensionable earnings show in box 26 of the T4 slip, and
  2. Multiplying the result of Step 1 by the current year’s CPP contribution rate.

The result is the employee’s yearly CPP contributions, which you report in box 16 of the T4 slip. This is complicated when you either start or stop deducting CPP during the year; the CRA has a resource for this.

Note that the maximum pensionable earnings for 2012 was $50,100, which means the maximum annual contribution was $2,306.70. If any of your employees contributed more than this amount, they over-remitted.

EI deficiency calculations:

Calculating an employee’s EI premiums is simpler: simply multiply the EI insurable earnings shown in box 24 of the employee’s T4 slip by the current year’s EI premium rate. Nothing to it.

Note that the maximum insurable earnings for 2012 was $45,900, which means the maximum annual employee contribution was $839.97 ($674.73 in Quebec) and that the maximum employer premium was $1,175.96 (and $944.62 in Quebec). If any of your employees contributed more than this amount, they over-remitted.


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