The following is a summary of general information which will answer some of your questions regarding what is required when opening a new business or hiring new staff.
DISCLAIMER: This information is not intended to replace actual government guidelines or their respective instruction brochures, and should be used as a preliminary guide only. Wherever possible, we have included email addresses and telephone numbers so that you can contact the various agencies to obtain more detailed information. You may also contact your Business Services Officer at Tewatohnhi’saktha (450-638-4280) who will be more than happy to answer any questions you may have regarding the following information or anything else pertaining to your business. It will be our pleasure to serve you.
Information on the following topics is provided:
General Business Information
A business is an activity that you intend to carry on for profit and there is evidence to support that intention. A business includes a profession, a calling, a trade, a manufacture, an undertaking of any kind, or an adventure or concern in the nature of trade. Business income includes income from any activity you do for profit. For example, income from a service business is business income. However, you do not include employment income as business income. You need to know if you are an employee or self-employed.
The date when the business can be said to have commenced must be known. Generally, it is considered that a business starts whenever you start some significant activity that is a regular part of the business or that is necessary to get the business going. For more extensive information, refer to www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/wht-eng.html.
Corporation, association, cooperative, organization or other entity refer to all legal persons and any group or persons pursuing a common goal, with or without the intent of earning a profit. An corporation business number begins with 11.
Sole proprietorship is a person operating a business of which he or she is the sole owner. This does not constitute a separate legal entity, as the business and its owner are one and the same. A sole proprietorship business number begins with 22.
A partnership refers to an entity in which two or more persons agree to carry on the operation of a business by pooling their property, knowledge or activities and to share any resulting profits. A partnership business number begins with 33.
Registering your company name will guarantee that no one else will be able to open a business using the same name. Some banks or other financial lending institutions will require that you register your company name if the name of your business is different from your own name, for instance, Acme Plumbing as opposed to your own name followed by the word ‘Plumbing’, before they’ll open a commercial account for your business. There is an annual fee to renew your business name in the register. Refer to www.registreentreprises.gouv.qc.ca for details on how to register your company name on-line, or in person at 2050, rue De Bleury, RC 10, Station Place des Arts, Montréal, Québec, by mail at Revenu Québec, Direction du Régistraire des enterprises, Registration and amendments to the enterprise register, C.P. 1364, Québec (Québec) G1K 9B3, by courier service at Revenu Québec, Direction du Régistraire des enterprise, 3, Complexe Desjardins, Secteur D165RE, Montréal (Québec), H5B 1A4, or by phone at 514-644-4545.
In all instances, you have to file your T4 and T4 Summary (which is a report on the total amount of source deductions that you collected from your employees for the year plus the portion you paid), on or before the last day of February following the calendar year to which the information return applies. For details on completing the T4 slip(s) and T4 Summary, refer to www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/menu-eng.html.
The business number (BN) is a numbering system that simplifies and streamlines the way businesses deal with the federal government and is used to remit the source deductions of your employees, including federal income tax and EI contributions. It is based on the idea of one business, one number. Each business requires one BN for its legal entity. A legal entity is defined as a sole proprietor, partnership, corporation, trust or other organization. The BN has a total account number of 15 characters, 9 to identify the business and two letters and four digits to identify each account a business may have. A corporation BN will begin with 11, a sole proprietorship BN will begin with 22, and a partnership BN will begin with 33. Refer to www.cra.gc.ca/bro (1-800-959-5525) for detailed information to register your business with the Canada Revenue Agency. Remittances are made on a monthly basis. Instructions to remit source deductions can also be found at this website.
Revenue Canada’s Employment Insurance (EI) rates* change on January 1st of each year. As the employer, you withhold a portion of your employee’s salary plus you contribute 1.4 times that amount and remit the total to Revenue Canada. Here is the formula for EI calculation: EI = (gross salary x *% = z) + (z x 1.4) = total amount remitted to Revenue Canada. For EI premium rates, maximums and other details, refer to www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/ei/hstrc-eng.html.
The EI rates for 2013 and calculating instructions are as follows: Revenue Canada’s EI rate for 2013 is 1.52%. In Québec, the maximum annual insurable earnings are $47,000; the maximum annual employee premium is $720.48 and the maximum annual employer premium is $1,008.67. We’ll calculate the formula based on a gross salary amount of $400 per week.
EI = ($400 x 1.52% or $400 x .0152 = $6.08) + ($6.08 x 1.4 = $8.51)
EI = $6.08 + $8.51 = $14.59
$6.08 is the employee’s weekly EI contribution which you withhold from his gross salary. Therefore, his net salary after you deduct his EI contribution would be $393.00 per week.
$8.51 is the employer’s weekly contribution to Revenue Canada that the employer must contribute from their own pocket for the employee’s EI benefit.
The total of the two above amounts, $14.59, is what the employer submits to Revenue Canada so that your employee will be eligible to collect employment benefits if he is laid-off. If the month has four weeks, then $14.59 x 4 = $58.36 is what you submit; if the month has five weeks, then $14.59 x 5 = $72.95 is what you submit. Monthly payments of this Employee Source Deduction can be made directly with the teller at the Caisse Populaire.
To register your business for Québec programs and to remit the source deductions of your employees including provincial income tax, QPIP contributions, Quebec Pension Plan and Québec Commissions des norms du travail and the Québec Health Services Fund, apply to Revenu Québec at www.revenu.gouv.qc.ca (514-380-8850) for a Numero d’Entreprise du Quebec, or NEQ, which is a 10-digit number assigned to your company. You will also need an ID number (identification number) to remit source deductions in Quebec. Apply for both of these numbers at the same time. Remittances are made on a monthly basis. Instructions to remit can also be found at this website.
Revenu Québec’s Parental Insurance Plan (QPIP) premium rates change on January 1st of each year. As the employer, you withhold a portion of your employee’s salary plus you contribute a percentage of the employee’s salary, add the two amounts together and remit it to Revenue Québec on a monthly basis. Here is the formula for QPIP calculations, with (a) being the employee’s premium percentage rate and (b) being the employer’s premium percentage rate: QPIP = (employee’s gross salary x a) + (employee’s gross salary x b) = total amount remitted to Revenu Québec. For QPIP premium rates, maximums and other details, refer to www.revenuquebec.ca/en/entreprise/retenues/methode_calcul/.
The QPIP rates for 2013 and calculating instructions are as follows: Revenu Québec QPIP employee premium rate for 2013 is 0.559%; employer premium rate is 0.782%. In Québec, the maximum annual insurable earnings are $67,500; the maximum annual employee premium is $377.33 and the maximum annual employer premium is $527.85. We’ll calculate the formula based on a gross salary amount of $400 per week.
QPIP = ($400 x 0.559% or $400 x .00559 = $2.24) + ($400 x .00782 = $3.13)
QPIP = $2.24 + $3.13 = $5.37
$2.24 is the employee’s weekly QPIP contribution which you withhold from his gross salary. Therefore, his net salary after you deduct his EI plus his QPIP contribution would be $400 – $6.08 = $393.00 – $2.24 = $390.76 per week.
$3.13 is the employer’s weekly contribution to Revenu Québec that the employer must contribute from their own pocket for the employee’s QPIP benefit.
The total of the two above amounts, $5.37, is what the employer submits to Revenu Québec so that your employee will be eligible to collect benefits for maternity, paternity, parental and adoption. If the month has four weeks, then $5.37 x 4 = $21.48 is what you submit; if the month has five weeks, then $5.37 x 5 = $26.85 is what you submit. Monthly payments of this Remittance of Source Deductions and Employer Contributions can be made directly with the teller at the Caisse Populaire.
In all instances, you have to file your Relevé-1’s and RL-1 Sommaire (which is a report on the total amount of source deductions that you collected from your employees for the year plus the portion you contributed), before the last day of February following the calendar year to which the information return applies. For details on completing these forms, refer to:
Effective May 1, 2013 the general rate of minimum wage is $10.15 per hour. This rate changes every year. Contact the Commission des normes du travail du Québec at 514-873-7061 or visit their website www.cnt.gouv.qc.ca for wage rates applicable to tip-earning employees and individuals working in the garment or domestic industries, whose rates differ from the general rate.
The Commission des normes du travail du Québec informs the Québec population on matters dealing with labor standards, supervises the application of labor standards, receives complaints from employees, transmits recommendations to the Minister of Labor and endeavors to bring about agreements between employers and employees. They also issue a publication detailing the minimum conditions of employment for all Québec employees. For more details and information, refer to www.cnt.gouv.qc.ca (514-873-7061). Their office is located at the Regional Offices of the Commission des normes du travail, 26th Floor, 500 Rene-Levesque Blvd. West, Montreal, Qc, H2Z 2A5.
When an employee has quit, was laid-off or their employment was terminated, or may have seven consecutive calendar days without both work and insurable earnings from the employer, then by law, an ROE must be completed and given to the employee. The employee requires this report in order to apply for employment insurance benefits. You must contact Service Canada at 450-445-0411 or 1-800-550-9004 to order these reports which takes about 10 working days to receive by mail. The report has 3 copies, one for your employee, one the employer keeps for the file and one is mailed to Revenue Canada’s Bathurst, New Brunswick office. All instructions on completing the report and the mailing address are contained in the report. A penalty may apply to employers who fail to issue an ROE to their employees.
QPIP provides employees with benefits for maternity, paternity, parental and adoption. To apply for benefits, the employee should call 1-888-610-7727 or www.rqap.gouv.qc.ca to apply on-line.
A first-time claimant must work a minimum of 910 hours to be eligible to receive employment benefits. For a second application claim, 560 hours are needed, which is about 16 weeks at 35 hours per week. Applications for EI benefits could either be completed on-line at www.servicecanada.gc.ca or made in person. The address of the office in Chateauguay is: Chateauguay Service Canada Centre, 245 St. Jean Baptiste Blvd, Room 101, Chateauguay, Quebec, J6K 3C3, and their fax number is 450-691-4247. The applicant should apply for benefits no later than 4 weeks from the last day worked, otherwise they will experience delays in the processing of their claim and receiving their benefits. Service Canada’s Employment Insurance telephone information service number is 1-800-206-7218. To apply for EI benefits, the applicant will need their ROE, their Social Insurance Number, picture proof of their identity, the address of their bank and a void cheque sample for automatic deposit.
MSI is workplace insurance for your employees which covers on-reserve, on-the-job bodily injury only. The employer pays the monthly MSI premium. Non-Native employees are eligible for this insurance if they work on the Territory of Kahnawà:ke. Contact the Mohawk Council of Kahnawà:ke at 450-638-0500 to register your employees or for more information.