Understanding your salary and payroll deductions in Manitoba

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How do Canadians get paid for work?

Probably the same way you were paid in your home country. Most companies pay their employees on a weekly or bi-weekly basis here. In Manitoba, it is an Employment Standard that “employees must be paid at least twice a month, within 10 working days of the end of a pay period.” They can get paid via paycheques, but nowadays, with online banking, most employees get their salaries directly deposited to their bank accounts.

What could be significantly different in Canada are the taxes and deductions that determine your take home pay. If you’re not clear about what these payroll deductions are, read on.

How much do you really earn?

It’s important to recognize that the salary you negotiate will be substantially reduced when you receive it. This is because your employer will deduct income taxes, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums. Some companies may also have group insurance, group pension plan or group retirement plan, union dues, and other add-on benefits to which you may be required to contribute.

Employers are legally mandated to deduct CPP and EI premiums from the majority of payments made to their employees. They must also match these contributions and remit these premiums to the Canada Revenue Agency (CRA). The CPP contributions ensure that you’ll have pension benefits when you retire (typically at age 65), while the EI insures employment earnings and provides financial assistance when individuals lose their jobs or are unable to work.

For CPP, the contribution rate for employers and employees is set by the government each year, while the EI premium rate is set at 1.58 per cent and maximum insurable earnings are $60,300 (2022).

Here are Payroll Deductions Tables – CPP, EI, and Income tax deductions – Manitoba for a detailed view of how these deductions are structured for 2023.

Keeping records

In Manitoba, employers are required to provide written statements to their employees when they are paid. This may include an electronic statement. Pay statements or pay slips must show:

  • The regular wage and the number of regular hours worked in the pay period.
  • The overtime wage and any overtime hours worked in the pay period.
  • All deductions from wages, with a date and reason for each deduction.
  • The total amount of wages paid to the employee.

Aside from your pay slip, your employer will also provide you with a T4 Statement of Remuneration Paid. This a document that summarizes all of the money paid by an employer to an employee during a calendar year. Most employers send the T4 electronically or in printed form by February. You will need your T4 to file your taxes.

Understanding your salary and deductions ensures you have a clear picture of your earnings. This helps you manage your finances effectively. If you have questions about your salary or pay stub, you should be able to ask your employer. Stay informed, keep track of your records, and make the most out of your hard-earned money in Canada.
 
Sources: Understanding payroll deductions as a newcomer to Canada, Arrive; and Paying wages and keeping records, Employee Standards, Government of Manitoba. Accessed November 8, 2023.

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