User Guide

Calculating the Employer's Associated Expenses
18–16 Simply Accounting
Amc18.doc, printed on 12/05/97, at 12:03 PM. Last saved on 12/05/97 10:24 AM.
Confidential ACCPAC International
Calculating the Employer's Associated Expenses
In addition to the gross earnings expense (less any taxable
benefits), the employer must pay the following additional wage-
associated expenses:
EI Expense
CPP Expense
WCB Expense
________________
Total Employer's Associated Expense
The first two of the above wage expenses are statutory expenses
and must be paid by all employers, while the third expense is
dependent upon the type of work being performed by the
employer.
CPP and EI Expenses
Revenue Canada requires employers, as well as employees, to
make CPP contributions and to pay EI premiums.
Specifically, in 1991, the employer must pay an amount equal to
each employee's CPP contribution and equal to 1.4 times each
employee's EI premium. Employers who have had a Wage Loss
Replacement Plan approved by Revenue Canada and
Employment and Immigration Canada, may pay less than 1.4
times each employee's EI premium.
If, as in our example, the employer is required to withhold
$27.36 from the employee's paycheque as the employee's CPP
premium and $36.54 from the employee's paycheque as the
employee's EI contribution, then in addition to these amounts,
the employer must pay a $27.36 CPP premium and a $51.16 EI
contribution (using a factor of 1.4). The employer's expenses are
therefore $78.52 ($27.36 + $51.16) and the amount payable to the
Receiver General by the employer is $142.42 ($27.36 + $36.54 +
$27.36 + $51.16).