There are three steps by which employers could calculate the total insurable earnings that they would need to enter in Block 15B. These steps comprise:
It is worth mentioning that employers might want to complete Block 15C before they complete Block 15B. This is applicable even if they do not require to fill in Block 15B. Thereafter, they would need to fill out Block 17. Doing so might make it easier for employers to calculate the correct amount that they need to enter in Block 15B. It might also reduce the number of calls that employers receive from Service Canada that request for additional information. This chapter provides instructions on the manner in which employers would need to complete Block 15C.
Note:
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In some situations, employers might pay their employees in foreign currency
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In this scenario, the employers bear the responsibility for converting the foreign currency into Canadian dollars for the purpose of completing the Record of Employment (ROE)
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Employers would need to calculate weekly average amounts for the employee’s earnings over the period of employment that they have reported on the Record of Employment (ROE)
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This is usually done in cases where:
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An employee’s earnings might comprise commissions only or salary and irregularly paid commissions – this would typically be the case with real estate agents or commission salespeople or,
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An employee has irregular pay periods such as some contract workers typically do
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For more details, employers would need to refer to the notes given in the section titled ‘How to Use the Weekly Averaging Formula’
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Situations could arise where unpaid wages (that do not include amounts for overtime or termination pay) remain due to employees on separation
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This would typically be the scenario because of the employer’s bankruptcy, receivership or impending receivership
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In this scenario, the employer would still need to include the hours and the earnings on the Record of Employment (ROE)
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Employers would need to ensure that the amounts that they include in Blocks 15B and 15C reflect the actual amounts that the employee earned
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As such, employers would need to avoid including any amounts that they paid in error to the employees on the Record of Employment (ROE)
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In situations where the employer determines subsequently that the employer would not be able to recover the money that they paid in error to the employee, the money paid would become a taxable benefit
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In this scenario, the employer would need to include this amount on the Record of Employment (ROE) in the pay period during which the employer determines that the employer would not be able to recover it
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Step 1 – Determining the Number of Consecutive Pay Periods to Use
In Block 6, the employer would have specified the pay period type. Now, the employer would need to determine the number of consecutive pay periods that occurred during the period of employment. In other words, they would need to determine the amount of time between the date specified in Block 10 and the date specified in Block 11. In particular, the employer would need to add up the number of full, partial and nil pay periods that occurred during the period of employment starting from the most recent pay period up to a predetermined maximum number. It is worth mentioning that nil pay periods denote any pay periods during which the employee did not work and thus, did not receive any insurable earnings. For more details, employers would need to refer to the table given below.
The Pay Period Type | The Maximum Number (*) of Most Recent Consecutive Pay Periods Used for Calculating the Employee’s Total Insurable Earnings |
Weekly | 27 |
Biweekly | 14 |
Semi-monthly (including non-standard) | 13 |
Monthly (including non-standard) | 7 |
13 pay periods in a year | 7 |
* – The number of pay periods the employer uses for determining the number of hours to enter in Block 15B will be different from the number of pay periods that the employer uses for Block 15A
Example 1: An employer’s pay periods end on every other Friday. Thus, this particular employer follows a biweekly pay period. Sean began working for this employer on May 10, 2015 and his last day of work was October 15, 2015. It is worth mentioning that Sean’s first pay period that he worked for was a partial one. This is because it ended on May 14, 2015. Moreover, Sean did not work for one full pay period during the summer. As such, Sean did not receive any earnings for this two-week period.
In this scenario, the employer would need to enter 10 May, 2015 in Block 10. Thereafter, the employer would need to enter October 15, 2015 in Block 11. Lastly, the employer would enter October 15, 2015 in Block 12. To determine the number of applicable pay periods, the employer would need to count the number of full, partial and nil pay periods that fall during the period of employment. In this specific case, there were 12 full, partial and nil pay periods between May 10 and October 15. To calculate Sean’s total insurable earnings, the employer would need to add up all the insurable earnings that Sean received during these 12 pay periods.
Example 2: An employer’s pay period ends on the last day of the month, which indicates that this particular employer follows a monthly pay period. Frances began working for this employer on January 04, 2005 and her last day of work was June 18, 2015. No interruptions of earnings took place at any point during these 10 years. Therefore, the employer has not issued Frances any previous Records of Employment (ROEs).
In this case, this employer would need to enter 04 January, 2005, in Block 10. The employer would then need to enter 18 June, 2015 in Block 11. In Block 12, the employer would need to enter 30 June, 2015. The employer would need to consult the table given above for determining the number of pay periods that apply. The table specifies that the maximum number of monthly pay periods that apply is seven. As this employer follows a monthly pay period and because Frances worked for more than the maximum number of pay periods, the employer would only need to report the insurable hours for the most recent successive seven pay periods on Frances’s Record of Employment (ROE).
Step 2 – Determining Which Earnings Are Insurable
The employer would need to determine the number of pay periods that the employer needs to use first. Then, the employer would need to determine the employee’s insurable earnings for each pay period. This would include any statutory holiday that applies. For determining the earnings that are insurable, employers would need to refer to Annex 1 on the types of earnings and insurable hours. In all cases, the employer would need to include statutory holiday pay in the insurable earnings. However, they would need to figure out which pay period they should include it in.
In case the statutory holiday occurred during the period of employment (or prior to the date the employer has entered in Block 11), the employer would need to report the statutory holiday pay in the pay period during which the statutory holiday took place.
In case the statutory holiday occurred after the period of employment (or after the date the employer has entered in Block 11), the employer would need to include the earnings for the statutory holiday in the final pay period.
For instance, consider a situation where an employer’s pay period is monthly. As such, this employer would have a pay period that has an end date as the last day of the month. John has worked for this employer since May 21, 2005 and his last day of work is December 30, 2015. In Block 10, the employer would need to enter 21 May, 2005. Similarly, in Block 11, the employer would need to enter 30 December, 2015. Finally, the employer would need to enter 31 December, 2015 in Block 12.
This employer paid John for the January 01 statutory holiday. This holiday is occurring after the date the employer has entered in Block 11. In this case, the employer would need to include the statutory holiday pay for January 01 in the final pay period. In this case, the employer would need to enter 01 January, 2016, and the corresponding in Block 17B Statutory holiday pay as well.
Step 3 – Calculating the Employee’s Total Insurable Earnings
Employers would first need to determine the total insurable earnings that the employee has received for each pay period. Thereafter, the employer would need to add all the insurable earnings together. This amount would be the total insurable earnings for the employee. Employers would need to enter it in Block 15B.
It is worth highlighting that employers would need to report all insurable earnings that the employee has received and not merely the Employment Insurance (EI) maximum insurable earnings amount.