Payroll FAQs for Small Businesses in BC
March 23rd 2022
Complete Bookkeeping & Advisory Services is BC's premium certified bookkeeper providing bookkeeping services for businesses in Kamloops. With over 30 years of experience, Complete Bookkeeping also provides full cycle bookkeeping, including payroll management.
Before small businesses can afford a human resource team, they may struggle with payroll management for their employees. Payroll management seems like an easy job, but to anyone unfamiliar with payroll legislation it has high risks of mistakes that might lead to fines and penalties. If you run a small business in BC and are currently managing payroll by yourself, we want to share some basic payroll rules to help you.
As of June 1, 2021, BC's minimum wage is $15.20 per hour. For liquor servers, live-in camp leaders, home support workers, and resident caretakers, this minimum wage tends to differ. We can help you find the proper salaries payable to your employees!
As of August 31, 2020, once employees report to work, they are entitled to minimum daily pay of 2 hours even if they are sent home earlier.
For overtime, an employee is entitled to 1.5 times pay if they work more than 40 hours in a week or 8 hours on any given day. The overtime rate goes up to twice the pay for time worked more than 12 hours in a day.
|Hours Straight Time||8||8||6||8||30|
|Double Time rate||1||1|
|Source: BC Government (www2.gov.bc.ca)|
|Hours Straight Time||8||7||8||8||7||2||40|
|Double Time rate|
|Source: BC Government (www2.gov.bc.ca)|
An employer deducts these amounts from an employee's salary for social security, medical care, and government revenue. Such a deduction can either be required by law or voluntary; deductions would include taxes, pension, and insurance contributions.
Statutory Holiday Pay
BC government pre-specified 12 mandatory holidays for each year. Salary on such days differs from other regular working days.
An employee should fulfill two conditions to qualify for statutory pay:
• They should have been employed for 30 calendar days before the holiday, and
• They should have worked or earned wages for 15 of 30 days.
|Not working on statutory holiday||Average day's pay [A]|
|Working - Up to 12 hours||Hour-and-a-half rate up to 12 hours + A [B]|
|Working - More than 12 hours||Double time rate beyond 12 hours + B|
Effective Jan 1, 2022, after 90 days of employment, employees can take up to 5 paid days and 3 unpaid days of job-protected leave in their employment year, based on their starting date. Sick days are a calculated average day’s pay, based on the previous 30 days of employment. Illness or injury leave does not carry over from year to year if it is not used during the employment year. Employers should keep a record of the absence.
Vacation and Severance Pay
Vacation pay is simply money earned for taking time-off. All employees are entitled to two weeks of such pay per annum. It is calculated at 4% of all wages, including the vacation pay, earned in the previous year. After five years of work, it will be 6% of all wages made. Taking a vacation is a must when earning vacation pay.
In case of unwilful termination, an employee is entitled to receive severance pay. All employees who have worked for at least three months are entitled to receive this benefit when their employment is terminated without reasonable notice. The severance pay ranges from one to eight weeks' worth of pay depending on the period of work.
Such agreements are helpful when formalizing a contract between an employee and an employer regarding the terms of employment. It helps prevent any confusion later on. Such an agreement can include hourly pay rate, commissions, job duties, probationary period, employee benefits, and payment frequency, including mode of money transfer. Various kinds of agreements signed between the employer and an employee can include averaging contracts, employee benefits agreements, and union agreements.
If you feel overwhelmed about payroll legislation and need support, you can check out our full-cycle bookkeeping services. We can help you achieve your goals of hassle-free payroll and bookkeeping with our cloud-based solutions. Our team is committed to understanding your business needs by providing timely and accurate payrolls and financial reports. If you are located in Kamloops, visit our office or give us a call; if not, you can contact us to arrange a Zoom call. We will be happy to help you with your payroll system and bookkeeping.