Mandatory Employment Related Costs (MERCs): MERCs are costs that employers are required to pay based on federal or provincial/territorial laws. MERCs under the federal law include employment insurance (EI) and Canada Pension Plan (CPP).
How is MERCs calculated in Canada?
To estimate your annual contribution when hiring a new employee, multiply their salary by 0.0162 and multiply the result by 1.4. Note that you only pay EI premiums on earnings less than $51,300. If you pay your employee more than this amount, your maximum annual contribution is $1,204.31 for 2019.Dec 11, 2016
What is included in MERCs Canada?
(A) Employers are required by law to pay the Mandatory Employment Related Costs (MERCs) for their employees. In BC these costs include Employment Insurance premiums, Canada Pension Plan contributions, vacation pay, Workers' Compensation premiums or equivalent liability insurance (if applicable).
What percentage are MERCs in Canada?
Employer Health Tax of 1.95% on payroll exceeding $450,000 per year). For more information, Employers should consult the Canada Revenue Agency's website. They can also check the provincial/territorial workplace safety standards website and the financial implications for the employer.
How do you calculate the true cost of an employee?
Calculate an employee's labor cost per hour by adding their gross wages to the total cost of related expenses (including annual payroll taxes and annual overhead), then dividing by the number of hours the employee works each year. This will help determine how much an employee costs their employer per hour.
What are MERCs in Ontario?
Employers are required by law to pay the Mandatory Employment Related Costs (MERCs) for their employees.Feb 3, 2017
Is vacation pay part of MERCs?
Does the subsidy cover Mandatory Employer Related Costs (MERCs) and Vacation Pay? The subsidy covers employer charges including the Canada Pension Plan (CPP), Employment Insurance (EI) and vacation pay. Employers may choose to pay out the 4% in lieu of vacation or to offer vacation within the contract.
How do small businesses set up payroll in Canada?
7 Steps to Small Business Payroll in CanadaRegister with federal agencies. ... Gather employee information. ... Calculate gross wages. ... Calculate and deduct taxes and contributions. ... Reconcile and issue paychecks. ... Remit deductions and taxes to the CRA. ... Generate and share Forms T4.Aug 20, 2020
What is voluntary deduction?
Voluntary Deductions Voluntary paycheck deductions are taken for programs in which individuals participate voluntarily, e.g., health insurance, dental insurance, retirement, etc. Participation in these programs may require that the individual complete a written salary reduction agreement authorizing payroll deductions.
What are the 5 mandatory deductions from your paycheck?
Mandatory Payroll Tax DeductionsFederal income tax withholding.Social Security & Medicare taxes – also known as FICA taxes.State income tax withholding.Local tax withholdings such as city or county taxes, state disability or unemployment insurance.Court ordered child support payments.Aug 7, 2012
What type of cost is salary?
Annual salaries are fixed costs but other types of compensation, such as commissions or overtime, are variable costs.
What percentage is labor cost?
20 to 35 percentThe Significance of Labor Cost Typically, labor cost percentages average 20 to 35 percent of gross sales. Appropriate percentages vary by industry, A service business might have an employee percentage of 50 percent or more, but a manufacturer will usually need to keep the figure under 30 percent.
How do I calculate how much an employee costs per hour?
While there's no one-size-fits-all solution to calculating total employee cost, the formula most commonly used (and a safe estimate if you're trying to budget for a new employee) is that the average total cost for an employee is between 1.25 and 1.4 times the employee's base salary.
Complete Access
Our cloud-based technology means your data is available anywhere, anytime. Access your secured data when you need it from the office, home, or from our convenient mobile app. With MercForce®, actionable information is always at your fingertips.
Pay with Cards
Replace paper checks with a safer, cheaper option—MercForce® Payroll Cards. Eliminate the costs associated with producing paper checks and any check-cashing fees your employees may encounter. Payroll cards are the perfect option for part time or seasonal workers who are unable to take advantage of direct deposit or other methods of payment.
Incredibly Secure
Rest assured, employee data is locked down and highly protected. Redundant hosting environments and secure separate employer/employee logins insures that potentially sensitive materials can only be accessed by appropriate parties and will be stored securely and ready to be accessed whenever you desire.
What is risk assessment?
Risk assessment involves an analysis to evaluate the recipient, the proposal, the planned activities and the budget against a set of established criteria.
What is payroll charge?
Payroll charges: Fees charged by financial institution or payroll service for the preparation and filing of the payroll. Performance indicator: A benchmark used to measure the extent, quality or quantity of a result produced. It is indicative of the size, amount or degree of progress towards the result.
What is leasehold improvement?
Leasehold improvements: Leasehold improvements (not applicable to the owner/landlord of a building) are modifications to an existing property that are durable (i.e., lasting more than one year) and revert, in principle, to the landlord or the owner at the end of the agreement.
What is a lease agreement?
Lease agreement: A contractual/legal document that indicates the specific terms of agreement between an owner (lessor) and tenant (lessee) that are agreed to by both parties, for the use of an asset (e.g., property, photocopier).
What is an in-kind contribution?
In-kind contributions: Resources provided by either the recipient or another organization that are integral to the operation of the proposed project/activity (e.g. use of space, equipment, salary) and do not require any reimbursement for their use. In-kind contributions are not eligible for reimbursement.
What is a deliverable in a project?
Deliverable (s): Deliverables are products (e.g. reports, publications, classes) that recipients commit to complete during the course of a project. Your CA would set out various deliverables that you, as a funding recipient, are expected to achieve and report on during the course of the project.
What is cultural interpreter?
Cultural interpreters: Interpreters used in the Settlement or Resettlement context are usually “cultural” interpreters, that is, they are permitted to not only translate what the client has said but are also to provide information on cultural aspects which may be affecting understanding of a subject.
Resources. We've got 'em
Find out how Mercantile Payroll can save you money by using our helpful calculators. Use the drop-down to select the calculator you want to try.
Calculators
Find out how Mercantile Payroll can save you money by using our helpful calculators. Use the drop-down to select the calculator you want to try.
Why choose Mercans?
The only global payroll outsourcing specialist that meets all international compliance requirements – GDPR, ISO 20001, ISO 27001, SOC 1, SOC 2, OWASP and ASVS 3.
What our clients say
We have been using Mercans payroll solutions for a couple of years. The support from both the operational and technical team is commendable and the have made our payroll processes much easier.
Enhance your employee experience with scalable and powerful HR platforms
An ATS-integrated recruitment platform and job portal, Mesaar™ meets both employer and candidates needs.
What is a merc?
Merc. Merc (MUD), a text-based online game software platform. Merc (script) or Meroitic Cursive, derived from Demotic Egyptian. Merc 2000, an alternative setting for the Twilight 2000 role-playing game. Mark Hazzard: Merc, a comic book series published by Marvel Comics.
What does Merc stand for?
Merc. as an abbreviation. Mercury (automobile), a former division of Ford Motor Company. Chicago Mercantile Exchange, or the building where it operates, the Chicago Mercantile Exchange Center. Mercantile National Bank Building, a building in Downtown Dallas.
On this page
You can use our Payroll Deductions Online Calculator (PDOC) to calculate payroll deductions for all provinces and territories except Quebec. It calculates payroll deductions for the most common pay periods (such as weekly or biweekly), based on exact salary figures.
CPP and EI
You can use the manual calculation for CPP and the manual calculation for EI to calculate the deductions.
Important notice
The Department of Finance Canada has implemented legislation that will change the CPP. There will be a gradual 7 year phase in beginning in 2019. For more information, go to Department of Finance Canada .
Caution for employers using software programs, in-house payroll programs, and bookkeeping methods
For Canada Pension Plan (CPP) purposes, contributions are not calculated from the first dollar of pensionable earnings. Instead, they are calculated using the amount of pensionable earnings minus a basic exemption amount that is based on the period of employment.
Income tax
As an employer or payer, you are responsible for deducting income tax from the remuneration or other income you pay. There is no age limit for deducting income tax and there is no employer contribution required.
