The 2011 Federal Budget included a perk for small businesses that saw an increase in EI premiums in 2011. The hiring credit of up to $1,000 is automatically calculated by Canada Revenue Agency once your 2011 T4s are filed.

Now that you have received this credit how do you account for it in the books?

The options are to reduce your EI premium expense or include the credit as income in the year received. My preference is the latter. To account for this in your books the general journal entry is a Debit to Payroll Liabilities and a Credit to Other Income.

Take the mystery out of organizing your tax papers.  If you are a member of the Tri-City Chamber of Commerce, register for this upcoming seminar March 16.  Space is limited.

There are a number of tasks to complete when wrapping up the calendar year for your business, among them are filing the T4s and WCB return.

Don't panic, you have until February 29th to file but payroll remittances for 2011 must be remitted by January 16, 2012 (date extends to Monday when the 15th falls on a weekend).  Short remittances are subject to penalties so it is a good idea to reconcile your payroll before sending the December payment. 

There are four main changes to CPP effective January 1 2012:

1. The requirement to stop working or reduce earnings in order to apply for early benefits is removed.
2. CPP recipients who continue to work will continue to make premium contributions (as well as their employers) to age 70.
3. The rate of adjustment for early and late pension application increases.
4. The low earnings years ‘drop-out’ provision is increased.