Guide to Global Payroll Management Any claims for STD/LTD benefits subsequently paid to an employee in an employee-pay-all plan are not considered taxable. An employer cannot change the tax status of the plan by simply adding the value of the employer paid premium to the employees' taxable income. Whether or not a plan is employeepay-all is a matter of fact, and the employer would have to validate the status of the plan that was contracted with the third party. YEAR-END REPORTING REQUIREMENTS If the employer pays the premiums for an employee-pay-all plan: Box 14 and Code 40 in the "Other information" area of the T4 Box A and L of the RL-1 AUTHORITIES Income Tax Act Quebec Taxation Act IT Bulletins 470R, IT Bulletin 428 Employers' Guide - Taxable Benefits (CRA/RQ) DIRECTORS' FEES Depending on the size of a company, most incorporated companies have a board of directors. The directors may or may not be employees of the company. In return for serving on the board, directors are paid directors' fees. Directors' fees paid to residents and non-residents in Canada for services rendered in Canada are pensionable (subject to CPP or QPP) and taxable, but not insurable (EI). In the province of Quebec, all directors' fees are subject to QPIP whether the amounts are paid to residents or non-residents in Canada. CANADA/QUEBEC PENSION PLAN CONTRIBUTIONS CPP contributions must be deducted from payments issued to board or committee members (directors) of a corporation employed in Canada. This applies to resident and non-resident directors. In the case of a non-resident director, do not deduct CPP if the employment duties are performed wholly or partly outside Canada. Whether CPP contributions are required when there is an employment relationship between a director and a corporation will be based on the director's employment status. To determine the CPP or QPP contributions required on a fee being paid to a director who is also an employee of the company, add the fee to the employee's regular remuneration and use the tables or the manual method. When a director's fee is being paid to a director who is not an 11-80 © The Canadian Payroll Association/L'Association canadienne de la paie 2020