Beginning January 1, 2011, the payment of assessments to the CSST will no longer be based on estimated wages for the coming year. This payment will now depend on the wages actually paid to workers and be payable directly to Revenue Québec.
From that date, Revenue Québec will provide businesses with a new slip that will be used to transmit the payment of the assessment owed to the CSST. This assessment, which is neither more nor less than your insurance premium to the CSST’s public insurance plan, must be paid at the same time as your source deductions and other employer contributions.
Since there are different payment frequencies for source deductions and other payments to Revenue Québec (weekly, monthly, yearly, etc.), the payment of your CSST premium will be done at the same frequency as that to which you are subject for the other deductions. Revenue Québec will later transmit any monies owed directly to the CSST.
In addition, the calculation of the payable premium will be done differently. Until now, employers had to estimate wages they would pay for the current year before March 15 of each year, and calculate CSST premiums accordingly. This approximate system was difficult to manage in certain industries such as construction. Indeed, an employer who was getting more contracts than expected during the year had to pay a substantial premium to the CSST in the final statement of wages, sometimes creating liquidity problems. Conversely, the company whose activities had declined significantly during the year was found to have spent unnecessarily money of which it was deprived until the final statement of wages, several months later. This system is now abolished.
The payable premium will now be calculated from the insurable wages actually paid during the period for which you are reporting to Revenue Québec. To calculate the premium, the employer will have to use its rate of assessment, which will continue to be communicated in October for the coming year. Should the premium rate change during the year, the CSST will notify employers by sending a report. Employers will then be able to adjust their payment accordingly.
For employers that have multiple classification units for their business, the CSST will provide a single average assessment rate. This rate will be determined by the CSST, who will use the average of the rates assigned to the employer, each weighted according to their importance. However, an employer may choose to pay the premium for each unit, determined by frequency of reporting to Revenue Québec, rather than paying a blended rate.
The fiscal year of final statement of wages remains unchanged and must be submitted before March 15. But because the new system described above is based on actual wages, there should be few changes for employers. However, employers should be aware that any delay in reporting final wages will lead to the imposition of a penalty of $25 per day late, up to $2,500.
Finally, note that in case of a default, penalties are steep and can go up to 15 per cent of the unpaid amount.
An explanatory guide was published by the CSST, entitled "Save yourself a lot of formalities: the new mode of payment of the insurance premium." It explains the rules of this new system and provides relevant examples. This guide is available for download from the CSST website (www.csst.qc.ca/index.htm). Unfortunately, it is not yet available in English.
This new procedure for payment of the assessment based on real wages is generally well received by employers' associations of various industries, as it will allow the payment of assessments that are based on the reality of each employer and it will no longer be necessary to conduct the annual exercise of estimating salaries for the coming year, which is long and sometimes futile.