Another 10 days to go before Christmas hits the ground, by the time this article is published! As Christmas approaches, so does the year-end and there is lots to ponder for church ministries. Some of the questions that come to mind include the following:
- What about next year’s payroll statutory deductions? What are the new rates released by the CRA for 2019? To find out, please also read the Q & A section of this article.
- Is our new year’s church budget ready to rock and roll? Are we able to make ends meet?
- Are we ready with the tax receipting process to be completed by December 31st?
- Have we started to contemplate closing all the current year journals so that a seamless process towards year-end closing can be done in January of the new year (for those whose fiscal year-end falls on December 31st)?
- How about church staff performance evaluations? Are we due to review and renew staff contracts for next year?
- Have I sent in all the contributions deducted for the SunLife pension plan for staff? If not, do I need to catch up before December 31st? It is required by the provincial regulator in Ontario of the pension plan that all deductions must be submitted on time.
- Did I remit in all statutory deductions comprising of CPP, EI, Federal and Provincial taxes to the CRA on time? If not, do I need to deal with the outstanding amounts plus interest charged for late submissions?
- Did I remit all sabbatical leave fund deductions for pastoral staff to the CBWC? Do I need to catch up for the year?
- Have we sent in all church contributions to the CBWC for the current year? If not, do I need to recalculate the remaining amount that needs to be sent?
- Were all obligations to fund qualified donees met during the year?
- Have all Clergy Residence Deduction forms, the T1223E, been issued to the qualified pastoral staff yet? If not, can this be completed ASAP before year-end?
- Are you ready with the T4s and if the final payroll reconciliation being completed before December 31st?
The above questions are not exhaustive, but nonetheless provide us with some thoughts 10 days before Christmas! Lastly, I have some Q & A below that I would like to share with you as well. Wishing you and your families a restful and joyful season as we anticipate the coming of the New Year! Below is a Scripture verse to remind us the reason we are celebrating this season!
– Victor Ku
Questions & Answers:
Q: What are the 2019 statutory deduction rates and limits for CPP and EI?
- Maximum Pensionable Earnings: $57,400
- Basic Exemption Amount: $3,500
- Employee and employer contribution rate: 5.1%
- Maximum employer and employee contribution to the plan: $2,748.90 ea
- Maximum Insurable Earnings: $53,100
- Contribution rate of $1.62 per $100 of insurable earnings
- Maximum annual contribution for an employee: $860.22
- Maximum annual contribution for employer per employee: $1,204.31
New Payroll Deductions Tables (T4032) can be found after January 1st, 2019 here: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/t4032-payroll-deductions-tables.html
For the Payroll Deductions Online Calculator, please clink on this link: https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/payroll-deductions-online-calculator.html
Q: How do you balance a church budget for the new year?
A: Be realistic in identifying all funding sources or revenue streams. Carry out historical analysis on the last three years’ revenue and compare the average numbers with your projected revenue estimated for the new year, to see if there are big variances. Adjust the new year revenue budget accordingly to reduce these variances, because chances are this will be the more realistic numbers to expect in 2019.
Review all expense line items individually, and review the last three years’ expenses by line items to measure variances with your new year expense budget. Discuss with stakeholders whether the line item expenses justify what the request is for? Questions on needs should be addressed with the individual ministries and logically defined in terms of sustainability and effectiveness. In most cases, a few rounds of discussion will be needed with those involved in the budgeting process to decide on the final budget, to be presented and approved in a congregational meeting.
Cost savings is an important part of the budgeting process that often gets overlooked in terms of its impact on balancing the budget. In the new year, we’ll release a series of articles to encourage a cost savings attitude for funding ministries. In the past seven years, CBWC has saved $529,086 from cost savings projects! This money then gets to be invested into key ministries of the CBWC.