Assignment 1 Payroll Fundamentals 1
Date: 2024/09/15
From: Sarbjeet Kaur
To: Richard Murphy
Subject: Valuable Figures About New Group RRSP Plan
Dear Team,
We are thrilled to disclose the beginning of a new RRSP targeted at
supporting your long-term financial goals and recognizing your years of
dedicated service. Here's a summary of how the plan will operate, including
information on contributions, employer matching, and withdrawals.
Contribution Structure
You can choose to contribute a part of your regular salary to our Group RRSP
plan, based on your length of service for the company. The contribution for
employee percentages is as follows:
Less than 2 years: 1%
2-3 years: 2%
3-4 years: 3%
4-5 years: 4%
More than 5 years: 5%
Moreover, the company provides a generous contribution matching
program.9The company match the amount of money you contribute which
doubles the amount of savings. For instance, if you decide to contribute 2%
of your salary, the company will match this with an additional 2%,
significantly enhancing your retirement savings.
Impact on Statutory Withholding Amounts and Net Pay
When you provide money to your RRSP, the amount is withheld from your
salary before income tax is calculated. This means that your taxable income
is reduced. By providing more to your RRSP, you will pay less income tax. For
example, if you make $30,000 a year and contribute 3% ($900), your taxable
income will cut to $29,100. This may move you into a shorter tax set,
additional cutting the amount of tax you owe.9
