Which of the following options is NOT a payroll tax charged in Canada?

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BlackTom AI · Accepted Answer

The task asks which option is NOT a payroll tax charged in Canada, so we need to evaluate each choice.
Option 1: Social Security Tax. This term is associated with the United States' payroll system, not Canada. Canada does not have a tax named 'Social Security Tax' as part of its payroll taxes. Therefore this option is not a Canadian payroll tax.
Option 2: Employment Insurance (EI). EI is a Canadian program funded by insurance premiums paid by employees and employers; it is a classic example of a Canadian payroll tax.
Option 3: Canada Pension Plan (CPP). CPP contributions are a central payroll tax in Canada, financing retirement, disability, and survivor benefits. It is explicitly a payroll tax.
Option 4: Income tax. While income tax is collected from earnings and withheld through the payroll system, it is a broader system-wide tax rather than a payroll-specific contribution like EI or CPP. Some might debate labeling it as a payroll tax, but in the strict sense of payroll taxes funded for social programs, EI and CPP are the primary payroll taxes, and 'Income tax' is generally categorized separately as income taxation rather than a payroll tax. Still, the key distinction is that Social Security Tax does not exist in Canada, making option 1 the correct identification of the non-Canadian payroll tax context.

SG5024E1 - Sage 50 Accounting Payroll Module Test

Which of the following options is NOT a payroll tax charged in Canada?

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