Benefits

Why offer additional benefits to your employees? Farmers that decide to offer additional benefits such as dental and vision benefits, retirement savings plans, or health and disability insurance are more likely to attract new workers and retain current employees. There are countless types of benefits you could offer your employees, but we will only talk about a few today.

Why offer vision and dental benefits to your employees?

Offering vision and dental benefits is not mandated but these types of benefits have a great value-add to your employees. There is flexibility when offering these types of benefits; you can choose the coverage, whom it will cover and the rate you are wanting to cover. Types of coverage include:

1. Full Coverage
2. Minor Coverage
3. Basic coverage

You can select one of the following when deciding who you will offer the benefit to:

1. Employee
2. Employee and their spouse
3. Employee and their dependents

Covering your employees and their dependents can have a great impact, as most children require regular dental and vision checkups, they would be able to utilize their benefits to the fullest.

It will be up to the employer to decide if they want to cover a percentage of the premium rate, or a flat rate off the employee’s paycheque per pay period.

Insurance 

Insurance can be a scary word for some but can be very beneficial to your operation. The benefits of offering insurance such as basic life, drug or disability can ease your employees’ minds. They know that if they were to ever be injured while on the job, they wouldn’t have to stress about money. If something were to happen to them, their family would be taken care of.

It is up to the employer to decide what types of insurance they would like to offer. Types of insurance include but are not limited to:

• Health insurance
  - Single
  - Family
• Disability insurance
• Prescription drug coverage

Savings Plans

Canadian Pension plan

The CPP is a pension plan that provides contributors and their families with a partial replacement of their earnings in case of retirement, disability, or death. 4.95% of an employee’s income is deducted from their paycheque and is matched fully by the employer for a total contribution of 9.9% of total income. *This will be changing as of January 1, 2019, to 5.1% and increasing every year for the next several years. Quebec is the only province to have opted out of the CPP, and instead has the Quebec Pension plan. The QPP is almost identical to the CPP, except that the contribution rate is higher at 10.8%. 

Contributors are eligible to receive the full pension at age 65, or they can choose to receive it as early as age 60 with a reduction, or as late as 70 with an increase. Employees can choose to continue working while receiving their pension until the age of 70. The AgExpert Analyst Software deducts the CPP contributions from a paycheque automatically as part of the payroll process. The total of both these deductions is what’s sent to the Canada Revenue Agency.

It should be noted that the AgExpert Analyst software is currently unable to automatically determine whether an employee is eligible for CPP contributions based on their date of birth. Employees under the age of 18 and employees collecting CPP payments do not make CPP contributions.

Private Pension Plan

Employers can choose to supplement the CPP by setting up a private pension plan for their employees. This is like CPP, in that the employer usually matches the employee contributions either fully or partially. There are two types of pension plans, defined benefit plans and defined contribution. In the defined benefit plans, the pension payments to the employees are fixed amount that does not change no matter what. In the defined contribution model, the pension payments can vary depending on the market performance of the fund.

Essentially, in a defined contribution plan, the employee takes on market risk, while in a defined benefit plan, the employer assumes the risk as they will have to pay out the pension and payments no matter how the fund is performing in the market. Another option can be a group RRSP which is similar to a pension plan. 

For step-by-step instructions about how to setup new benefits or pay types for your employees in AgExpert, visit our online community. You can also visit the CRA website.