What is PIER review?
A PIER review is the CRA’s check of filed T4 slips for under-deducted CPP and EI, after which the employer is billed for the shortfall and its share.
PIER stands for Pensionable and Insurable Earnings Review. After employers file their T4 slips, the CRA recalculates the CPP contributions and EI premiums each employee should have paid based on the earnings reported. If the amounts deducted were too low, the CRA sends the employer a PIER deficiency notice for the shortfall. The employer owes both the employee portion that was not withheld and the matching employer portion.
Under-deductions usually come from setup errors rather than arithmetic. Common causes include taxable benefits that were not treated as pensionable or insurable, employees wrongly marked as CPP- or EI-exempt, incorrect handling of employees who turned 18 or 70, pay periods set up with the wrong frequency, and employees who moved between provinces or into or out of Québec during the year. Each of these leaves a gap that only shows when the full year is added up.
The best defence is running your own review before the T4s are filed. Recalculating each employee’s expected CPP, CPP2 and EI on the year’s earnings and comparing it with what was deducted lets you correct shortfalls through payroll in the final pay periods, or at least know what is coming. The employer can sometimes recover the employee share from the employee, but only within limits set by the CRA.
An employee received a $3,000 taxable car benefit that payroll did not treat as pensionable. At 5.95%, the missed CPP is $178.50. A PIER notice bills the employer $357.00: the $178.50 employee share plus the matching $178.50 employer share.
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