(Montreal) Straddling recklessness and misunderstanding, many workers say they are ill-equipped to assess their payslip, according to a new study by Payments Canada.
Updated yesterday at 11:16 p.m.
Carelessness of personal finances
Each year, nearly $971 billion is paid to Canadians in wages or benefits, according to Payments Canada.
However, more than the majority of the population say they pay little attention to the income and deductions that appear on their payslip, according to the Payments Canada study. Some 46% of Canadians believe they pay more attention to the weather than to their pay stub. Same story with social media.
“It’s absurd that people spend 35 or even 50 hours working without taking 10 minutes to look at their paycheque every two weeks,” laments David-Alexandre Brassard, Chief Economist of Chartered Professional Accountants of Canada.
Unused payslips
No less than 34% of the population evaluates the details of their payslip only at the time of the declaration of income, according to the study of Payments Canada. This is a “surprising” number in the eyes of Kristina Logue, director of finance at Payments Canada.
This means that a third of the population worries about their pay only once a year.
Kristina Logue, Director of Finance at Payments Canada
Furthermore, 35% of the population find it “intimidating” to examine the details of their statement. Nearly a quarter of Canadians are embarrassed to ask their employer for pay details, the study found.
A complex tax system
There is an “alarming gap” in Canadians’ understanding of pay slips, the Payments Canada study finds. The organization claims that 35% of the population confirms that they ignore certain aspects of their pay stub and that 38% claim not to have the ability to trace an error.
According to David-Alexandre Brassard, the tax system must be improved to make it easier for employees. In addition to the two levels of government taxation, there are source deductions from employers and secondary income: “In defense of the people, it’s quite complex,” underlines the economist.
The “important” numbers of the pay stub
The majority of payrolls are made by direct deposit. The fact remains that you have to remain disciplined and consult the readings, explains David-Alexandre Brassard. Tax errors are rare, he said. However, it is essential to revise the amounts of gross income and employer deductions to avoid compensation errors, adds the economist.
According to the Payments Canada study, 45% of the population receives their pay without having completed a financial management plan. Staying up to date with their payslips allows Canadians to make better personal finance decisions, says David-Alexandre Brassard.
For example, Canadians still think that if they earn more money, they will necessarily pay more taxes on all their income. “It’s a myth that we still have to deconstruct,” says the specialist.
Technological innovations
The modernization of payment systems offers a multitude of efficient platforms that facilitate understanding and simplify access to information, according to Kristina Logue. Technological innovations also represent an opportunity for employers to help their employees better understand the details of their payslip and their financial benefits, she adds.
According to David-Alexandre Brassard, the digital transition also facilitates personal finance education through online courses, newsletters and accessibility. According to him, a school curriculum for young people would ensure a better understanding of the tax system in the future.