Final answer:
To calculate EI deductions on a separate cheque, one should use the same method as regular wages (A). These deductions are part of payroll taxes that employees and employers split, despite the fact that the employer's share may indirectly impact the employee's net income.
Step-by-step explanation:
Understanding EI Deductions
When calculating Employment Insurance (EI) deductions on a separate cheque, one should use the same method as regular wages. This means that EI deductions should be calculated in the same way as they would be for a regular payroll period. It is not appropriate to exclude EI deductions, calculate them based on a fixed percentage that deviates from the norm, or consult with the employee for a custom deduction unless specified by law or in a collective agreement. Payroll deductions, which include social security contributions and other insurances, play a crucial role in funding various social benefit programs.
Taxes paid by an employer based on employees' wages include contributions to social security systems and other insurance programs. These contributions are a mixture of fixed charges and proportions of an employee's wages. In the United States, for example, an employee pays 6.2% for Social Security and 1.45% for Medicare. Employers match these contributions, although economic theory suggests that these employer contributions may effectively reduce the employee's take-home pay.