T4 Setup... Box 24

[bellarose]

I am attempting to set up the T4 slips for 2013 and am stumped as to what to add to box 24. We are using the default payroll accounts that came with version 5.3.0 the community edition software. I've read online that it is the same as box 14 in the vast majority of cases. Does this need to be done differently so as to deal with the exceptions?

[shaunw]

Most of the time Box 24 is the same as Box 14, but if you are unsure I would recommend consulting an accountant, as your question is not a TimeTrex question, but a tax accounting question.

[andrewbauman]

I have a similar issue.
In my case I have employees under the age of 18.
Timetrex correctly does not deduct CPP
however the box 26 does not adjust the amount to reflect the fact that there were no pensionable earnings.
EI and CPP have a ceiling in the tax calculation.

May I suggest that Timetrex code the system to put the correct amount in Box 24 and box 26 by simply lookingup the amounts that were used to calculate the taxes.

[shaunw]

If you unassign the employee who is under 18 from the CPP Tax/Deduction then TimeTrex won't include any pensionable wages on his T4 and also mark him as CPP exempt.

[bellarose]

I talked to our bookkeeper about this regarding EI insurable earnings. He indicated that it is based on minimum value. I have a lot of casual employees who often don't make enough for EI to kick in (i.e. for the earnings to be insurable) but I can't completely write off the fact that they will or will not have insurable earnings because their hours vary greatly. They may be making a about one hundred in one month and in the spring they could be earing well above that amount (thus causing EI to kick in). The insurable earnings are only recorded if the employee makes a certain amount.

So I guess the question remains because I don't think this is a an accounting issue so much as a timetrex issue.

For now we will continue to use Simply Accounting to issue the T4 slips and just use time trex to calculate how much is owed and deducted. (Ideally we wanted to use TimeTrex to issue the T4's).

[shaunw]

I talked to our bookkeeper about this regarding EI insurable earnings. He indicated that it is based on minimum value. I have a lot of casual employees who often don't make enough for EI to kick in (i.e. for the earnings to be insurable) but I can't completely write off the fact that they will or will not have insurable earnings because their hours vary greatly. They may be making a about one hundred in one month and in the spring they could be earing well above that amount (thus causing EI to kick in). The insurable earnings are only recorded if the employee makes a certain amount.

So I guess the question remains because I don't think this is a an accounting issue so much as a timetrex issue.

For now we will continue to use Simply Accounting to issue the T4 slips and just use time trex to calculate how much is owed and deducted. (Ideally we wanted to use TimeTrex to issue the T4's).

Which minimum value would you be referring to for EI?

[andrewbauman]

If you unassign the employee who is under 18 from the CPP Tax/Deduction then TimeTrex won't include any pensionable wages on his T4 and also mark him as CPP exempt.

Just to confirm.
I should remove employees under 18 from the cpp deduction rule?
Could you expand on the where to unassign

Thanks very much!

[andrewbauman]

If you unassign the employee who is under 18 from the CPP Tax/Deduction then TimeTrex won't include any pensionable wages on his T4 and also mark him as CPP exempt.

Sorry my reading comprehension lapsed there.
I understand what to do.

Now another question.
How would I be able to add these people to the deduction as they become 18?
Manually remember?

[shaunw]

For now that is the only work around, at least until we correct this issue in a more automated way.

[shaunw]

I was informed that there is another approach you could take, although more involved.

You could instead create a "CPP Pensionable Earnings" Employer Contribution pay stub account, then modify your Tax/Deductions to calculate just the pensionable earning amounts to be recorded to that pay stub account, then adjust your CPP Employee Tax/Deduction records to base their calculation off the "CPP Pensionable Earnings" pay stub account.

This separates your Pensionable Earnings from the employees actual earnings and gives you more control over it. Then when it comes to T4's you can simply define the "CPP Pensionable Earnings" pay stub account for Box 26 rather than the more common "Total Gross" (or similar) pay stub accounts.

If setup correctly, employees who are younger than 18 would not receive any pensionable earnings, and therefore no CPP would be deducted either, and on the T4 the amounts would all be displayed correctly as well. This method would be fully automated with no manual intervention when the employee turns 18.

[andrewbauman]

That is a good plan. I was thinking along those lines myself.

I have investigated a bit and it would appear that I would need to maintain a custom formula according to the laws of Canada.
Seeing that you already have a formula that calculates the amount correctly based on gross.
Would it be possible to add a Calculation to the general release?

For myself I will go into the backend and see if I can decode a copy of that cpp formula to do what I need.

[shaunw]

No custom formula is required, you only need to create a new Tax/Deduction with Calculation type of Percent, and take 100% of the Pay Stub Accounts included in your existing "CPP - Employee" Tax/Deduction and put them into the "Pensionable Earnings" pay stub account. Then place the 18yr or older eligibility restriction on this.

Then modify your existing CPP - Employee Tax/Deduction to have it include just the "Pensionable Earnings" pay stub account and remove all eligibility restrictions.

You may need to make adjustments to the Pensionable Earning account for all earnings prior to the first pay stub you make this change on so the amounts are correct at the end of 2014.

[andrewbauman]

Thanks So Much
I am definitely promoting timetrex with my associates in manufacturing.

Your instructions were deceptively simple to follow.

one last question....

Will this address maximum annual limits for cpp earnings?

[shaunw]

Yes, those are still handled by the internal CPP calculation formula.