WS: 77: World Legislative Enhancement For Canadian 2023 CPP/QPP F5 Deduction Phase 1 and 2024 CPP/QPP Deduction Phase 2 (Doc ID 2932397.1)

Last updated on JULY 15, 2024

Applies to:

Symptoms

Phase 1 Summary -

Vertex Payroll Tax was adjusted to accommodate:

• New F5 deduction

The new F5 deduction is treated as a calculated deduction against the taxable wages, so you do not need to pass in a Deduction ID and amount. Instead, the deduction is calculated based on available data.

• K2 formula changes
• K2 reconciliation for employees that transfer in or out of Quebec

New forms

The following output-only forms were added to the Vertex® Payroll Tax Q Series® 4.4 Forms Guide:

• CANADA.F5 – Deductions for Canada Pension Plan additional contributions for the pay period
• CANADA.F5A – Deductions for Canada (or Quebec) Pension Plan additional contributions for the pay period deducted from the periodic income, if a non-periodic payment exists
• CANADA.F5B – Deductions for Canada (or Quebec) Pension Plan additional contributions for the pay period deducted from the non-periodic payment

These forms return the calculated values of F5, F5A, and F5B.  The following input-only form was added to the Vertex® Payroll Tax Q Series® 4.4 Forms Guide:

• CANADA.F5_PREV - Pass in this form when you use the Previous Aggregation method. You must use the F5 value passed on the output form of the most recent regular wage payment as the input value for this new form. The presence of this value enables the Vertex tax engine to set the previous wages appropriately.  Vertex created these forms because the effective data needed to be updated to handle the F5/F5A/F5B deduction.

Phase 2 Summary -

The Canada Revenue Agency has planned a second earnings ceiling for the Canadian Pension Plan (CPP) and Quebec Pension Plan (QPP) contributions. Changes to the CPP/QPP deduction calculations and their impacts to the federal and provincial withholding values are effective January 1, 2024.

Terminology is used for this new contribution:
C2/Q2 - The additional contributions, known as the Second Additional Contribution

Changes

Cause

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