Canadian EI Tax Is Calculating 0 When There Is Enough Money To Take The Tax To The Limit
Last updated on MARCH 08, 2017
Applies to:Oracle HRMS (Canada) - Version 12.1.2 and later
Information in this document applies to any platform.
On : 12.1.2 version, Canadian Payroll Tax Issues
After applying the July Vertex monthly update, if the employee is close to the EI tax limit, there is no deduction taken
The system to always do the self adjust for the EI tax. This tax should be deducted or refunded for the EI tax as needed when the employee gets to the Annual Maximum tax
The issue can be reproduced at will with the following steps:
1. After applying July vertex, Canada EE EI tax is sometimes calculated to 0 when it should have an amount.
2. This happens when the current payroll causes EI to go to the limit.
3. This happens when the calculated amount is just less than the limit (example: the taxable amount is the amount to take the earnings to the annual limit of 49500, but the taxable amount * rate is less than the tax limit of 930.60.
4. Before July vertex was applied, the tax would be the taxable amount * rate.
5. After July vertex, if the taxable amount * rate is over the tax limit of 930.60. Let's say it was calculated to 100.01, which would make ytd 930.61, then the tax would be 100 (the correct amount) (using June vertex, it would be 100.01, making the ytd tax wh .01 over the tax limit)
6. If the taxable amount * rate is less than the limit. Let's say it was calculated to 99.99, which would make ytd 930.59, then there is no tax (using June vertex in this example, the tax would be 100 (.01 more than calculated to make the ytd tax wh match the limit exactly)
7. So, July vertex fixes the issue of the tax going over the limit, but now causes a bigger issue when the tax needs to be more to reach the limit, it is 0 instead.
Applied the July Vertex monthly update
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