Taxable Employer Match for Percentage Employee Contributions Incorrect for Savings Plans (Canadian) when Earnings on Same Paycheck Are Taxed Using Different Tax Methods (Doc ID 1676516.1)

Last updated on NOVEMBER 09, 2023

Applies to:

Symptoms

Savings plan contributions are based on a special accumulator that includes earnings taxed using different Canadian tax methods - annualized, bonus and commission. When a check has earnings taxed on more than one basis, the employer match does not calculate correctly when the employer match has a Tax Class of Taxable and the employee contribution is stated on a percentage basis; if the employer match Tax Class is Nontaxable Btax or Nontaxable, it calculates correctly. Regardless of the Tax Class used for the employer match, the employee contributions are calculating correctly.

STEPS
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1. Configure new earnings which use special tax methods for Canadian taxes (Bonus, Commission) (Navigation: Set Up HRMS > Product Related > Payroll for North America > Compensation and Earnings > Earnings Table).
2. Add the new earnings to the Canadian Earnings Program (Navigation: Set Up HRMS > Product Related > Payroll for North America > Compensation and Earnings > Earnings Program Table).
3. Add 2 new Savings Plans to at least 2 different Plan Types on the Benefit Plan Table (Navigation: Set Up HRMS > Product Related > Base Benefits > Plans and Providers > Benefit Plan Table).
4. Configure the new Savings Plans within each Plan Type to be identical (Navigation: Set Up HRMS > Product Related > Base Benefits > Plan Attributes > Savings Plan Table).
5. Set up Deduction Codes for the plans, one using a Tax Class of Taxable for the employer match and the other using either Nontaxable Btax or Nontaxable, as appropriate, for the plans within each Plan Type (Navigation: Set Up HRMS > Product Related > Base Benefits > Payroll for North America > Deductions > Deduction Table).
6. Set up the plans on the Benefit Program Table (Navigation: Set Up HRMS > Product Related > Base Benefits > Program Structure > Benefit Program Table).
7. Enroll sample employees in multiple savings plans, using either the plans with the Taxable match or the plans with the Nontaxable Btax/Nontaxable match. (Navigation: Benefits > Enroll in Benefits > Savings Plans).
8. Create paysheets for a payroll (Navigation: Payroll for North America > Payroll Processing CAN > Create and Load Paysheets > Create Paysheets).
9. Calculate the paychecks with only the normal earnings (annualized tax method) for each employee (Navigation: Payroll for North America > Payroll Processing CAN > Produce Payroll > Calculate Payroll).
10. Enter either a bonus amount or a commission amount on each of the sample employee’s paysheets (Navigation: Payroll for North America > Payroll Processing CAN > Update Paysheets > By Payline).
11. Recalculate the paychecks (Navigation: Payroll for North America > Payroll Processing CAN > Produce Payroll > Calculate Payroll).

Cause

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