What is the system default?
Without any adjustments made, the system will assume all of your employees are claiming the Basic Personal Amount for their region for this year at a federal and provincial level. This is typically the correct setup, but if an employee returns a TD1 form or a F1 form with other specifications, you will need to adjust their settings. Below we've outlined how to set up the various unique tax situations you may come across.
My employee has non-standard claims
Whether your employee is claiming more than the basic personal amount, or not claiming any amount at all, our system can ensure correct taxation.
- Navigate to the employee's profile and select the "Tax" tab.
- If this is the first time you've updated their tax, click "Add Personal Federal Tax Configuration". If there is a pre-existing profile, click "Edit".
- Make the changes required to update employee tax configuration. The images show Federal Tax Configuration, but the same actions apply to region updates as well.
- No Claims: If the employee is not claiming the basic personal amount, unselect the box titled "Employee is claiming the personal tax credit". The Basic Personal Amount will display N/A.
- Additional Claims: If the employee has additional tax claims, enter just the additional amount into "Sum of Additional Claims". The total including the basic personal amount will display directly underneath for verification.
- Deduction for prescribed zone: For more information on this entry, see the CRA publication T4039 "Northern Residents Deduction - Places in Prescribed Zones". To enter a deduction, simply put the annual amount into this box.
- Additional tax to be deducted: If the employee has requested you deduct additional taxes off their paycheque, enter the value here that should be deducted each paycheque.
- T1213 (F1) Amount: If your employee has a F1 form with a T1213 amount, enter the value here.
- Click "Save" at the bottom of the page, and make sure you also update the regional tax claims if required.
If an employee has a source deduction exemption, simply check the appropriate checkbox. These options are available on the employee's profile under the "Tax" tab (same as above). Note that the system will automatically exempt all employees under 18 years of age from CPP deductions. Similarly, employee's over the age of 70 will be automatically exempted from CPP.
RP account and T4 status settings
If your company has multiple RP accounts with the CRA, you can specify which RP account this employee is working under on the employee's profile under the "Tax" tab (same as above). There will be a drop down box with all RP account numbers set up for your company.
Similarly, if you have contractors in your system who will be receiving a T4A instead of a T4, it is important to set up those year end settings prior to paying the contractor. Simply switch over to a T4A status and earnings will be noted appropriately for year end.