Retirement Allowance and Severance Pay payroll instructions
Canada Revenue Agency (CRA) and Revenu Québec (RQ) regulations state that severance pay and retiring allowances must use the non-periodic lump sum method to calculate tax.
A new payroll instruction, Severance Pay, is added to Rise payroll instruction library which uses the lump sum tax method. The two existing payroll instructions, Retirement Allowance (Eligible) and Retirement (Non-Eligible), are updated to use the lump sum method calculation.
Severance Pay
1. In Rise, navigate to Payroll and click the Payroll tab. To view and manage your payroll setup, click Payroll Setup.
2. To review severance pay, click the Payroll Instructions tab and then click Add Payroll Instruction from Provider Library.
3. Click on the dropdown next to Payroll Instruction. Here you’ll see a new payroll instruction, Severance Pay, added to the provider library.
4. Click Severance Pay to review the payroll instruction. For more information on how to add a provider level payroll instruction, refer to our How to add payroll instructions article.
Severance Pay uses the lump sum method to calculate tax. For more information, refer to our How to use the Lump Sum Tax Method calculation article.
Retirement Allowance
1. Click the Payroll Instructions tab and navigate to the payroll instructions list. Scroll to find Retiring Allowance (Eligible) and click View Details.
2. Within the payroll instruction, click the Details tab and scroll down to Instruction Behaviour. Here you’ll see Retirement Allowance (Eligible) uses the lump sum method to calculate tax. It’s marked as Federal and Provincial Taxable, and Quebec Provincial Taxable.
3. Click the Accrual Instructions tab to review the required additional accrual policies.
4. Retirement Allowance (Non-Eligible) also uses the lump sum method to calculate tax. Navigate to the Payroll Instructions tab and scroll to find Retirement Allowance (Non-Eligible) in the list. Here, click View Details to review Retirement Allowance (Non-Eligible).
Related Articles
How to add payroll instructions
Adding a provider level payroll instruction 1. Select Payroll from the side menu, and click on Payroll Setup. 2. Choose the button Add Payroll Instruction from Provider Library. 3. Select the payroll instruction you need from the list available in ...How do I organize my payroll instructions?
Assigning a sort order to payroll instructions The system allows for the assignment of a "sort order" for each payroll instruction. Earnings, Benefits, and Deductions will always stay within their respective categories, but within each category, the ...How to manage payroll specifications for an employee
If a payroll instruction exists for your company as a whole, it is set up in one of two ways; applicable to all employees, or applicable to only those it is added to. If set up as applicable to all employees, the payroll instruction will appear as a ...How to create an ad-hoc pay run
1. In the Payroll menu on the left-hand side, click Payroll. 2. Click Process Payroll / Review Payroll History. 3. Click Create Ad-Hoc Payroll. ...How to create a deduction pay code
1. Open Payroll, click Payroll, and then click Payroll Setup. 2. In the Payroll Instructions tab, click on Add New Deduction. Options within the setup screen 1. The first section is titled Details. You will need to enter both the English and French ...