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canada_-_cpp_ei_ppip_exempt_setup

CPP / EI Exempt Employees

Canada Pension Plan (CPP) and Employment Insurance (EI) as configured in Windward Payroll are setup as taxes. These taxes were mandated by Canadian Revenue Agency. However, there are provisions that an employee or an employer can be exempt from these taxes.

If an employee is CPP and/or EI exempt, special subtypes and calculation types was created to cater this special functionality in calculating Canadian income taxes.

As an example, when setting an employee to be EI exempt, in the Employee Details tab of the employee setup there is a check box for EI exempt. If exempt for both CPP and EI, then both check boxes needs to be checked. However, this check boxes doesn't affect the tax calculation at all. This is just an information only and is only affecting Box 28 of the T4 Statement of Remuneration form.

cppeixbox.jpg

The factors affecting the calculation is the subtype and calculation type being used. Thus, if an employee is EI exempt, an appropriate subtype will be used in creating the income item which is Wages - EI Exempt. The same thing goes for employees who were CPP exempt. The subtype for use will be Wages-CPP Exempt and also have 2 calculation types available for the regular wage and vacation pay.

eixsubtype.jpg

After selecting the subtype, you will then need to identify which calculation type to use. Currently, we only have 2 which is for the regular wage and vacation pay.

eixcalctype.jpg

You may contact Windward Support if you need calculation types other than the Regular Wage and Vacation Pay for exempt employees

Once the income type has been added using the appropriate subtypes and calculation types, you can then add the specific income tax to be withheld from the employee.

canada_-_cpp_ei_ppip_exempt_setup.txt · Last modified: 2019/04/02 14:16 by rreyes