How to use the CRA's and Revenue Quebec's payroll tax calculators

There was a 2018 tax update patch for Quebec and Yukon payroll on March 12th, did you know? Typically though, Sage 50 Accounting's payroll tax amounts are within about $1.00 of the Canada Revenue tables. Small differences are to be expected because the manual tables and TOD (Tables on Diskette) calculate based on an income range, whereas Sage 50 Accounting uses the exact income amounts for greater accuracy (see KB 10596 (EN)/ 260-1005363 (FR) for more details).

In our blog "Find out what's new in the Sage 50 CA 2018.1 update!"  we had an important note regarding Quebec and Yukon payroll taxes not calculating properly. 

This message was primarily sent via product message which should have displayed on the screen of Sage 50 once, but then been minimized and held in the notifications envelop found on the bottom right of your Sage 50 program. To keep a copy for your records, click on the envelop to pull up the Important Sage 50 Accounting product update published March 12.

The patch is included in the cumulative update for Sage 50 2018.2 released just after March 26. If even after this update, Sage 50CA is not behaving correctly, try to reinstall the full product using this link for Sage 50 2018.2. 

Now, I bet you have questions like: How can you check what the tax amount should have been? And how do you fix it? Below we'll cover this and also look at how to use the CRA and Revenue Quebec online payroll tax calculators to double check the tax amounts so that you know what missing amount to pay. The awkward news is that if you're late getting this update, then you've probably already processed and paid out less that what should have been paying out. This only affected the Impôt Quebec tax. 

How much was the tax amount off by?

STEP 1: Check basic personal amounts by looking at the taxes tab of an employee's profile.

  • Use KB 88075 for the Federal ($11,809.00 for 2018) and provincial amount (screenshot below is for British Columbia). Please refer to the CRA web site (http://www.cra-arc.gc.ca) for any changes to these amounts.

 

If you notice a variance regarding what the amounts should be or just want to ensure that they are updated, go to the Sage 50  Maintenance menu and select Update Employee Claims…

On the pop up window, notice the top left radio buttons, follow the instructions on KB 12266 on How to update employee personal tax credits claims amounts.

 STEP 2: While on the employee's profile, also check pay periods

 

How to use the CRA Payroll Deductions Online Calculator

The following compares taxes before and after using the CRA site Payroll Deductions Online Calculator (both the CRA and the Revenue Quebec sites should be used to acquire the needed tax deduction amounts for those with Quebec payroll). 

Go to the CRA website and accept the conditions for using the Payroll Deductions Online Calculator (Language options are in the top right). There are 3 main steps: 

STEP 1: Start by selecting the right province, pay period and date of payment.

STEP 2: For the second step, this example enters before tax income of $1900 for the period. Check the rest of the page and check boxes for anything that applies to you. At the bottom click "Continue" ("Suivant" in FR)

  • Note: Only enter vacation pay for paid out vacation, not the amount accrued 

STEP 3: Review the CRA's calculator's step 3 options and click "Calculate" ("Calculer" in FR).

Review

If correct, then the amounts for EI (AE in French) should match in Sage 50 CA and on the CRA website. The below example doesn't.

 

So what now? You can enter the payroll taxes manually into Sage 50 so that they match CRA, see KB 12259 for steps. In this example, we would adjust Sage 50's ($35.72) amount to match CRA ($31.54). You'll want to keep track of the originally paid out amounts vs the adjusted amounts however for year-end payroll remittance and adjustment of payment to CRA. Talk to your accountant for more details. More on this below the section on Revenue Quebec. 

Revenue Quebec's WinRAS - Calculation of Source Deductions and Employer Contributions

The Revenue Quebec site (FR), has an app that you must download.

  • Note: EI or AE in French aren't on the WinRAS report, but you'll have RRQ and RQAP

 

STEP 1: Select the tax year needed. This example uses 2018. After downloading, open the 3.4MB application to run the installation wizard.

STEP 2: Install and open the  WinRAS app

STEP 3:  Go to File ("Fichier" in FR) >  New Worksheet ("Créer une nouvelle fiche de calcul" in FR) > Salaried employee ("Employé à salaire" in FR)

  • Note: language options are available in the top right corner

On the main screen, select the dropdown for the section "Nombre de périodes de paie dans l'année" (number of pay periods in a year), this example selected 52 pay periods. Then select the "Periode de paie courante" (any pay period selection will work) for this example we selected the 4th one to go with Feb 12, 2018. 

Last main item is to enter the gross pay (salaire brut in FR) from the paycheck.

Here's the example paycheque entry from Sage 50 showing Income of $3600 for the period.

 

STEP 5: Once all the WinRAS fields have been reviewed and entered, click on "Calculate" ("Calculer" in French). You'll see amounts for Impôt Quebec, RRQ, RQAP, just not AE (use CRA's site for that). 

*Notice that the Impôt Quebec amount is wrong in Sage 50. This was the tax affected by the 2018.1 update. It was fixed by a patch released March 12, 2018.

 

Still need help?

Our Sage 50 CA support team is available by chat or by phone at 1-888-522-2722. We also have Sage Accountant's Network partners who can assist clients using their special Accountant's Edition of Sage 50 with special access. Find a certified partner using the Sage Match site: https://app.sagematch.com/ 

Other resources:

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