Perhaps this is silly, but here goes... I have an employee with regular pay periods and Sage 50 is taking the correct amount of CPP off, fully considering the $3,500 basic exemption. If I pay out an additional amount to this employee and do it through the payroll module, it is not taking enough CPP off. I believe it is allowing a second basic exemption. How can I correct this without doing a manual adjustment every time this occurs? I am stumped!
When Sage 50 does payroll it asks how many payperiod there will be in one year. Bi-weekly is 26 payperiods, seei-monthly is 24 payperiods etc.
Once Sage 50 knows the method of payment then it divides the 3500.00 basic CPP exemption by the number of payperiods and that amount is what gets deducted off each paycheque as part of the basic exemption.
If you are paying out additional amount to employee that is not a regular payroll then it should be done thru advances or thru loans. Advances does adjust for the fact that it is not a regular payroll so it will deduct the CPP without taking the basic exemption into consideration.
If you do - for example - a vac pay or a bonus paychq as a regular paychq instead of a advance or loan and this is done in between regular payroll then it becomes an additional payperiod so now for a bi-weekly payroll you will now show 27 payperiods instead of 26 - all which has the 3500.00 divided by 26 = 134.62 deducted from gross before calculating the CPP.
This also causes your ROE to be out of balance as well since it will count the vac pay as part of the payperiods.
Does this help?
that makes so much sense!! so when employees want vacation pay on a separate cheque how do you avoid that?