Year End Payroll Reports Manual

Transcription

1 Year End Payroll Reports Manual ADP Canada offers generic Year-end Reports to assist you with Year-end Reporting. The purpose and advantages of these reports are explained in this manual..

2 This guide is also available in French upon request. Ce guide est disponible en français sur demande. This information contained in this guide was created for instruction and reference purposes. The information contained herein constitutes proprietary and confidential information of ADP Canada. It must not be copied, transmitted or distributed in any form by any means, electronic, mechanical, or other, including photocopy, recording, or any information storage and retrieval system, without the express written permission of ADP Canada. All rights reserved. ADP Canada is not responsible for any technical inaccuracies or typographical errors that may be contained in this publication. Changes are periodically made to the information herein, and such changes will be incorporated in new editions of this publication. ADP Canada may make improvements and/or changes in the product and/or the programs described in this publication at anytime without notice. Should inconsistencies or concerns regarding the content be found, please forward comments to your ADP Canada Client Services Group. "When your people are counting on you, count on us." is a service mark of ADP Canada Co. ADP is a registered trademark of ADP Inc.

3 The available reports include: Last and First Payroll Runs of Current and New Year Workers Compensation Reports (optional) PIER Audits Government Calculations ADP Canada GPP/EI and QPIP Reconciliation Reports (optional) Tax Form Check Pens/DPSP Members Report (optional) ADP is committed to providing unparalleled support for your Yearend processing and reporting needs.

4 Table of Contents Last and First Payroll Runs of Current and New Year... 1 Workers' Compensation Report... 1 PIER Audits... 1 ADP Canada s GPP/EI Verification Report... 3 Tax Form Check Pens/DPSP Members... 5 New Calendar Year (NCYR)... 5 NCYR Actions... 6 Fields not impacted by NCYR:... 8 NCYR, NCMO & Labour Cost... 8 Year-end Adjustment Run... 9 General Information... 9 Transaction Codes at Year-end Validating your Year-end Adjustments Tax Form Production Request Form About Pensions Special note for Clients with limited tax break RRSPs Tax Form Balancing & Production Tax Form Trial Run Tax Form Copies Tax Form Reporting On Electronic Filing... 21

5 Last and First Payroll Runs of Current and New Year This bulletin is an advice of the scheduled dates for payroll productions for your LAST payroll run in the current year and your FIRST payroll run in the new year. It is included with your Year-end package forwarded to you in the Fall of each year. Please check these dates carefully. It is important that you advise us before December of any changes to these dates, or of any requests for Bonus, Special or Additional payroll productions. This will ensure a smooth transition into the new year and avoid scheduling problems during the holiday season. Workers' Compensation Report Purpose Displays WCB annual assessable earnings per employee by province and department. Charges Optional Report charges apply as per your service agreement. Who Needs the Report Companies who file to the respective provincial WCB offices. How to Request If you require this report and you have not pre-arranged for its production, please contact your ADP Canada Client Services Group. Five business days advance notice is required. About the Report The report is sorted in order of Province, Branch, Department, Status and Employee Number. This is a generic report that will not identify when an employee is listed more than once (two identification numbers resulting from an inter-provincial transfer or a change of BN). Deadline for Filing WCB/WSIB/CSST filing deadlines are different for each province. Check with your local WCB office to confirm dates. PIER Audits Canada Revenue Agency (CRA) does an audit of the employee's pensionable and insurable earnings based on the Tax Form information they have received. This identifies any calculated deficiencies in the CPP and/or EI deducted for the employee. If deficiencies are detected (premiums deducted are less that the required calculation), Canada Revenue Agency (CRA) will issue a P.I.E.R. report (Pensionable/Insurable Earnings Review) to the employer. Unless the employer can explain the deficiencies, Canada Revenue Agency (CRA) will expect the employer to remit both the employee and employer's portion of the deficiency. Ministère du Revenu du Québec (MRQ) performs a similar audit for QPP and Provincial Parental Insurance Plan premiums following the filing of Relevé1 Forms. Page 1

6 Government Calculations CPP Deficiencies CPP deficiencies are identified by the following calculation: T4 Pensionable Earnings - CPP Basic Annual Exemption X CPP Rate for Year = CPP Contributions If Box 26 (CPP/QPP Pensionable Earnings) is blank, use the Employment income from Box 14 up to the annual maximum Pensionable Earnings. Employees who have been exempt from contributing to CPP/QPP for the entire year will display the value X in Box 28. Please Note: Employees who are exempt from contributing for the entire year should not have an amount reported in Box 26. If this occurs, contact your ADP Client Services group to correct it. For Québec employees, refer to the Relevé 1 QPP pensionable earnings (Box G) or Québec Employment Income (Box A) instead for the above calculation. EI Deficiencies EI deficiencies are identified by the following calculation: T4 Insurable Earnings x EI Premium Rate for Year = EI Premiums If Box 24 (EI Insurable Earnings) is blank, the Employment income from Box 14 is used up to the annual maximum insurable earnings. Employees who have been exempt from contributing to EI for the entire year will display the value X in Box 28. Please Note: Employees who are exempt from contributing for the entire year should not have an amount reported in Box 24. If this occurs, contact your ADP Client Services group to correct it. PPIP/QPIP Deficiencies PPIP/QPIP deficiencies are identified by the following calculation: For Quebec employees, use Releve 1 Boxes H and I to balance QPIP: Rel 1 Box I QPIP Insurable Earnings x QPIP Premium Rate for Year = QPIP Premiums T4 PPIP/QPIP reporting: Page 2

7 If Box 56 (PPIP Insurable Earnings) is blank, the Employment income from Box 14 is used up to the annual maximum PPIP insurable earnings. Employees who have been exempt from contributing to PPIP for the entire year will display the value X in Box 28. Please Note: Employees who are exempt from contributing for the entire year should not have an amount reported in Box 56. If this occurs, contact your ADP Client Services group to correct it. ADP Canada s GPP/EI Verification Report ADP Canada has incorporated Canada Revenue Agency s & MRQ s PIER calculation into an Optional Report. This report will display the calculated amounts compared to the actual deductions for CPP/QPP and EI. Only employees who have a CPP, QPP or EI difference will print on the report. The report will also display new or terminated employees. Employees hired or terminated during the year will be flagged and their difference columns will be left blank (refer to Special Notes below). To eliminate the need for filing amended slips for employees with incorrect deductions, all investigation of possible differences should take place prior to the production of Tax Forms. Purpose Identifies possible CPP/QPP or EI deficiencies prior to Tax Form production. Charges Optional Report charges apply as per your service agreement. How to Request If you require this report during the year, with your final payroll run of the current year, or with your Year-end adjustment run and you have not pre-arranged for its production, please contact your ADP Client Services group. About The Report Employees who have been set up with more than one identification number throughout the year will be shown separately under each file number. Ensure you total the figures to verify if a deficiency actually exists. Amounts reported are based on annual values and calculations for CPP/QPP and EI. Common Causes of Differences: During the year, the employee received more pay period exemptions that were available for the year. Pay period exemptions should only be included on a separate payment if the payment represents a missed pay period. Page 3

8 Please Note: Separate Payments (Transaction Code 52) offers a Pay Period Exemption, whereas a Bonus Payment (Transaction Code 91) does not have this possibility, so CPP/QPP is calculated on the entire payment.) If the number of pays for the year should have been 27 or 53 and your payroll frequency on your payroll set-up was not changed at the beginning of the year, there may be a CPP/QPP deficiency due to the provision of an extra regular pay period exemption. This will only affect employees who have not paid the maximum GPP deduction for the year. A manual cheque was updated but the CPP or QPP was incorrectly calculated. Pensionable or insurable earnings were updated after the end of the year (for example taxable benefits updated on your Year-end Adjustment Run) without the corresponding required deduction. Special Notes: The calculation of CPP/QPP displayed on the report may not be accurate for the following employees as the calculation assumes the employee was employed and eligible to contribute for the entire year: An employee who turned 18 or 70 this year (18 for Québec employees). A new employee hired during the year. An employee who terminated during the year. Casual or Part Time employees who earn less than the CPP/QPP pay period exemption in a given pay. Some of these employees will be highlighted on the report with a New Employee, Term Employee or Age Exempt message. A manual calculation should be done to determine the accuracy of their Year-to-date deductions. Calculations should only consider contributions made with your company. Employees who have contributed premiums during the year with other employers will be refunded any overpayment of premiums when they file their personal tax return at year-end. ADP Canada s QPIP verification Report ADP also provides an Optional Report that compares QPIP employee and employer s calculated amounts to their actual contributions. If employees have more than one identification (tax form), a message to this effect will be displayed under each additional ID, for you to know. Please contact your ADP Client Services group if you wish to receive this optional report. Page 4

9 Tax Form Check Pens/DPSP Members Purpose: Displays important data from the employee files that impact the information that will print in Registered Pension or DPSP related boxes on the T4. This allows you to validate the information that will print as Registered Pension Contributions, Pension/DPSP Registration Number and Pension Adjustment. Charges Optional Report charges apply as per your service agreement. Who Needs the Report Employers with Registered Pension plans or Deferred Profit Sharing Plans (DPSP). How to Request If you require this report on paper and you have not pre-arranged for its production, please contact your ADP Canada Client Services Group. The report is also available as a payroll edit report (Custom Report remote request). We suggest that you request it the day following the Year-end Adjustment Run after you have updated any adjustments or changes to employees (for instance the employee s Pension Adjustments) to assist with your final validation prior to tax form production. About the Report The report is sorted by Employee name, within contributor versus non-contributor (ERPC), within Pension Type (ERPT). Totals are provided after each pension type. New Calendar Year (NCYR) Each year, the ADP Canada system performs several automatic tasks that are designed to move your payroll from one year to the next efficiently. This process is referred to as NCYR (New Calendar Year). The following information provides you with an explanation of the process, what fields are impacted and also provides additional special notes for your consideration. The action of moving your payroll into the new year (referred to as NCYR) will automatically be processed with your first payroll with a pay date in the New Year. For those clients who have not already processed their first payroll of the new year by the second last business day of the calendar year, a special production is run to trigger that NCYR process. That special production is referred to as MASS NCYR. When NCYR is processed, your year-to-date accumulations are set aside in a Stored Payroll masterfile in order to produce your year-end tax forms. By the end of the second last business day of the calendar year, all ADP Canada payroll clients will have their current year s payroll stored for tax form production purposes. In addition to storing the tax form totals, NCYR also triggers several other actions to prepare the payroll masterfile for the new year s accumulations and calculations. Page 5

10 It is important that you check the accuracy of the payroll production dates shown on the Last and First Payroll Runs of Current and New Year Bulletin we forward to you in the Fall. We will use these dates to schedule entries that may need to be submitted with your last or first payroll of the year. Regardless of the dates on this report, the system will use the pay date submitted with your payroll production to determine whether NCYR should be processed (1 st pay date in the new year). Topics include: NCYR Actions Fields not impacted by NCYR NCYR, NCMO & Labour Cost NCYR Actions NCYR performs several actions and tasks including: 1. Creates Two Separate Master Files of Your Payroll on the ADP Canada System. The current year's Master File containing Year-to-date information becomes the Stored Master File. This file is used for Year-end Adjustment Runs and Tax Form production. It is not used for the new year's payroll entries. The new year Master File is called the Current Master File. This is the file used for the new year payroll entries. It is not used for Year-end Adjustment Runs or Tax Form productions. 2. Resets the Following Fields to Zero on the Current Master File: Year-to-date fields for units, earnings and deductions. Year-to-date gross and Year-to-date net pay. Year-to-date employer portions of CPP, QPP, EI and PPIP. Year-to-date employer contributions to Québec HSF, Ontario EHT, MB HET and NL HAPSET. CPP/QPP Paid Elsewhere (GPPE). CPP/QPP Pensionable amounts Earned Elsewhere (PEEE) EI Paid Elsewhere (DB03). PPIP employee premiums Paid Elsewhere (QPIE) PPIP employer premiums Paid Elsewhere (QPPE) PPIP earnings earned elsewhere (QEEE) Federal Deduction District Taxation (FDDT). Federal Tax Credit Other (FTXC). Federal Labour Sponsored Funds Tax Credit (ELCF). Provincial Labour Sponsored Funds Tax Credit (ELCP). Québec Labour Sponsored Funds Tax Credit (ELCQ/FCSN). Other Québec Annual Tax Deductions (DD05). Provincial Tax Credit Other (DN05). Employee Next Year's Pension Adjustment (ENPA). Company Portion of Pension Adjustment (DA06). Page 6

11 Non-Resident s exemption amount to be used for Lump Sum payments (NRXL) Non-Resident s exemption amount to be used for regular payments (NRXP). WCB accumulations (WCEY, WCPY) T4A Other Information code (2P39): value in chained mnemonic clears Please Note: If the Québec Labour Sponsored Funds Fields(ELCQ/FCSN) contains an asterisk reference, it will not be reset to zero. 3. Other tasks initiated by NCYR: Copies previous year terminated employees onto the Current Master File. This is an important consideration if you are rehiring an employee in the new year. Please note: Employees who had their old File Number terminated as a result of a 40KEEP transaction (separate Tax Forms) will not be copied into the new Current Masterfile. Their terminated Payroll File Numbers will be dropped during the NCYR process. Drops all terminated employees from two years previous. Please Note: For PaySpecialist Users: When purging terminated employees from your PC database, the previous year s terminated employees should not be removed. This will keep your PaySpecialist database synchronized with our system. Updates the Federal Tax Credit (DB04) with the new year's equivalent for the six standard values. For non-quebec employees, updates the Provincial Tax Credit (DB05) with the new year's six standard values set by each province. Employees having non-standard values must be updated manually. For Quebec employees, the Provincial Tax Credit field is incremented by the established CPI factor as per MRQ guidelines. Updates the annual maximum for CPP/QPP, EI and PPIP contributions and applies new rates, if applicable. Creates new Start/Stop month values for the automatic activation/deactivation of CPP/QPP deductions, based on the employee s birth date (BRTH). Transfers Year-to-date gross earnings (YGRS) plus year-to-date taxable benefits (TY05) into previous year's gross earnings (PGRS). Transfers Year-to-date Pensionable Earnings (TY10) into Previous Year's Pensionable Earnings (PY10). Annual Maximum Assessable Earnings for Worker s Compensation (WCAM) is populated with each province s maximum amount. The regular payroll run counter (CPER) displayed on the upper left of your PAYROLL REGISTER is reset to either 00 (for SPEC runs) or 01 (for regular payroll productions). The tax year indicator field (2TXY) on your system is incremented to the new year s value to ensure the appropriate tax tables are accessed. Page 7

12 Fields not impacted by NCYR: Additional Federal tax Deduction Additional Quebec Provincial Tax Deduction Total Deduction Arrears Federal Income Tax Prescribed Area Exemption DA04 DA05 DC01 DD04 Federal Income Tax - Fixed Tax Credits DN04 Estimated Annual Expenses For Commissioned Employees (Federal) Estimated Annual Remuneration For Commissioned Employees (Québec) Estimated Annual Expenses For Commissioned Employees (Québec) Previous Year s Non-Employment Income (Income Earned Outside Payroll) Québec Tax Credit non-indexed amount TD1X TP1R TP1X PYNE NPTC Labour Cost Reporting Fields Year-to-Date Fields You Have Asked Us Not To Clear (i.e., fields you track on a fiscal cycle/accrual fields) EHT Exemption Manitoba HAPSET exemption Newfoundland & Labrador HAPSET exemption EI Reduced rate CRTE 1OX1-9 1MHX 1NLX (CEI2-9) NCYR, NCMO & Labour Cost If you utilize the New Calendar Month (NCMO) feature to reset specified accumulations for reports, you still need to submit the NCMO entry as the NCYR function does not affect this feature. If you utilize the Labour Cost sub-system, you will still need to do your normal entries to reset accumulations for the appropriate Labour Cost Accounting period(s) as the NCYR function does not affect this feature. The Labour Cost Start New Accounting Period selection will be either a New Fiscal Year (LNFY) or a New Fiscal Accounting Period (LNF1, LNF2, or LNF3). When submitting the entry to reset the New Fiscal Year (LNFY), entries are not required to reset the New Fiscal Accounting Periods. If submitted in error, their values will be ignored and the following error message will be displayed: Page 8

13 Clients using the Transaction Proof Report: ***LNF_ Trans Rejected LNFY Present Clients using the Payroll Entries Report: New Fiscal Accounting Period Transaction Rejected, New Fiscal Year Present Client using the application: As soon as the Start New Accounting Period > Annual Accum box is selected, all other Accounting period accumulations selection boxes are disabled (greyed out) preventing dual entries that would otherwise cause the above error messages to appear. Year-end Adjustment Run Daily Year-end Adjustment Runs are available during January and February allowing you access to the stored payroll masterfile. You can make correcting entries, if any, in these runs prior to having your tax forms produced by ADP Canada. Refer to your Year-end Response Guide for the applicable range of dates for the upcoming year-end period. Since Year-end Adjustment Runs are processed after the December deadline for statutory/government remittances, it is your responsibility to remit any monies resulting from year-end adjustments according to your normal remittance deadlines to avoid any penalty assessment. Review any pending Year-end Adjustment Run entries that affect statutory remittances accordingly. Adjustments to Statutory Remittances that ADP will not remit on your behalf are displayed on your DAILY UPDATE REPORT in the column YTD ADJUST. Make note of the published input deadline for Year-end Adjustment Runs. Because of heavy volumes of processing at this time, there can be NO extension of this specified deadline. When selecting your Tax Form production date, please ensure that it is scheduled to take place following your last Year-end Adjustment Run. Year-end Adjustments should be processed at least 4 days in advance of the Tax Forms production to allow you time to verify the results. Topics include: General Information Transaction Codes at Year-end Validating your Year-end Adjustments Tax Form Production Request Form About Pensions Special note for Clients with limited tax break RRSPs General Information Do You Require a Year-end Adjustment Run? You Will Require a Year-end Adjustment Run if: Page 9

14 Your company has a Registered Pension Plan and Pension Adjustment (PA) figures are unavailable prior to Yearend. NOTE: employers with Defined Benefit Pension Plans must submit employee Pension Adjustment amounts on a Year-end Adjustment Run. Entries submitted to the Pension Adjustment field (EPAD) during the year will not be reported on the tax form. You have outstanding adjustments that will alter tax form amounts (e.g. manual payments issued to an employee that have not been entered on the payroll system or corrections due to errors on the last pay of the year). Final adjustments to taxable benefits amounts (e.g. taxable car benefits, security options benefits etc). Employee / Employer information fields that need to be changed or added. What is a Year-end Adjustment or Change? A Year-end Adjustment consists of adding or subtracting amounts to or from the employee s year-to-date earnings or deduction totals. Year-end adjustments are NOT replacement values. Changes can also be submitted to employee level fields (changes to Employee Options). A change to the employee s Pension Adjustment field (EPAD) is an example. Transaction Codes at Year-end Transaction codes define a specific operation that the system uses when processing a payroll. These codes determine the type and processing sequence of the information being processed. With a Year-end Adjustment Run there are restrictions on the available transaction codes. Following is a list of these codes: Transaction Codes Allowed on Year-end Adjustment Runs 60 Company Pay Period Initiation (provides Pay Period end date & Pay Date) 30 Add New Employee 40 Transfer: 40 TRAN - 40 KEEP 41 Mass Change - Replace value in employee field 43 Mass Change - Increment value in employee field 47 Change Employee Status - Before Pay 49 Change Employee Record field 53 Year-To-Date Adjustments (Non-remit) Page 10

15 72 Change Employee Record field 73 Incremental Employee field change 95 Change Employee Status - After Pay Transaction Codes Not Permitted on Year-end Adjustment Runs 50, 54, 55 Year-To-Date Adjustments; if submitted, the system will process as Transaction Code 53 (Non-remitting Year-to- Date Adjustments) 52, 56, 80, 82, 85, 88, 91 Financial Transactions that would normally produce payments. Year-end Adjustments using your payroll application Detailed instructions regarding Year-end adjustments for your payroll solution can be found at adp.ca/ye. Simply select the appropriate guide for your ADP solution: PaySpecialist Year-end Guide Pay@work Year-end Guide For Telephone Payroll, please refer to the Year-end Procedures Guide Validating your Year-end Adjustments ADP Canada produces a test run of tax forms with your final pay of the year using the data on file as of that pay period. More information is available in the section called Tax Form Balancing on using these reports to ensure that all data is reported properly and all required fields have already been populated. Should you have additional adjustments or changes to add, submit the required entries to the Year-end Adjustment Runs available in January and February to modify the employee s stored data. Output from a Year-end Adjustment Run consists of your standard payroll reports except for the following items: Cheques/Deposit Notifications Custom Reports Record of Employment (ROEs) Labour Cost Reports Information & reports List of Employees/Job Tickets Report on Hiring Reports will be uploaded to the Internet (ROI) to the folder called YE Adjustment Runs and/or produced on paper in much the same way your regular payroll reports are produced. Page 11

16 Optional and Tailored reports can be scheduled to run with each Year-end Adjustment Run if required. Please use the Yearend Adjustment Runs and Tax Form Production Bulletin or call your ADP Canada Client Services Group if you need to request an Optional and /or Tailored report against your Year-end Payroll Masterfile. Please review the output from the year-end runs upon receipt and advise ADP if you need to reschedule your Tax Form production to allow sufficient time to submit additional year-end adjustments. Tax Form Production Request Form Tax Form Production Request Form can now be found in the YE Response Guide, provided every year, in the fall.*.it is used to pre-schedule your chosen tax form production run. If you do not complete and return this form, your Tax Forms will be produced on the default date provided in your current Year-end Procedures Guide. *Year-end information and forms are now available online at adp.ca/ye About Pensions Pension Adjustment (PA) A Pension Adjustment (PA) is defined as the deemed value of an employee's Pension Benefits that have accrued in the year within a Registered Pension Plan and/or Deferred Profit Sharing Plan provided by an employer. If your company has a Registered Pension Plan or Deferred Profit Sharing Plan, you are required to report the PA on the employee s tax form. CRA uses the PA value in determining the tax payer s UNUSED RRSP CONTRIBUTION ROOM for the following year. Non-contributory members of a pension plan must also have the non-contributory indicator set up in the field called Employee Pension Participation (ERPC) to ensure other required fields are displayed. Calculating the Pension Adjustment (PA) The method used for determining the Pension Adjustment is dependant on the type of pension plan the employee is a member of. ADP Canada uses the value in each employee s field called RCP Type (ERPT) to define the appropriate PA calculation method. Pension Plan Types (ERPT) The EMPLOYEE STATUS REPORT will display the Pension Plan Type indicator value as RCP TYPE. Defined Benefit Plan (ERPT = 1) The Defined Benefit Plan promises a certain level of pension usually based on earnings and length of service. Pension Adjustment (PA) amounts must be submitted on a Year-end Adjustment Run (49EPAD). Any entries submitted to this field during the year will not be displayed on the employee s tax form. Defined Contribution Plan (DCP)/Money Purchase Plan (ERPT = 2) The Defined Contribution Plan provides a pension based on the value on retirement of the contributions plus interest earned. ADP Canada can calculate the employee s PA automatically for you (provide specifications to your ADP Canada Client Services Group) Page 12

17 Deferred Profit Sharing Plan/DPSP (ERPT= 3) The Deferred Profit Sharing Plan is funded by the employer based on annual profits earned with minimum contributions required. ADP Canada can calculate the employee s PA automatically for you (provide specifications to your ADP Canada Client Services Group) Pension Adjustment (PA) calculations for DCP or DPSP (ERPT=2or3): Pension Adjustment (PA) amounts can be provided in one of three ways: 1. Option 1: Based on your instructions, we can calculate the value during the year. The fields Employee s Next Year s PA (ENPA) and Company Contributions (DA06) are available for this purpose. At Year-end, the value in the ENPA field together with any amount accumulated in the Company portion (DA06) will be automatically reported as the Pension Adjustment (PA) amount. Please contact your ADP Client Services Group if you wish to have this programmed for you. 2. Option 2: Alternatively (if no value is found in ENPA), the system will report the total employee contributions (YD02) plus the total employer contributions (DA06) as the employee s PA. Please contact your ADP Client Services Group if you wish to have this programmed for you. 3. Option 3: Advising the employee s Pension Adjustment (PA) by submitting an entry to the Pension Adjustment field (EPAD) in a Year-end Adjustment Run will over-ride either Option 1 or Option 2. Submitting the entry on the Yearend Adjustment Run sets an over-ride flag, allowing the system to recognize which value to print. Please Note: If you have a Registered Pension Plan and do not know what type of plan it is, check with your Pension Plan Administrator or Actuary Registered Company Pension (RCP) Plan Number The Registered Company Plan Number must be printed on the Tax Form for any member of a pension plan (Contributory or Non-Contributory). If your company has only one Pension Registration Number common to all pension members, provide this number to your ADP Client Services Group. This number will be stored on your company set up and printed for all members. If your company has multiple Pension Plans, the RCP Plan Number must be stored in each employee s file in the field called Registered Pension Plan Number (ERPN). For those employees, the EMPLOYEE STATUS REPORT will display the employee s plan number value as RCP Plan Number. Members of a Deferred Profit Sharing Plan should have that registration number stored in the field called Deferred Profit Sharing Plan Number (DPSP). For those employees, the EMPLOYEE STATUS REPORT will display the employee s plan number value as DPSP Plan Number. If the employee is a member of both a Registered Pension Plan (RCP) and a Deferred Profit Sharing Plan (DPSP), the RCP Plan number should print in the Pension Plan Registration Number box on the tax form and the miscellaneous footnote should be used to update the DPSP registration number. Call your ADP Client Services Group to have the required programming set up. Employee Participation Indicator (ERPC) This field identifies whether the employee is a contributing or non-contributing member of a Registered Pension Plan. Use this field to identify non-contributory members of a pension plan for purposes of printing the Pension Adjustment and the Pension Registration Number on the employee s tax form. Page 13

18 ERPC (blank) Contributory or non-member (default value) ERPC 1 Non-Contributory member of a pension plan The EMPLOYEE STATUS REPORT will display the participation indicator value as RCP Indicator. Special note for Clients with limited tax break RRSPs If you have a RRSP with a limited tax break set up on the payroll system, certain fields from the previous year s payroll influence the system s calculation of the maximum allowable tax break provided for employee s RRSP contributions in the new year. The employee s previous year s income and pension adjustment impact that tax break calculation. On the first pay of each new year (when NCYR is processed), the total amount of the employee s year-to-date gross (YGRS) plus taxable benefits (TY05) from the previous year is passed to the new year s file for this purpose. That total updates the field Previous Year s Gross Income (PGRS) on the new year s payroll masterfile. For employees hired in the previous year, this will not accurately reflect their annual income since the previous year s income does not represent a full year. In some cases, the employee has earned considerable income outside your payroll and may wish to have that extra income considered as part of the employment income calculation. The field PYNE is reserved for that purpose. NOTE: PYNE is not cleared automatically when NCYR is processed. The Pension Adjustment (PA) reported on the tax form produced at Year-end also impacts that maximum tax break calculation the new year. When NCYR happens, ADP Canada populates EPAD in the new year s masterfile if it finds a value in the field Employee s Next Year s PA (ENPA). The tax break maximum for this type of RRSP contribution is calculated as follows: 18% of [last year s employment income (PGRS + PYNE) limited to the annual maximum RRSP contribution*], less the amount of the previous year s Pension Adjustment (EPAD). *The maximum RRSP contribution changes annually The values set aside on the first pay of the year are considered an estimate and may need to be revised if you submit any changes or adjustments impacting them in the Year-end Adjustment Runs or if they were hired in the previous year. ADP Canada can amend these fields in the new year s payroll masterfile after your Year-end tax forms are produced for employees who had entries in the Year-end Adjustment Runs. A special job commonly referred to as PJ1EPAD takes place in March for that purpose. Please Note: Employers who have RRSPs with an unlimited tax break are not affected by the information in this section. Contact you ADP Client Service Group if you are unsure of your RRSP tax break type. Regardless of the type of tax break calculation, employees are responsible to ensure that they have sufficient personal RRSP contribution room to avoid over-contributing to their RRSP plan. Page 14

19 Tax Form Balancing & Production In the month of October you will receive your Tax Form Trial Run. An additional trial run will be forwarded to you following your last pay of the year. The totals on these test runs of tax forms reflect your tax form accumulations at that point in the year. The Tax Form Trial Runs allow the opportunity to balance your tax forms prior to the final tax form production that will be filed with the government at year-end. Topics Include: Tax Form Trial Run Tax Forms Copies Tax Form Reporting on Electronic Filing Tax Form Trial Run Tax form totals are provided for all employees and printed on a draft of the employer s copy using an image of last year s tax forms. Depending on the time of the year, a version of last year s Tax Forms can be used because this year's version may not be finalized as yet. The tax form test run includes the following reports: TAX FORM RUN CONTROLS REPORT REPORT OF TAX FORM BALANCES T4, T4A, T4A-NR, Relevé 1, Relevé 2, T4A-RCA & NR4 (watermarked with the word TEST) These reports will be uploaded to the Internet (ROI) to the folder called YE Tax Forms Trial Runs and/or produced on paper. The test run will be produced in October and again following your final payroll run of the year. Your Tax Forms are sorted by Company, Branch, Department and Employee Number within each Canada Revenue Agency (CRA) Business Number (BN) or Ministère du Revenu du Québec (MRQ) Identification Number. Special sorts can be provided upon request. Totals are provided for each BN or MRQ Identification Number. Segment or sub totals are provided after every 100 pages (200 - T4s, T4As, Relevé 1s, and Relevé 2s). Validating your Tax Form Trial Run It is important that you verify the information on these forms and balance the totals to those on your General Ledger and TOTALS REPORT/PAYROLL REGISTER, as of the PAY PERIOD DATE in the upper right corner of the REPORT OF TAX FORM BALANCES. Please make any corrections as soon as possible, but no later than your last pay of the year to avoid the possible need for a Year-end Adjustment Run. Tax Form Run Controls Report This report is produced as part of both your final tax form production and the test run of tax forms. 1. Provides a total count of each type of Tax Form produced for your payroll, this includes reports for: T4 forms Page 15

20 T4A forms T4A-NR forms T4A-RCA forms NR4 forms Relevé 1 forms Relevé 2 forms 1. Indicates the options we currently have on file for your payroll. i) INSERTION column Under the INSERTION column: a) YES The employee copy of your Tax Forms will into a window envelope. be inserted b) NO The employee copy of your Tax Forms will not inserted into a window envelope. be ii) SEAL column Under the SEAL column: a) YES The window envelope will be sealed. b) NO The window envelope will not be sealed. iii) Electronic Filing (E-FILER) Under the Electronic Filing (E-FILER) column: a) YES You participate in ADP Canada s Electronic Tax Form Filing option. ADP Canada will file the government copy of your Tax Forms with Canada Revenue Agency (CRA) and Ministère du Revenu du Québec (MRQ) electronically. b) NO You do not participate in ADP Canada s Electronic Tax Form Filing option. You are required to file PART 1 of your Tax Forms with Canada Revenue Agency (CRA) and Ministère du Revenu du Québec (MRQ) using their paper or electronic format. c) ERROR- You elected to participate in ADP Canada s Electronic Tax Form Filing option but your Business Number for CRA and/or MRQ is missing. Additionally, you may have one or more employees with missing or invalid mandatory fields. Please contact your ADP Canada s Client Services group. Page 16

21 Please Note: The fields normally extracted for Electronic Filing are the employee s Shortened Name Fields (FNAM & LNAM) and the Street Address Field (ADR1). Edits have been introduced on your Payroll Edit Reports (either the Transaction Proof Report or the Payroll Entries Report) to provide warning messages if these fields are blank or contain the default value of PLEASE PROVIDE ADDRESS. These edits will help you correct all missing or invalid data before the Tax Form Production Run. Should the Shortened Name Fields remain blank when the Tax Forms are produced, the electronic field will reflect a portion of the employee s Name Field (NAME) in the Shortened Name Fields. If the Street Address is found to be blank, the ((CRA)) Electronic File will contain BLANK for this field, whereas the file sent to MRQ will show the employee s address as UNKNOWN. Please ensure that you act on the edits noted above and submit correcting entries before the Tax Form Production Run so that you do not file incomplete information with the government tax agencies. Report of Tax Form Balances The REPORT OF TAX FORM BALANCES is provided with your Tax Form Trial Run and your final Tax Forms. The report displays totals for each tax form box, and compares the accumulations on your payroll master file (column called PAYROLL REGISTER/TOTALS RECAP) to the totals reported on the actual tax forms (TAX FORMS column). Normally these columns are equal. Any difference between these two values is reported in the DIFF column and must be investigated to avoid filing incorrect tax form information. The report separates your Federal and Quebec totals and reports values separately for each tax packet (BN). How to Balance Financial Information: 1. Review the DIFF. column. All amounts shown in this column need to be investigated and corrected prior to the production of Tax Forms. Some common situations of differences are: Negative amounts on your PAYROLL REGISTER may cause an out of balance as negative amounts cannot print on a tax form. Federal Tax on T4A is greater than year to date tax on the PAYROLL REGISTER (DC04 is greater than YD04). This could occur due to an input error. The DIFF column shows the PAYROLL REGISTER total is greater than the TAX FORM total. If you asked us to suppress the printing of T4A income amounts of less than $500 where no statutory deductions were taken, the DIFF column will show the PAYROLL REGISTER amount is greater than the TAX FORM amount. An out of balance condition may exist when fields that have been reserved for Québec Tax Form reporting contain amounts for non-québec employees. If the preceding explanation did not identify the cause of the difference and you are still unsure of what action to take to correct an out-of-balance situation, please contact your ADP Canada Client Services Group. 2. Balance each amount, form type and box on this report to your TOTALS REPORT and/or PAYROLL REGISTER. i) Each Federal Tax Packet BN or MRQ Identification Number will have a separate page of the REPORT OF TAX FORM BALANCES. In addition, a Company Totals page is provided. The Company Totals page represents the total of all packets for each box. Use the Company Totals page to balance to the TOTALS REPORT. Page 17

22 For example, calculate a grand total of each earnings that should report as Employment Income (Box 14) using your TOTALS REPORT that matches the date at the top of the report. Compare that grand total to the total in the TAX FORMS column (T4 - Box 14) on the Company Totals page of the REPORT OF TAX FORM BALANCES. Continue in the same manner for each tax form box. ii) Ensure that the following information is correct: 1. Other Information Codes and Amounts appear as required. 2. All manual cheques are included and all cancelled payments are excluded from the totals displayed for the employees. 3. Additional Information: To assist you in balancing other important payroll totals, the report also displays employer portions for: Canada Pension Plan (CPP) Québec Pension Plan (QPP) Employment Insurance (EI) Provincial Parental Insurance Plan (PPIP) Québec Health Services Fund (HSF) Earnings and Contributions Ontario Employer Health Tax (EHT) Earnings and Premiums Manitoba Health & Education Tax (MB HET) Newfoundland/Labrador Health & Post Secondary Education Tax (NL HAPSET) 4. Employer's Account numbers (BN or MRQ Identification Number): Verify these numbers to your government account receipts. Call your ADP Canada Client Services Group immediately if these numbers are missing or inaccurate so they can be added to your profile before your tax forms are produced. Should these fields remain blank when your final tax forms are produced and you are a electronic filer, ADP Canada will be unable to produce tax forms on your behalf. General Information Using the individual tax forms provided along with your Tax Form Trial Run, ensure the following information is accurate: Employee's Name and Address. Page 18

23 Please Note: The fields normally extracted for Electronic Filing are the employee s Shortened Name Fields (FNAM & LNAM) and the Street Address Field (ADR1). Edits have been introduced on your Payroll Edit Reports (either the Transaction Proof Report or the Payroll Entries Report) to provide warning messages if these fields are blank or contain the default value of PLEASE PROVIDE ADDRESS. These edits will help you correct all missing or invalid data before the Tax Form Production Run. Should the Shortened Name Fields remain blank when the Tax Forms are produced, the electronic field will reflect a portion of the employee s Name Field (NAME) in the Shortened Name Fields. If the Street Address is found to be blank, the (CRA) Electronic File will contain BLANK for this field, whereas the file sent to MRQ will show the employee s address as UNKNOWN. Please ensure that you act on the edits noted above and submit correcting entries before the Tax Form Production Run so that you do not file incomplete information to the governments. Province of Employment The Province of Employment determines the tax tables to be used and must be accurate. Please Note: If an employee worked in more than one province and/or Business Number (BN) during the current taxation year, they must receive a separate Tax Form showing the earnings and deductions for each province and/or BN. Other Information Employer's Name and Address. Social Insurance Number is not zeros. You can find the following information at adp.ca/ye to assist balancing your Tax Forms : Tax Form Field Descriptions Government Remittances -balancing worksheets Year-end training is also available. Page 19

24 Tax Form Copies Your Tax Forms will be laser printed in the following format: Government and Employer Copies: T4 (for regular payrolls only) PART 1 (Canada Revenue Agency (CRA) copy) and PART 4 (employer copy) will print on 8½ x 11 paper, displaying two employees per page. If you participate in ADP Canada s Electronic Tax Form Filing Option, only PART 4 is produced. T4A (for all payroll types) PART 1 (Canada Revenue Agency (CRA) copy) and PART 4 (employer copy) will print on 8½ x 11 paper, displaying three employees per page. NOTE: the revised format for the 2010 T4A will be available in January 2011 If you participate in ADP Canada s Electronic Tax Form Filing Option, only PART 4 is produced. T4A-NR (for regular payrolls only) PART 1 & 2 (Canada Revenue Agency (CRA) copy) and PART 5 (employer copy) will print on 8½ x 11 paper, displaying three employees per page. If you participate in ADP Canada s Electronic Tax Form Filing Option, only PART 5 is produced. NR4 (for pension annuity payroll only) PART 1 (Canada Revenue Agency (CRA) copy) and PART 4 (employer copy) will print on 8½ x 11 paper, displaying three employees per page. If you participate in ADP Canada s Electronic Tax Form Filing Option, only PART 4 is produced. T4A-RCA (for pension annuity payrolls only) PART 1 & 2 (Canada Revenue Agency (CRA) copy) and PART 5 & 6 (employer copy) will print on 8½ x 11 paper, displaying three employees per page. Not filed electronically as CRA does not currently accept electronic files for this tax form. Paper forms must be filed by the employer to CRA along with the required summary. Relevé 1 and Relevé 2 (for all payroll types) PART 1 (Ministère du Revenu du Québec (MRQ) copy) and PART 4 (employer copy) will print on 8½ x 11 paper, displaying three employees per page. If you participate in ADP Canada s Electronic Tax Form Filing Option, only PART 4 is produced. Page 20

25 Please Note: Test Tax Forms provide an image of the employer s copy. Their printing can be suppressed for clients who have Reports On Internet (ROI) option. Please contact your ADP Client Services group if you have ROI access, currently receive paper Test Tax Forms and wish to suppress their printing. This will save you not only the delivery charge, but will contribute to the Go Green movement. However, final tax forms printing option cannot be suppressed. However, final tax forms printing option cannot be suppressed. Employee Copies: All Tax Forms Employee copies could also be available on Internet if you are using ADP Canada Statement Self-Service feature. Employees receiving their copy by Statement Self Service (SSS) will be identified on the employer copy with an S on the employer copy (right hand margin) Please Note: If you have Self Service or Total Access set-up for Tax Forms, you may prefer to have your employee s Tax forms printed and delivered as well as available on ROI. Especially if terminated employees de-registered before Tax Forms are produced and released, as they would not have access to their Tax Forms on the internet. Please contact your ADP Client Services Group if you need to change your Tax Forms print option. Employees who have had their tax form produced by Tax Form on Demand during the year (Pension Annuity payrolls only) will display a D on the employer copy (right hand margin). Since the employee copy was already produced, it will not be re-produced with the final tax form production. Tax Form Reporting On Electronic Filing ADP Canada can forward your Tax Form information on electronic file to both Canada Revenue Agency (CRA) and Ministère du Revenu du Québec (MRQ) at the end of February (all forms except T4A-RCA). As a Client of ADP Canada, you are set-up with the electronic filing option by default, each year. If you wish to revert to paper and file on your own, you must complete the Employee Tax Form Envelope and Filing Options Request form in your Year-end Response Guide. If you participate to ADP electronic filing program: 1. You must still file your Relevé 1 and 2 Summary with Ministère du Revenu du Québec (MRQ) using their paper or electronic format (Clic Revenu). 2. You do not need to submit paper copies of the following as they are part of the electronic filing done by ADP Canada to both Canada Revenue Agency (CRA) and Ministère du Revenu du Québec (MRQ): PART 1 of T4, T4A, T4A-NR, NR4, Relevé 1, and Relevé 2 T4 and T4A Summaries for Canada Revenue Agency (CRA) Forms T4A-RCA must be filed on paper to CRA as they do not currently accept electronic filing for this form. Page 21