The Check Label field in this record should be exactly as those for the Ontario Provincial and Ontario Health records so that all will be grouped on payroll checks to avoid confusing your employees. We suggest entering "Tax" or "Income Tax" in the Check Label field of the Ontario, Ontario Health, and Federal Tax Authority records all the same that these taxes are grouped on paychecks.
Annualized Compute, Allow RRSP and Allow Other Pretax should be checked. The appropriate Credit % CPP and Credit % EI values should be entered. The Tax Type Id should be set to Federal.
Format for Base Tax Tab
It will be necessary to convert the published Canadian Federal Tax Table values into Data-Basics conventions before entering them into the Base Tax tab of the SAM Pro Tax tables. The correct SAM Pro values will be available from your support representative, but the needed calculations are shown here for completeness. Remember that Adjustments may be required in both January and July!
Step 1: Start with the published Canadian format.
This information will be available on the Canadian Revenue Agency website, and will be displayed in the following format for the annualized compute:
|
Option 1 – July 2006 federal tax rates and income thresholds |
||
Annual taxable income AMore than – Not more than |
Rate R |
Constant K
|
|
$ 0 – $ 36,378 |
0.155 |
$ 0 |
|
$ 36,378 – $72,756 |
0.220 |
$2,365 |
|
$72,756 – $118,285 |
0.260 |
$5,275 |
|
$118,285 – and over |
0.290 |
$8,823 |
Step 2: Convert the published format for use in SAM Pro.
The following formulas should be used to calculate the applicable Additional Amount values for the SAM Pro Canadian Federal Tax Table.
The following example shows the calculations for July 1, 2006.
Example
|
Level (L) |
More Than |
Not More Than (TM) |
Rate (R) |
K Factor |
SamPro Addn Amt (AA) |
|
1 |
0 |
36378 |
0.155 |
0 |
0 |
|
2 |
36378 |
72756 |
0.22 |
2365 |
5638.59 |
|
3 |
72256 |
118285 |
0.26 |
5275 |
13641.75 |
|
4 |
118285 |
|
0.29 |
8823 |
25479.29 |
|
|
e.g. |
|
|
|
|
|
|
For Level 3 : AA(3) = (TM(2)-TM(1)*R(2)+AA(2) |
|
|
||
|
|
or AA(3)=(72756-36378)*.22+5638.59=13641.75 |
|
|||
Step 3: Enter the appropriate values in your SAM Pro Tax Table.
For each level, enter the Taxable Maximum Value ("Not more than") and Rate from the published rates, and the Additional Amount that you derived from the above formulas.
Example:
The following illustration shows the Canadian Federal tax table for July, 2006.
Note: be sure to also complete the TD1 Codes tab according to the published values.
This is implemented nationally except in Quebec where the QPP would be used instead.
Tax Type Id should be set to CPP. The Annualized Compute box should checked.
For reporting purposes, the pensionable earnings limit should be entered in the Limits fields (Employee and Employer) on the Main tab instead specifying a maximum amount on the Base Tax tab. Both Employee and Employer are taxed, and the Standard Deduction should be completed.
The Check Label field in this record should be exactly as those for the Federal and Ontario Health records so that all will be grouped on payroll checks to avoid confusing your employees. We suggest entering "Tax" or "Income Tax" in the Check Label field of the Ontario, Ontario Health, and Federal Tax Authority records all the same that these taxes are grouped on paychecks.
Annualized Compute, Allow RRSP and Allow Other Pretax should be checked. The appropriate Credit % CPP and Credit % EI values should be entered. The Tax Type should be set to Province.
The ‘Tax Employee’ box should be flagged. The Base Tax, TD1 Codes, and Surtax tabs should be completed according to the published rates.
The Check Label field in this record should be exactly as those for the Federal and Ontario Provincial records so that all will be grouped on payroll checks to avoid confusing your employees. We suggest entering "Tax" or "Income Tax" in the Check Label field of the Ontario, Ontario Health, and Federal Tax Authority records all the same that these taxes are grouped on paychecks.
Annualized Compute, Allow RRSP and Allow Other Pretax should be checked. The Tax Type Id should be set to Other.
The following illustration shows the structure of the base tax setup. These are the 2006 values – refer to the published values for other years.
You will set up one taxing authority record for Canadian unemployment insurance, and two tax tables (one for employee rates and the other for employer rates).
The Tax Type Id should be set to EI.
Check the Tax Employee box, and enter the Annualized Employee Limit from the published rates. Enter the Base Tax tab with the published values.
Check the Tax Employer box, and enter the Annualized Employer Limit from the published rates. Enter the Base Tax tab with the published values; the Employer’s Rate will be 1.4 times that of the Employer.
In addition to the individually calculated taxes, Ontario’s EHT – Employer Heath Tax must also be considered. It is due if your total payroll exceeds $400,000 of gross wages and is based on a sliding percentage scale. The size of your company determines how often this tax must be files. Ontario EHT should be set up as a Vendor record.