Setting Up Tax Data

This chapter provides an overview of tax data and discusses how to:

Set up tax location data.
(CAN) (USA) Set up company tax data.
(CAN) (USA) Set up and maintain tax distribution data.
(USA) Set up and maintain U.S. employee tax data.
(CAN) Set up and maintain Canadian employee tax data.

Understanding Tax Data

Payroll Interface does not calculate taxes. You use Payroll Interface to track and export changes to tax data (primarily W4 withholding information) that occur during a pay period. The third-party payroll system performs all gross-to-net calculations.

To set up tax information correctly, you must understand the data mappings between PeopleSoft Enterprise HRMS and the third-party payroll system. You generally want to export some type of code or numeric value. If an employee works for multiple companies, then you must set up tax data for each company.

Note. To simplify data entry, conversion, and maintenance issues, you may want to have the third-party payroll system manage all tax information.

Tax Location Data

The Tax Location Table (TAX_LOCATION_TBL) component enables you to establish a tax location ID and to identify the work states, provinces, and localities that are associated with each tax location.

Note. If you’ve selected the Automatic Employee Tax Data option on the Installation Table (INSTALLATION_TBL) component, Product Specific page, PeopleSoft automatically sets up tax data for each work and resident state and locality of each of your employees. Tax distribution records are created for the work state or locality if the tax location represents a single state or locality.

Tax Distribution Data

Every employee must have at least one Tax Distribution record. The system automatically populates the State, Province, and Locality fields from the Tax Location field on the employee's Job Data record. The state and locality codes come from the Tax Location table.

Employee Tax Data

You will use the Employee Tax Data pages to enter and maintain federal, state, and local tax data for each of your employees.

Note. If you’ve selected the Automatic Employee Tax Data option on the Installation Table component, Product Specific page, PeopleSoft automatically sets up employee tax and tax distribution data when an employee is hired, transfers to another company, or changes jobs.

You can run SQR TAX016, the Default Tax Data Report, to verify automatically created tax data. This report tells you, within the date range that you specify, which employees have default data on their tax records.

Setting Up Tax Location Data

To set up tax locations, use the Tax Location Table (TAX_LOCATION_TBL) component.

Tax locations are discussed in the PeopleSoft Application Fundamentals for HRMS 9.0 PeopleBook.

(CAN) (USA) Setting Up Company Tax Data

To set up company tax data, use the Company State Tax Table (CO_STATE_TAX_TBL Company Local Tax Table (COMP_LOCAL_TAX_TBL), and Company Tax Table CAN (CO_CAN_TAX_TABLE) components.

Company tax data is discussed in the PeopleSoft Application Fundamentals for HRMS 9.0 PeopleBook.

(CAN) (USA) Setting Up and Maintaining Tax Distribution Data

This section discusses how to:

Set up U.S. tax distributions.
Set up Canadian tax distributions.

Pages Used to Set Up and Maintain Tax Distribution Data

Page Name	Object Name	Navigation	Usage
Employee Tax Distribution	TAX_DISTRIBUTION	Payroll Interface, Update Payroll Information, Tax Distribution USA, Employee Tax Distribution	(USA) Set up and maintain, for salaried or exempt hourly employees only, a percentage for each U.S. state or locality in which an employee consistently works.
Employee Tax Distribution	TAX_DIST_CAN	Payroll Interface, Update Payroll Information, Tax Distribution CAN, Employee Tax Distribution	(CAN) Enter the tax distribution information for Canadian employees.

Setting Up U.S. Tax Distributions

Access the Employee Tax Distribution page.

Insert Pre-filled Tax Location

Select to automatically populate this record using the tax location ID specified on the employee’s Job Data record and the corresponding information on the Tax Location Table.

State

Select to indicate each state in which the employee works.

Locality

Select to indicate taxing localities, as applicable, for each state.

Distribution %

Select to specify the percent of the employee’s time or earnings to apply to each state or locality. State/locality percentages must total to 100 percent.

Note. This tax distribution is for work location taxes only and does not include resident-based taxes. You can distribute taxes for salaried and exempt hourly employees only.

Every employee must have at least one Tax Distribution record. If only one state or locality applies for an employee, the value should be 100 percent for that single row.

Setting Up Canadian Tax Distributions

Access the Employee Tax Distribution page.

Canada doesn’t allow distribution to more than one province.

Note. All fields on this page have the same functionality as the fields on the U.S. version of the page except for the following fields.

Province	Select the province in which the employee works.
Distribution % (distribution percent)	Enter the tax distribution percentage for the province. For Canadian payroll, the distribution percent must be 100 for a single row. The default value is 100.

(USA) Setting Up and Maintaining U.S. Employee Tax Data

This section discusses how to:

Set up federal taxes.
Set up state taxes.
Set up local taxes.

Pages Used to Set Up and Maintain U.S. Employee Tax Data

Page Name	Object Name	Navigation	Usage
Federal Tax Data	TAX_DATA1	Payroll Interface, Update Payroll Information, Employee Tax Data USA, Federal Tax Data	Set up employee federal tax data. Specify employee status for FICA, FUT exemption, earned income credit (W-5), and W-2 reporting. (E&G) Enter information for nonresident alien employees. The information in the Tax Treaty/NR Data Table assigns the employee to a tax treaty table and allows the eligible employee to be subject to a reduced tax treaty rate.
State Tax Data	TAX_DATA3	Payroll Interface, Update Payroll Information, Employee Tax Data USA, State Tax Data	Set up employee state tax data. Enter data for specific states.
Local Tax Data	TAX_DATA5	Payroll Interface, Update Payroll Information, Employee Tax Data USA, Local Tax Data	Set up tax data for each locality where an employee works.

Setting Up Federal Taxes

Access the Federal Tax Data page.

Note. Federal, state, and local taxes are implemented as a set of chained pages. To add a new effective-dated row for state or local tax data, you must insert a row on the first page in the chain, the Federal Tax Data page.

Exempt from FUT

Select to specify whether an employee is exempt from FUT taxes.

Special Tax Withholding Status

Use the options in the Special Tax Withholding Status group box to indicate whether an employee’s federal withholding tax status deviates from the norm. The default is None, which means that no special status exists and that federal withholding tax should be calculated based on the employee’s gross income, marital status, and withholding allowance.

None	Select to indicate that no special status exists and that federal withholding tax should be calculated based on the employee’s gross income, marital status, and withholding allowance.
Do Not Maintain Taxable Gross and do NotWithhold Tax	Select to indicate that the employee is exempt from FWT.
Maintain Taxable Gross; FWT zero unless specified in 'Additional Withholding' below	Not used with Payroll Interface.
Non-Resident Alien; Tax Treaty/NR Data (non-resident alien; tax treaty non-resident alien data)	Select this option if the employee is a non-resident alien as indicated on the W-4 form.
W-4 Processing Status	None. Select to indicate no change. Notification Sent. Select to indicate that the employee has been notified to submit a new Form W-4. New W-4 Received. Select to indicate that a new Form W-4 has been received. Note. An authorized user can manually change an employee’s W-4 processing status to New W-4 Received when an employee submits an updated Form W-4. You can either do this on the current record or on a new effective-dated row. Note that the effective date of the new row must be earlier than or equal to February 15 of the new tax year. If future-dated records exist, the W-4 processing status of those records must also be set to New W-4 Received. You can change future-dated rows in Correction mode only.
Tax Marital Status	Select an option to indicate the employee’s marital status for federal withholding. Note. For Guam (GU), Virgin Islands (VI), and American Samoa (AS): Although employees in these territories are not subject to federal withholding, they are subject to state withholding at the same rate as federal. The system uses the tax marital status and withholding allowances information on the Federal Tax Data page to calculate the state withholding required by each of these territories. If you have employees in Guam, Virgin Islands, or American Samoa, you need to enter the tax marital status and withholding allowances claimed on their withholding certificates on this page and on the State Tax Data page. You should also select the Do Not Maintain Taxable Gross option on the Federal Tax Data page for these employees.
Withholding Allowances	Select to indicate the number of allowances that an employee claims for federal withholding tax purposes. This number should match the number on the employee’s W-4 form.

FWT Additional Amount

Use the options in the FWT Additional Amount group box to indicate additional FWT taxes to be deducted. You can specify both an amount and a percentage if appropriate, provided that your payroll system accepts this information.

Amount	Select to indicate the flat amount of additional FWT taxes to be deducted.
Percentage	Select to indicate the percentage amount of additional FWT taxes to be deducted.

Lock-In Details

Use the Lock-In Details group box to process lock-in letters from the IRS that limit employee withholding allowances.

Letter Received

Select to indicate that an employee has received a lock-in letter from the IRS. When selected, the screen displays the following message:

“Lock-In Letter Received status will be set to on for this and any higher-dated rows.”

When you acknowledge the message by clicking OK, the Limit On Allowances field becomes unavailable for entry to enable you to enter the number to which the lock-in letter limits the employee’s withholding allowances. When you enter the number, the screen displays the following message:

“If needed, the number of allowances will be changed to the lock-in limit for this and any higher-dated rows.”

If you enter a number of withholding allowances that exceeds the value in Limit On Allowances field, the system displays the following message:

“Federal Withholding allowance exceeds the IRS limit. Please enter a value less than or equal to (value in Limit On Allowances).”

Setting Up State Taxes

Access the State Tax Data page.

State Information

Use the options in the State Information group box to indicate an employee's primary work state and residency status.

State	Select to indicate the employee's primary work state. The work state is derived from the employee’s tax location on the Job Data Table.
Resident	Select to indicate whether the employee is a resident of the primary work state. If the employee does not reside in the primary work state, create an additional state entry and select the Resident option.
Non-Residency Statement Filed	Not used with Payroll Interface.
UI Jurisdiction	Select to indicate the state of jurisdiction. If an employee has only one state (the resident state), that state will become the state of jurisdiction by default. If an employee has two states (one resident, the other nonresident), the nonresident state will become the state of jurisdiction by default. If an employee has multiple nonresident states and no state is indicated as the state of jurisdiction, you will get a message to select UI Jurisdiction on one record.

Special Tax Status

Use the options in the Special Tax Status group box to indicate whether an employee’s state withholding tax status deviates from the norm. The default is None, which means that no special status exists and that federal withholding tax should be calculated based on the employee’s gross income, marital status, and withholding allowance.

None	Select to indicate that no special status exists and that federal withholding tax should be calculated based on the employee’s gross income, marital status, and withholding allowance.
Do Not Maintain Taxable Gross and Do Not Withhold Tax	Select to indicate that the employee is exempt from FWT.
Maintain Taxable Gross; SWT zero unless specified in 'Additional Withholding' below	Not used with Payroll Interface.
SWT Marital/Tax Status	Select to indicate the employee's marital status. Repeat for each state where the employee pays taxes. Note. For Guam (GU), Virgin Islands (VI), and American Samoa (AS):Employees in these territories are subject to state withholding at the same rate as federal. The system uses the marital status and withholding allowances information on the Federal Tax Data page to calculate the state withholding that is required by each of these territories. If you have employees in Guam, Virgin Islands, or American Samoa, you need to enter the marital status and withholding allowances claimed on their withholding certificates on this page and on the Federal Tax Data page.

Additional Amount Adjustment

Use the options in the Additional Amount Adjustment group box to indicate an increase or decrease in the amount of taxes to be deducted. You can specify both an amount and a percentage if appropriate, provided that your payroll system accepts this information.

Amount	Select to indicate the flat amount of additional FWT taxes to be deducted.
Percentage	Select to indicate the percentage amount of additional FWT taxes to be deducted.

Lock-In Details

Use the options in the Lock-In Details group box to additional withholdings and exemptions.

Addl Allowances (additional allowances)	Used only for California. Select to indicate the number of additional allowances that the employee claims for state withholding tax purposes.
% of Federal W/H	Used only for Arizona. Select to indicate the percentage of federal withholding that constitutes the state withholding.
SDI Status	Select to indicate the employee's SDI status.
Annual Exemption Amount	Used only for Mississippi. Select to enter the annual exemption amount.
Exempt from SUT	Select to indicate whether the employee is exempt from SUT taxes.

California Wage Plan Code

Disability/Unemployment Plan

Used only by employees of the California Public Employees Retirement System (PERS). Select State/State (State Disability Plan and State Unemployment) unless instructed otherwise by your company’s tax advisors.

Setting Up Local Taxes

Access the Local Tax Data page.

Note. The Local Tax Data page has three scroll areas. The outer scroll area corresponds to the effective dates entered on the Federal Tax Data page, the middle scroll area corresponds to the states entered on the State Tax Data page, and the inner scroll area corresponds to the localities that you enter on this page.

Locality

Use the options in the Locality group box to identify each tax locality where an employee lives or works. Before assigning localities to employees, you must first establish localities on the Company Local Tax Table.

Note. If you are setting up local tax information for an employee who lives or works in more than one state, you must enter the appropriate local tax information for each state. An employee can also have more than one local residence. You will need multiple resident locality entries if two different taxes exist for the same locality.

Note. For Indiana Localities:In Indiana, the employee’s county of residence is the first determining factor for tax withholding. If the county where an employee resides on January 1 of any year imposes a tax, you must withhold that tax. The employee is liable for the tax for the entire year, even if he or she moves to a nontaxing county. If the county of residence does not impose a tax, but the county in which the principal place of work is located does, withhold at the appropriate nonresident rate.

For employees moving from out of state into a taxing Indiana locality, withholding does not begin until January 1 of the next year, when residence determination is made.

Resident

Select to indicate that the locality is a resident locality.

Other Work Locality

Select to link multiple local work taxes together when you have more than one work tax for a given locality. This entry links to another local work tax code, which is then entered on another Locality row.

Note. When setting up Indiana localities at the employee level, you do not need to set up any localities that have an alpha suffix.

Special Tax Status

Use the options in the Special Tax Status group box to indicate whether an employee’s local withholding tax status deviates from the norm.

None	Select to indicate that the employee is exempt from LWT. The taxable base for LWT will not reflect the pay that the employee receives.
Do Not Maintain Taxable Gross and Do Not Withhold Tax	Select to indicate that the employee is exempt from LWT. The taxable base for LWT will not reflect the pay that they receive.
Maintain Taxable Gross; LWT zero unless specified in 'Additional Withholding' below	Select to override the normal tax calculation with an amount or percentage that is indicated in the Additional Withholding Amount or Percentage fields. The system determines taxable gross for FWT using the individual earnings that an employee is paid. The tax that is withheld then becomes either the flat amount or a percentage of the local taxable wages.

(CAN) Setting Up and Maintaining Canadian Employee Tax Data

This section lists common elements and discusses how to:

Set up Canadian income taxes.
Set up Quebec income taxes.
Set up provincial income taxes.

Common Elements Used in This Section

Non-Indexed Amount	Select to indicate that full indexation is in effect for federal, Quebec, and provincial taxes. Enter amounts not eligible for indexing, such as pension income and tuition and education fees. The nonindexed amount is the component of the net claim amount that is not subject to indexing. For example, if the applicable taxing authority specifies an indexation factor of 3 percent, the new net claim amounts for all the affected employees is recalculated in the following way: Net claim amount + 0.03 (net claim amount – nonindexed amount). The Non-Indexed Amount field is not considered during the Calculate Pay COBOL SQL process (PSPPYRUN). However, it is required by the year-end Update Source Deductions SQR Report process (TAX103CN), which calculates and inserts new net claim amounts. This process applies a specified percentage, fixed amount increase, or both as illustrated in the example noted previously.
Other Tax Credits	Select to enter other authorized tax credits for the year as approved by the relative government agency. If other tax credits are entered midyear, the amount must be prorated by the number of pay periods remaining in the year.
Prescribed Area	Select to enter an annual deduction from gross allowed for those employees who live in designated areas of Canada (such as the Northwest Territories, Nunavut, and the Yukon Territory). Note that if an amount is entered midyear, it must be prorated by the number of pay periods remaining in the year.
Special Letters	If the employee is eligible for annual deductions authorized by a taxation office, but not deducted at source from the employee’s pay (such as child care expenses), select to enter that amount. If a special letter is entered midyear, the amount must be prorated by the number of pay periods remaining in the year.

Pages Used to Set Up and Maintain Canadian Employee Tax Data

Page Name	Object Name	Navigation	Usage
Canadian Income Tax Data	TAX_DATA_CAN1	Payroll Interface, Update Payroll Information, Employee Tax Data CAN, Canadian Income Tax Data	Set up Canadian income tax data.
Quebec Income Tax Data	TAX_DATA_CAN3	Payroll Interface, Update Payroll Information, Employee Tax Data CAN, Quebec Income Tax Data	Set up Quebec income tax data.
Provincial Income Tax Data	TAX_DATA_CAN4	Payroll Interface, Update Payroll Information, Employee Tax Data CAN, Provincial Income Tax Data	Set up provincial income tax data.

Setting Up Canadian Income Taxes

Access the Canadian Income Tax Data page.

Special CIT Status (special Canadian income tax status)

Select options in this field to indicate whether an employee’s withholding tax status deviates from the norm:

Exempt (Not Subject to CIT) (exempt [not subject to Canadian income tax]): Select if the employee is exempt from CIT. The taxable base for CIT, however, will still reflect the taxable pay that the employee receives to ensure that proper employment income is reported on the year-end T4 slip.

Maintain gross: Select to override the normal tax calculation with an amount indicated in the Additional Withholding group box.

None: Select if no special status exists. If you select this option, the system calculates federal withholding tax based on the employee’s net taxable gross (the norm).

Net Claim Amount

Select to enter the total sum of all federal income tax exemption amounts from the employee’s TD1 form (including the nonindexed amount). The system uses this field during the Calculate Pay COBOL SQL process.

Months Subject to CPP/QPP (months subject to Canada Pension Plan/Quebec Pension Plan)

Select to enter the month that represents the last month in which the employee is eligible for CPP/QPP contributions. Use the number that corresponds with the desired month of the calendar year (for example 1 for January). For example, if an employee was subject to CPP/QPP for nine months of the calendar year ending in September, and exempt for the remaining three months, enter 9. If the employee was exempt for the entire year, enter 0. Because employees are usually subject to CPP/QPP contributions for the entire year, the default is 12.

CPP/QPP contributions will continue to be collected until the month defined in the Months Subject to CPP/QPP field has been met or the prorated yearly maximum contribution amount has been reached, whichever comes first.

Note. The system will not take CPP/QPP contributions if the employee is under the minimum age of 18 or over the maximum age of 70, as determined by the birth date that is entered on the Personal Data - Eligibility/Identity page, unless you specify months subject to CPP/QPP on this page. Effective January 1, 1998, the maximum age exemption of 70 has been removed for QPP contribution calculations.

Status Indian

Select this check box to identify a Status Indian employee who is wholly tax-exempt. When this check box is selected, the Special CIT Status field on this page and the Special QIT Status (special Quebec income tax status) field on the Quebec Income Tax Data page become unavailable for entry and automatically set to an Exempt status.

PeopleSoft Payroll for North America provides system processing to support the year-end T4 and RL-1 reporting of employment income for Status Indian employees whose total remuneration received in the reporting year is based on Status Indian requirements.

When the Status Indian check box is selected, the relevant tax form definition boxes of the T4 and RL-1 forms will facilitate the reporting of Status Indian tax-exempt employment income for year-end slip reporting purposes. For further information, refer to the Special Tax Topic on Year-End Processing located on Customer Connection.

Note. If your company does not elect to provide CPP coverage to the Status Indian employees, update the Months Subject to CPP/QPP field to 0 (zero).

Payroll Tax Exempt

Select this check box if the employee should not be subject to the Northwest Territories or Nunavut payroll tax. Effective July 1, 1993, the Northwest Territories imposed a one-percent payroll withholding tax on specified remuneration paid for work performed in the Northwest Territories. Effective April 1, 1999, part of the Northwest Territories split off to form the new territory of Nunavut. Only employees who earn more than 5,000 CAD in one calendar year in the Northwest Territories or Nunavut are subject to this tax. The tax is payable on the full amount of specified remuneration earned while working in the Northwest Territories or Nunavut in the year.

If an employee’s Northwest Territories or Nunavut earnings will not be more than 5,000 CAD for the calendar year, the employee is eligible for exemption from this tax. You can stop the tax withholding for this employee by selecting the Payroll Tax Exempt check box. The system continues to maintain the payroll tax gross for the employee, but the tax is not withheld. If you find later in the year that the employee should be subject to the tax, clear the Payroll Tax Exempt check box. On the next system-generated paycheck for the employee, the system will retroactively deduct the tax not previously withheld on all year-to-date Northwest Territories or Nunavut wages.

Note. Before running the final payroll for the calendar year, review the tax balance records of any employees whose Northwest Territories or Nunavut payroll tax status may be in doubt. Employees whose total Northwest Territories or Nunavut earnings will be more than 5,000 CAD for the year should not be identified as exempt from the tax. Employees whose total earnings will be 5,000 CAD or less for the year, but for whom tax has been withheld, should be designated as exempt from the tax, and the tax that was already withheld should be refunded.

LCF Amount (federal labour-sponsored funds tax credit)

Select to enter the purchase amount of shares in Labour-Sponsored Venture Capital Corporations (LSVCC). This amount is used to calculate and apply the federal and provincial tax credits at source, for employees who purchase LSVCC shares. The PeopleSoft Canadian Tax tables maintain the maximum federal and provincial tax credit amounts and rates.

CIT Y Factor (Canadian income tax Y Factor)

The CIT Y Factor is used in the calculation of the provincial tax reduction for employees in the provinces of Manitoba and Ontario. Select to enter a dollar amount for the CIT Y Factor and not a number of dependents.

If you leave this field blank for employees who work in Manitoba, the provincial tax will be based on the net claim amount that you have entered from the employee’s TD1 form. If you leave this field blank for employees who work in Ontario, no provincial tax reduction is calculated.

CIT TH Factor (Canadian income tax TH Factor)

Note. This field is no longer used, but is maintained for history data.

The CIT TH Factor is the threshold amount that is used to calculate the provincial net income tax surtax for employees in the province of Manitoba. If you leave this field blank for an employee in Manitoba, the threshold amount is based on the net claim amount that you have entered from the employee’s TD1 form.

Note. You should review the CIT Y Factor and CIT TH Factor amounts when provincial tax legislation changes the values of these factors or when a change in the employee’s number of dependents would affect these amounts.

Cross Province

Select this check box to generate cross-province tax processing. The default for this check box is cleared.

An employee who resides in one province or territory and is employed in another may be subject to excessive tax deductions. If the CRA approves a written request for tax relief in this instance, the employer is required to limit the employee’s tax liability to the amount based upon that employee’s province of residence. This type of situation is referred to as cross-province taxation because it applies only between provinces or territories.

Use Province of Residence

Select this check box to use the employee’s province of residence for calculating the employee’s tax liability. The default for this check box is selected.

Or Override

Select to override the employee’s province of residence. Specify the applicable province of residence. Tax calculation is based upon province of residence override as defined in this field.

Note. When the province of employment for taxation purposes is Quebec (QC), the reduction in the tax liability is applied to the federal portion.

Additional Withholding

Amount and Percentage

Select to indicate additional CIT taxes that should be taken. You can specify both an amount and a percentage if appropriate. The effect that this field has depends on the option that you select in the Special CIT Status field:

If you select None, you can specify an amount for additional withholding only. The system calculates taxes based on the information that is on the tax table and takes out the additional withholding amount indicated.

If you select Maintain gross and specify an amount, a percentage, or both for additional withholding, the system overrides the normal calculated tax and takes only the amount or percentage that entered in the Amount or Percentage fields.

Note. If you do not want to take additional withholding from a particular cheque, clear the Addl Taxes (additional taxes) check box on the By Paysheet - One-Time Taxes page.

Commission

Income	For individuals paid on a commission basis, select to enter the employee’s annual estimated commission income.
Expenses	For individuals paid on a commission basis, select to enter the employee’s annual expenses.
RPP/RRSP Limit (Registered Pension Plan/Registered Retirement Savings Plan limit)	Select to enter the RPP/RRSP limit. This limit overrides the legislated annual RPP/RRSP limit that is maintained by PeopleSoft on the Canadian Tax table. These fields are used during the commission tax method calculation to arrive at taxable gross.

Employment Insurance

Calc Status (calculate status)

The only options applicable as of January 1, 1997 are EI Rules (employment insurance rules) and EI Exempt (employment insurance exempt). The Calculate Pay process uses this field to determine whether to deduct EI premiums. Pre-January 1, 1997 the only options available were the UI Yearly (unemployment insurance yearly) and UI Period (unemployment insurance period) options.

Select EI Rules if the employee is subject to EI premiums. This is the default premium calculation formula.

Select EI Exempt if the employee is exempt from paying EI premiums.

Yearly Maximum

When a calculate status of UI Yearly is selected, the system displays the current year’s annual maximum insurable earnings amount in the Yearly Max field as listed in the Canadian Tax table. Note that you must review and update this value if the employee starts after the beginning of the year or terminates before the end of the year.

Note. UI Yearly and UI Period cannot be selected on records dated later than January 1, 1997. The only valid calculate status selections effective after January 1, 1997 are EI Rules and EI Exempt.

Wage Loss Plan Information

Wage Loss Plan

Select the appropriate wage loss plan code. This applies the correct employer EI premium rate as determined by the benefit coverage level of the wage loss replacement plan for short-term disability.

You define valid wage loss replacement plan codes in the Canada Wage Loss Plan Table (WAGELS_PLN_TBL) component in Define Payroll Taxes. You must create these codes before you use them elsewhere in the system.

Note. If the Multiple Jobs feature is enabled, you can enter multiple wage loss plans per employee. If the Multiple Jobs Allowed check box is cleared, you can enter only one wage loss plan per employee.

If the Automatic Employee Tax Data check box on the Installation Table - Products Specific page is selected, the system automatically creates employee tax data records whenever you hire an employee or transfer an employee to a new company.

The wage loss plan default that you specify on the Pay Group Table - Definition page becomes the default wage loss plan on the Canadian Income Tax Data page whenever the system automatically creates employee tax data records.

YTD Balances from Prev Company

If the employee meets the guidelines set forth by the CRA for the continuation of CPP/QPP contributions and EI premiums as the result of a merger, acquisition, or company restructuring, use the fields in the YTD Balances from Prev Company (year-to-date balances from previous company) group box to enter the employee’s year-to-date carryover amounts that were brought forward to the new company.

Enter the employee’s year-to-date CPP and EI contribution amounts from the previously acquired/merged company into the appropriate fields.

Setting Up Quebec Income Taxes

Access the Quebec Income Tax Data page.

Tax Information

Special QIT Status (special Quebec income tax status)	These options are similar to those on the Canadian Income Tax Data page. Select to indicate whether the employee has any special tax status for QIT purposes.
Net Claim Amount	Select to enter the total sum of all Quebec income tax exemption amounts from the employee’s Source Deductions Return (form TP-1015.3-V).
Other Deductions	Select to enter other authorized Revenu Quebec annual deductions, such as the deduction representing alimony or maintenance payments.

Additional Withholding

Amount and Percentage

Select to indicate whether additional QIT taxes that should be taken. You can specify both an amount and a percentage, if appropriate. The effect that this field has depends on the option that you select in the Special QIT Status field:

If you select Maintain gross and specify an amount, a percentage, or both for additional withholding, the system overrides the normal calculated tax and takes only the amount and or percentage that is entered in the Amount and Percentage fields.

Note. If you do not want to take additional withholding from a particular check, clear the Additional Taxes check box on the By Paysheet - One-Time Taxes page.

Commission

Income	For individuals paid on a commission basis, select to enter the employee’s estimated annual commission income.
Expenses	For individuals paid on a commission basis, select to enter the employee’s estimated annual expenses for individuals that are paid on a commission basis.

YTD Balances from Prev Company

Enter the employee’s year-to-date CPP and EI contribution amounts from the previously acquired/merged company into the appropriate fields.

Setting Up Provincial Income Taxes

Access the Provincial Income Tax Data page.

Prov. Tax Credit Amount (TCP) (provincial tax credit amount)

Select to enter the total claim amount from the employee’s or pensioner’s provincial or territorial Form TD1. This is the sum of all of the individual personal tax credit amounts reported on the provincial Form TD1 contributing to the total claim amount.

Labour Sponsored Shares Amount

Select to enter the provincial or territorial labour-sponsored funds tax credit amount.

Note. If a Provincial Income Tax Data record exists, the value that is specified in the Labour Sponsored Shares Amount field (including zero) is used for the provincial income tax calculation, and the LCF Amount field on the Canadian Income Tax Data page is used for the federal income tax calculation. If no Provincial Income Tax Data record exists, by default the system uses the federal labour-sponsored funds tax credit amount that is indicated in the LCF Amount field of the Canadian Income Tax Data page for both federal and provincial income tax calculations.

Note. (Employers paying employees in the Province of Saskatchewan). Investment amounts in venture capital corporations that are registered federally only must be entered into the LCF Amount field of the employee’s Canadian Income Tax Data page. Investment amounts in venture capital corporations that are registered in Saskatchewan must be entered into the Labour Sponsored Shares Amount field of the employee’s Provincial Income Tax Data page.

Dependant Claim Amount (Y)

Where applicable, calculate and enter the total dependent claim amount (Y). This is the total sum of the calculated reduction factor Y amounts applicable to Manitoba and Ontario that are used in determining the provincial tax reduction (factor S).

Other Provincial Credits (K3P)

This field is currently not in use. Currently, although factor K3P is referenced in the TONI formulas, the details of the other provincial tax credits that are authorized by a tax services office or tax centre related to this factor have not yet been determined by the government.

Note. For cross-province taxation to be calculated correctly, entries should be created on the Provincial Income Tax Data page for both the province of employment and the province of residence. If entries do not exist for one or both provinces, the provincial basic personal amounts from the Canadian Tax table will be applied.

Insert Pre-filled Tax Location	Select to automatically populate this record using the tax location ID specified on the employee’s Job Data record and the corresponding information on the Tax Location Table.
State	Select to indicate each state in which the employee works.
Locality	Select to indicate taxing localities, as applicable, for each state.
Distribution %	Select to specify the percent of the employee’s time or earnings to apply to each state or locality. State/locality percentages must total to 100 percent. Note. This tax distribution is for work location taxes only and does not include resident-based taxes. You can distribute taxes for salaried and exempt hourly employees only. Every employee must have at least one Tax Distribution record. If only one state or locality applies for an employee, the value should be 100 percent for that single row.

Special CIT Status (special Canadian income tax status)	Select options in this field to indicate whether an employee’s withholding tax status deviates from the norm: Exempt (Not Subject to CIT) (exempt [not subject to Canadian income tax]): Select if the employee is exempt from CIT. The taxable base for CIT, however, will still reflect the taxable pay that the employee receives to ensure that proper employment income is reported on the year-end T4 slip. Maintain gross: Select to override the normal tax calculation with an amount indicated in the Additional Withholding group box. None: Select if no special status exists. If you select this option, the system calculates federal withholding tax based on the employee’s net taxable gross (the norm).
Net Claim Amount	Select to enter the total sum of all federal income tax exemption amounts from the employee’s TD1 form (including the nonindexed amount). The system uses this field during the Calculate Pay COBOL SQL process.
Months Subject to CPP/QPP (months subject to Canada Pension Plan/Quebec Pension Plan)	Select to enter the month that represents the last month in which the employee is eligible for CPP/QPP contributions. Use the number that corresponds with the desired month of the calendar year (for example 1 for January). For example, if an employee was subject to CPP/QPP for nine months of the calendar year ending in September, and exempt for the remaining three months, enter 9. If the employee was exempt for the entire year, enter 0. Because employees are usually subject to CPP/QPP contributions for the entire year, the default is 12. CPP/QPP contributions will continue to be collected until the month defined in the Months Subject to CPP/QPP field has been met or the prorated yearly maximum contribution amount has been reached, whichever comes first. Note. The system will not take CPP/QPP contributions if the employee is under the minimum age of 18 or over the maximum age of 70, as determined by the birth date that is entered on the Personal Data - Eligibility/Identity page, unless you specify months subject to CPP/QPP on this page. Effective January 1, 1998, the maximum age exemption of 70 has been removed for QPP contribution calculations.
Status Indian	Select this check box to identify a Status Indian employee who is wholly tax-exempt. When this check box is selected, the Special CIT Status field on this page and the Special QIT Status (special Quebec income tax status) field on the Quebec Income Tax Data page become unavailable for entry and automatically set to an Exempt status. PeopleSoft Payroll for North America provides system processing to support the year-end T4 and RL-1 reporting of employment income for Status Indian employees whose total remuneration received in the reporting year is based on Status Indian requirements. When the Status Indian check box is selected, the relevant tax form definition boxes of the T4 and RL-1 forms will facilitate the reporting of Status Indian tax-exempt employment income for year-end slip reporting purposes. For further information, refer to the Special Tax Topic on Year-End Processing located on Customer Connection. Note. If your company does not elect to provide CPP coverage to the Status Indian employees, update the Months Subject to CPP/QPP field to 0 (zero).
Payroll Tax Exempt	Select this check box if the employee should not be subject to the Northwest Territories or Nunavut payroll tax. Effective July 1, 1993, the Northwest Territories imposed a one-percent payroll withholding tax on specified remuneration paid for work performed in the Northwest Territories. Effective April 1, 1999, part of the Northwest Territories split off to form the new territory of Nunavut. Only employees who earn more than 5,000 CAD in one calendar year in the Northwest Territories or Nunavut are subject to this tax. The tax is payable on the full amount of specified remuneration earned while working in the Northwest Territories or Nunavut in the year. If an employee’s Northwest Territories or Nunavut earnings will not be more than 5,000 CAD for the calendar year, the employee is eligible for exemption from this tax. You can stop the tax withholding for this employee by selecting the Payroll Tax Exempt check box. The system continues to maintain the payroll tax gross for the employee, but the tax is not withheld. If you find later in the year that the employee should be subject to the tax, clear the Payroll Tax Exempt check box. On the next system-generated paycheck for the employee, the system will retroactively deduct the tax not previously withheld on all year-to-date Northwest Territories or Nunavut wages. Note. Before running the final payroll for the calendar year, review the tax balance records of any employees whose Northwest Territories or Nunavut payroll tax status may be in doubt. Employees whose total Northwest Territories or Nunavut earnings will be more than 5,000 CAD for the year should not be identified as exempt from the tax. Employees whose total earnings will be 5,000 CAD or less for the year, but for whom tax has been withheld, should be designated as exempt from the tax, and the tax that was already withheld should be refunded.
LCF Amount (federal labour-sponsored funds tax credit)	Select to enter the purchase amount of shares in Labour-Sponsored Venture Capital Corporations (LSVCC). This amount is used to calculate and apply the federal and provincial tax credits at source, for employees who purchase LSVCC shares. The PeopleSoft Canadian Tax tables maintain the maximum federal and provincial tax credit amounts and rates.
CIT Y Factor (Canadian income tax Y Factor)	The CIT Y Factor is used in the calculation of the provincial tax reduction for employees in the provinces of Manitoba and Ontario. Select to enter a dollar amount for the CIT Y Factor and not a number of dependents. If you leave this field blank for employees who work in Manitoba, the provincial tax will be based on the net claim amount that you have entered from the employee’s TD1 form. If you leave this field blank for employees who work in Ontario, no provincial tax reduction is calculated.
CIT TH Factor (Canadian income tax TH Factor)	Note. This field is no longer used, but is maintained for history data. The CIT TH Factor is the threshold amount that is used to calculate the provincial net income tax surtax for employees in the province of Manitoba. If you leave this field blank for an employee in Manitoba, the threshold amount is based on the net claim amount that you have entered from the employee’s TD1 form. Note. You should review the CIT Y Factor and CIT TH Factor amounts when provincial tax legislation changes the values of these factors or when a change in the employee’s number of dependents would affect these amounts.
Cross Province	Select this check box to generate cross-province tax processing. The default for this check box is cleared. An employee who resides in one province or territory and is employed in another may be subject to excessive tax deductions. If the CRA approves a written request for tax relief in this instance, the employer is required to limit the employee’s tax liability to the amount based upon that employee’s province of residence. This type of situation is referred to as cross-province taxation because it applies only between provinces or territories.
Use Province of Residence	Select this check box to use the employee’s province of residence for calculating the employee’s tax liability. The default for this check box is selected.
Or Override	Select to override the employee’s province of residence. Specify the applicable province of residence. Tax calculation is based upon province of residence override as defined in this field. Note. When the province of employment for taxation purposes is Quebec (QC), the reduction in the tax liability is applied to the federal portion.

Prov. Tax Credit Amount (TCP) (provincial tax credit amount)	Select to enter the total claim amount from the employee’s or pensioner’s provincial or territorial Form TD1. This is the sum of all of the individual personal tax credit amounts reported on the provincial Form TD1 contributing to the total claim amount.
Labour Sponsored Shares Amount	Select to enter the provincial or territorial labour-sponsored funds tax credit amount. Note. If a Provincial Income Tax Data record exists, the value that is specified in the Labour Sponsored Shares Amount field (including zero) is used for the provincial income tax calculation, and the LCF Amount field on the Canadian Income Tax Data page is used for the federal income tax calculation. If no Provincial Income Tax Data record exists, by default the system uses the federal labour-sponsored funds tax credit amount that is indicated in the LCF Amount field of the Canadian Income Tax Data page for both federal and provincial income tax calculations. Note. (Employers paying employees in the Province of Saskatchewan). Investment amounts in venture capital corporations that are registered federally only must be entered into the LCF Amount field of the employee’s Canadian Income Tax Data page. Investment amounts in venture capital corporations that are registered in Saskatchewan must be entered into the Labour Sponsored Shares Amount field of the employee’s Provincial Income Tax Data page.
Dependant Claim Amount (Y)	Where applicable, calculate and enter the total dependent claim amount (Y). This is the total sum of the calculated reduction factor Y amounts applicable to Manitoba and Ontario that are used in determining the provincial tax reduction (factor S).
Other Provincial Credits (K3P)	This field is currently not in use. Currently, although factor K3P is referenced in the TONI formulas, the details of the other provincial tax credits that are authorized by a tax services office or tax centre related to this factor have not yet been determined by the government.