PeopleSoft Payroll Interface 9.1 PeopleBook

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 HCM 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 HCM Application Fundamentals 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 HCM Application Fundamentals 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	Definition Name	Navigation	Usage
Update Tax Distribution	TAX_DISTRIBUTION	Payroll Interface, Update Payroll Information, Tax Distribution USA, Update 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.
Update Tax Distribution	TAX_DIST_CAN	Payroll Interface, Update Payroll Information, Tax Distribution CAN, Update Tax Distribution	(CAN) Enter the tax distribution information for Canadian employees.

Setting Up U.S. Tax Distributions

Access the Update Tax Distribution page (Payroll Interface, Update Payroll Information, Tax Distribution USA, Update Tax Distribution).

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.

Percent of 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.

(CAN) Setting Up Canadian Tax Distributions

Access the Update Tax Distribution page (Payroll Interface, Update Payroll Information, Tax Distribution CAN, Update Tax Distribution).

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.
Percent of Distribution	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	Definition 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 (Payroll Interface, Update Payroll Information, Employee Tax Data USA, Federal Tax Data).

Federal taxes include federal income tax, FICA, and FUT. If the employee works for multiple companies, the tax data is defined by company.

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.

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 territory 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 territory withholding required by each of these territories.

Federal Withholding Elements

Special Withholding Tax Status	Use this field 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. Maintain taxable gross: This option is not used with Payroll Interface. No taxable gross; no tax taken: Select to indicate that the employee is exempt from FWT. Nonresident alien: Select this option if the employee is a non-resident alien as indicated on the W-4 form.
Tax Marital Status and Check here and select Single status if married but withholding at single rate	Select the appropriate tax marital status for federal withholding taxes as indicated on the employee's completed Form W-4. If the employee has selected "Married but withhold at single rate" on the W-4 form, you must select both the Single option and the check box marked "Check here and select Single status if married but withholding at single rate." This setting results in the employee being reported with marital status W. Note. If you select the check box, the system automatically selects the Single option when you save.
Withholding Allowances	Enter the number of allowances that the employee claims for FWT purposes. This number should match the number on the employee's W-4 form.
Additional Amount andAdditional Percentage	Use these fields to indicate that additional FWT taxes are to be taken. You can specify both an amount and a percentage, if appropriate, provided that your payroll system accepts this information.
Earned Income Credit Status	Select from these options: Not applicable: Select this option if the employee is not eligible for this credit. No payment is made. Single, or Head of Household: Select this option if the employee is eligible for the credit and is single. Married without spouse filing: Select this option if the employee is eligible for the credit and is married without the spouse filing. Married, both spouses filing: Select this option if the employee is eligible for the credit and is married with both spouses filing.
Exempt from FUT	Select this check box if the employee is exempt from FUT (Federal Unemployment tax).

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.

Lock-In Letter Details

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

Letter Received	Select this check box if a letter has been received from the Internal Revenue Service (IRS) specifying the allowances an employee is allowed to take.
Limit on Allowances	Enter the maximum number of allowances possible. The value that you enter in the Withholding Allowances field cannot exceed the value that you enter in this field.

Tax Treaty/Non-Resident Data

Use these fields to enter information for nonresident alien employees.

Country	Select a country from the list, or select one of the generic entries that are prefixed with $ that you may have established on the Treaty NR Alien table (treaty nonresident alien table). Note. You must set up countries that do not have treaties with the U.S. on the Treaty NR Alien table. See (E&G) Setting Up 1042 Processing for Non-resident Aliens.
Treaty ID	Select the appropriate treaty ID. If the employee is from a country with which the U.S. does not have a treaty, select NO TREATY.
Form W9 Received and Form W9 Effective Date	If the NRA employee is a resident for tax purposes and files a W9, select Yes and enter the appropriate date in the Form W9 Effective Date field. Select No if the employee is from a country with which the U.S. does not have a treaty.
Taxpayer ID Number	Enter the taxpayer ID number of the employee.

(E&G) Education and Government

Use this group box to enter information that related to reduced tax treaty rates for eligible employees. To claim benefits of a treaty, an employee must have a visa and be a resident of one of the treaty countries. An employee can claim benefits for only one treaty at any particular time. Employees who want to claim benefits under a tax treaty must submit a written statement to their employer, along with applicable forms.

Use the Form 8233 Received and Form W8 Received options to indicate the employee's eligibility for reduced tax treaty rates.

Treaty Expiration Date	The treaty expiration date appears. The system calculates the date based on the date of entry and rules that are established on the Tax Treaty/NR Data table.
Form 8233 Received	If the NRA employee filed a Form 8223, select Yes and enter the appropriate dates in the Form 8233 Effective Date and From 8233 Expiration Date fields. Form 8223 is required for all income codes except 12 (royalties) and 15 (scholarships and fellowships).
Form W8 Received	If the NRA employee filed a Form W8 for scholarship and fellowship income or royalties, select Yes and enter the appropriate dates in the Form W8 Effective Date and Form W8 Expiration Date fields.

Setting Up State Taxes

Access the State Tax Data page (Payroll Interface, Update Payroll Information, Employee Tax Data USA, State Tax Data).

State Information

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

State	Enter 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 (unemployment insurance 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.
Exempt from SUT (exempt from state unemployment taxes)	Select to indicate whether the employee is exempt from SUT taxes.
SDI Status (state disability insurance status)	Select the employee's SDI status.

State Withholding Elements

Use fields in this group box to enter state-specific withholding information.

Special Withholding Tax Status	Specify the employee's special withholding tax status. The system calculates the withholding tax based on the value you select here and other factors. 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. Maintain taxable gross: This option is not used with Payroll Interface. No taxable gross; no tax taken: Select to indicate that the employee is exempt from FWT.
Tax Marital 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.
Withholding Allowances	Enter the number of allowances that the employee claims for SWT purposes. This number should match the number on the employee's state withholding allowance certificate. For states that have their own withholding allowances form, the system displays informational text explaining where this information appears on the state form.
Additional Amount andAdditional Percentage	Use these fields to indicate an increase (or, for certain states, a 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.
Additional Allowances	If applicable, enter any additional allowances that the employee claims for SWT purposes. For states that have their own withholding allowances form, the system displays informational text explaining where this information appears on the state form.

Arizona-Specific Page Element

AZ% of Federal Withholding

Enter the percentage of federal withholding that constitutes the Arizona state withholding.

California-Specific Page Element

The California Wage Plan Code group box appears only when the state is CA.

The California Wage Plan Code is used only by employees of the California Public Employees Retirement System (PERS)

Disability/Unemployment Plan

Select State/State (State Disability Plan and State Unemployment) unless instructed otherwise by your company's tax advisors.

Connecticut-Specific Page Element

CT Only

Indicate whether the withholding adjustment amount is an Increase or Decrease amount.

Indiana-Specific Page Element

IN Earned Income Credit

Select for Indiana employees who are eligible for Advance EIC payments and who have completed the Indiana Earned Income Credit Advance Payment Certificate (state WH-5 form).

Louisiana-Specific Page Element

LA Only

Indicate whether the withholding adjustment amount is an Increase or Decrease amount.

Mississippi-Specific Page Element

MS Annual Exemption Amount

Used only for Mississippi. Select to enter the annual exemption amount.

New Jersey-Specific Page Element

FLI Status (family leave insurance status)

Indicate the employee's status for the New Jersey Family Leave Insurance tax:

Select Exempt if the employee's earnings are exempt from the FLI tax.

Select Subject if the employee's earnings are subject to FLI tax.

Select Voluntary Plan if the company has a voluntary family leave insurance plan that covers the employee.

Puerto Rico-Specific Page Element

PR Retirement Plan

(E&G) This check box is visible only if Education and Government is selected on the Installation table - Products page. Select to indicate that the employee is a participant in a government pension or retirement plan of the Commonwealth of Puerto Rico.

Lock-In Letter Details

Letter Received	Select this check box if a letter has been received from the state taxing authority that specifies the allowances an employee is allowed to take.
Limit On Allowances	Enter the maximum number of allowances possible. The value that you enter in Withholding Allowances field cannot exceed the value that you enter in this field.

Setting Up Local Taxes

Access the Local Tax Data page (Payroll Interface, Update Payroll Information, Employee Tax Data USA, Local Tax Data).

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.

Local Information

Use the options in the Location Information 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.

Local Withholding Elements

Special Withholding 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 this option if no special tax status exists. Maintain taxable gross: This option is not used with Payroll Interface. No taxable gross; no tax taken: Select to indicate that the employee is exempt from LWT. The taxable base for LWT will not reflect the pay that they receive
Tax Marital Status	Select the appropriate tax marital status for local withholding taxes.
Withholding Allowances	Enter the number of allowances that the employee claims for local withholding tax purposes.
Additional Amount andAdditional Percentage	Use these fields to indicate that additional local taxes are to be taken. You can specify both an amount and a percentage, if appropriate, provided that your payroll system accepts this information.

(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 non-indexed 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 – non-indexed 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	Definition 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 (Payroll Interface, Update Payroll Information, Employee Tax Data CAN, Canadian Income Tax Data).

Tax Information

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 non-indexed 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.
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.
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.
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 My Oracle Support. 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).
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.
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, deselect 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.
Cross Province	Select this check box to generate cross-province tax processing. The default for this check box is deselected. 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, deselect 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

Calculation 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.

Balances from Previous 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 this 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.

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 deselected, 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.

Setting Up Quebec Income Taxes

Access the Quebec Income Tax Data page (Payroll Interface, Update Payroll Information, Employee Tax Data CAN, Quebec Income Tax Data).

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.
QPIP Exempt (Quebec Parental Insurance Plan exempt)	Select if the employee is exempt from QPIP premium deductions.

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, deselect 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.

Note. To complete this information, the employee must complete the required government form (TP-1015.R.13.1–V).

Balances from Previous Company

For merged or acquired companies that have employees that worked in Quebec, enter the employee's year-to-date carryover amounts to the Quebec Pension Plan (QPP) and the Quebec Parental Insurance Plan (QPIP) in the appropriate fields in the Balances from Previous Company group box.

Note. Enter the federal portion of the year-to-date Employment Insurance premiums on the Canadian Income Tax Data page.

Setting Up Provincial Income Taxes

Access the Provincial Income Tax Data page (Payroll Interface, Update Payroll Information, Employee Tax Data CAN, Provincial Income Tax Data).

Province

Enter the employee's tax location province for calculating provincial income taxes.

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

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

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.

Important! 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.
Percent of 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.

Province	Enter the employee's tax location province for calculating provincial income taxes.
Prov Tax Credit Amount (TCP) (provincial tax credit amount)	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	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.