Understanding Tax Information for Canada

In JD Edwards EnterpriseOne Payroll, federal and provincial tax amounts are calculated by a third-party software package.

You set up tax area information for the locations in which employees live and work, and for the taxes that must be withheld. Quantum for Payroll Tax calculates tax, based on the information that you set up. However, the system calculates the employee-paid amounts even if you do not set up the tax area information.

This table describes the two tax information areas in Payroll:

Tax Area Component	Description
Tax area code	The tax area code is an identifying number that Vertex, Inc. assigns to all taxing authorities in Canada. The system contains all federal and provincial income tax area codes. The tax area code, called the GeoCode, consists of up to nine characters (XXYYYZZZZ) and three distinct parts. In Canada, the first two numbers (XX) identify the country (70), and the next three numbers (YYY) identify the province. The last four numbers do not apply.
Tax type code	The tax type code represents the type of tax that you are defining. These codes are predefined by the system. In Canada, for example, CA is for federal income tax and CC is for employee-paid employment insurance premiums.

In addition, the system provides two-digit statutory codes for provincial and federal income taxes.