Sales Tax for Canada
Some specific benefits have sales tax calculations performed on them if you have configured them as such to process sales tax. Sales tax calculations apply to these element classifications:
-
Taxable benefits
-
Employer liabilities
-
Voluntary deductions
These sections describe the factors that influence sales tax calculations.
Sales Tax Calculations
This table shows the calculated sales tax and whether they belong to Federal or Provincial calculations.
Level |
Sales Tax |
---|---|
Federal and Provincial |
Harmonized Sales Tax (HST)
|
Federal |
GST |
Provincial |
|
Configure Elements for Sales Tax Calculations
The element template contains questions if sales tax applies to the element created. The default answer for each sales tax is No. The sales tax types that apply are:
-
GST
-
HST
-
PPT
-
PST
-
RST
Your answer to the template question 'Should the tax be reported separately?', determine how the sales tax amounts are displayed on the Statement of Earnings and the employee's payslip, as given below:
-
If Yes, then the individual sales tax amounts are reported as separate line items on the Statement of Earnings and the employee's payslip.
-
If No, then the values for each sales tax for that element are combined with the element's base amount, and reported as one line item.
The default for the Report Sales Tax Separately option is Yes.
The following new input values exist on the base element related to sales tax:
-
GST
-
HST
-
PPT
-
PST
-
RST
-
Report Sales Tax Separately
Additionally, the application creates shadow elements for the main elements and the retroactive elements you create, to process sales tax. The shadow elements are:
-
<Base Element Name> Sales Tax Calculator
-
<Base Element Name> GST
-
<Base Element Name> HST
-
<Base Element Name> PPT
-
<Base Element Name> PST
-
<Base Element Name> RST Result
Balances
These are the balance types for the individual tax amounts:
-
<element name> GST
-
<element name> HST
-
<element name> PPT
-
<element name> PST
-
<element name> RST
Retail Sales Tax Calculations
The Retail Sales Tax on Insurance tax calculation considers the province of employment on the tax card, as well as the province of residence of the employee. If you configure both PPT and Retail Sales Tax for an element, the Retail Sales Tax calculates on the base amount plus the PPT.
The details of the sales tax calculations for Retail Sales Tax and exceptions if the province of employment is in Ontario, Quebec, or Saskatchewan are given below for the province of Manitoba. Employer-paid premiums relate to taxable benefits and employer liability elements, while employee-paid premiums relate only to voluntary deduction elements.
Province of Residence |
Province of Employment |
Employer-Paid Premiums |
Employee-Paid Premiums |
---|---|---|---|
Manitoba |
Manitoba |
Subject to Manitoba Tax |
Subject to Manitoba Tax |
Outside Manitoba |
Manitoba |
Exempt from Manitoba Tax |
Exempt from Manitoba Tax |
Manitoba |
Outside Manitoba |
Subject to Manitoba Tax |
Subject to Manitoba Tax |
Outside Manitoba |
Outside Manitoba |
Exempt from Manitoba Tax |
Exempt from Manitoba Tax |
Manitoba |
Ontario |
Exempt from Manitoba Tax |
Subject to Manitoba Tax |
Manitoba |
Quebec |
Exempt from Manitoba Tax Subject to Quebec Tax |
Subject to Manitoba Tax |
Manitoba |
Saskatchewan |
Exempt from Manitoba Tax Subject to Saskatchewan Tax |
Subject to Manitoba Tax |
Ontario |
Ontario |
Subject to Ontario Tax |
Subject to Ontario Tax |
Outside Ontario |
Ontario |
Subject to Ontario Tax |
Exempt from Ontario Tax |
Ontario |
Outside Ontario |
Exempt from Ontario Tax |
Exempt from Ontario Tax |
Outside Ontario |
Outside Ontario |
Exempt from Ontario Tax |
Exempt from Ontario Tax |
Quebec |
Quebec |
Subject to Quebec Tax |
Subject to Quebec Tax |
Outside Quebec |
Quebec |
Subject to Quebec Tax |
Exempt from Quebec Tax |
Quebec |
Outside Quebec |
Exempt from Quebec Tax |
Subject to Quebec Tax |
Outside Quebec |
Outside Quebec |
Exempt from Quebec Tax |
Exempt from Quebec Tax |
Workers' Compensation and Provincial Medical Liability
For taxable benefits, the workers' compensation and provincial medical calculations are processed on the combination of the taxable benefit and sales tax amounts, if applicable.