Period-to-Date Aggregation

Period-to-date aggregation provides the functionality to tax multiple payments of regular earnings in the same pay period, with the resulting taxes as if the payments were combined as one.

Within a pay period, the new tax engine aggregates regular earnings (including previous payments in the current period) and calculates the full pay period taxes on the aggregated earnings. From the resulting tax amount, it subtracts the taxes previously deducted for regular earnings in the current period.

The benefit is that multiple payments of regular salary, in the same pay period, are taxed as if they were paid in a single payment, thereby not under deducting taxes.

Note: Both Federal and Quebec taxes are impacted by PTD aggregation.

Example:

A semi-monthly paid employee in Ontario receives $3,000 per pay. As a result of that single payment, the employee pays $561.83 in Federal/Provincial taxes.

Without Period To Date aggregation, if that same employee receives two payments of $1,500.00 regular salary in the same pay period, each of those payments have approximately $171.55 in Federal/Provincial taxes deducted for a total pay period tax contribution of $343.11.

The reason for the under deduction of taxes is that the individual tax calculations of $1,500.00 income ‘expect’ an annual salary of $36,000.00 ($1,500.00 * 24), which is in a lower tax bracket than an annual salary of $72,000.00 ($3,000.00 * 24).

With Period To Date aggregation, the first payment of $1,500.00 results in a tax deduction of $171.55, however the second payment deducts $390.28 ($561.83 – $171.55) thereby treating the aggregation of the two payments as if they were a single payment.

Note: The CRA PDOC tool assumes each payment is the only one in the pay period, so PDOC results will not match the new tax engine results in this case.

Enabling and Disabling Period-to-Date (PTD) Aggregation

By default, the PTD aggregation is disabled. You may choose to keep the feature disabled. If PTD aggregation is enabled, and the employee exceeds earnings limits, they are taxed more. Even though this is more accurate, it may not be desirable in all cases.

You can configure the feature at the payroll statutory unit (PSU) or tax reporting unit (TRU) levels, on the organization calculation card. If you set PTD aggregation at the PSU level, it applies to all TRUs associated with the PSU. You may also set the feature at the TRU level to override the setting at the PSU and have different settings for different TRUs.

Follow these steps to enable or disable PTD aggregation at the PSU level:

Navigate to Legal Entity Calculation Cards and enter the Effective As-of Date.
Select the Calculation Rules for Tax Reporting and Payroll Statutory Unit calculation card.
Select the Federal component group and select the Federal Tax calculation component
In the Federal Tax > Calculation Component Details, click Actions > Edit > Update
In the Enable Period to Date Tax Calculation field, select Yes or No.

Follow these steps to enable or disable PTD aggregation at the TRU level:

Navigate to Legal Reporting Unit Calculation Cards and enter the Effective As-of Date.
Select the Calculation Rules for Tax Reporting and Payroll Statutory Unit calculation card.
Select the Federal component group and select the Federal Tax calculation component.
In the Federal Tax > Calculation Component Details, click Actions > Edit > Update
In the Enable Period to Date Tax Calculation field, select Yes or No.