How Province of Employment Works with Calculation Cards

The province in which an employee works affects their tax calculations. For example, if an employee lives in Ontario and works in Quebec, their payroll calculations are based on the Quebec taxation laws, and not of Ontario.

The new hire flow creates a calculation card as part of the flow. The province of employment is automatically set to the province from the location address of the assignment, if it's available. However you can override the work location of the assignment. Use the Calculation Cards task under Payroll to manually set the province of employment on the Tax Credit Information calculation card.

You must manually set the province of employment when configuring calculation cards in these instances:

• End dating the assignment associated with the default province of employment.

• If there are multiple assignments with different location addresses (of different provinces).

• If the location address isn't specified during the new hire flow.

Provincial Transfers

The province of employment is initially derived from the work location on the assignment. When an employee transfers provinces, the employee's work location and the province of employment on the tax card must reflect the new location.

Once the new location is updated on the assignment, the province of employment on the tax card is updated automatically by default.

When a change is made to the employee's work location, the province of employment on the employee's tax card is updated automatically, unless it's disabled. Once the province of employment on the tax card is changed, the tax calculation uses the new location to determine where the employee is taxed.

Note: After a provincial transfer, all retroactive earnings are taxed based on the current province of employment on the employee’s Tax Credit Information calculation card, as per legislative guidelines. Retroactive pretax deductions are also based on the current province of employment.

Province of Employment Outside of Canada

The employee's province of employment can be in the US or in any other country, designated as ZZ in the application. The payroll application supports the following features for employees whose province of employment is outside of Canada.

• Data Capture

  The province of employment on the employee's calculation card captures the province used for payroll and tax processing and is reported at year-end. The values in the province list of values in the calculation card are as given in this table.

  Country	Province Code
  United States	US
  Any Other Country	ZZ

• Tax Processing

  The US and ZZ province codes use the taxation formula 'Outside Canada and in Canada beyond the limits of any province or territory' for processing tax.

• Overrides for Workers' Compensation, Provincial Medical Liability, and Vacation Liability

  If an employee's tax card has a US or ZZ province code and their earnings be included in Workers' Compensation, Provincial Medical, or Vacation Liability calculations, override the province using the Payroll Relationship UI.

  • Select the province or the account, or both, to use for the Workers' Compensation or Provincial Medical liability calculations at the payroll relationship level.

  • Override the province for Vacation Liability calculations at the payroll relationship level.

• End-of-Year Reporting

  The province codes for US and ZZ are reported to the Canada Revenue Agency in Box 10 of the T4 (Statement of Pension, Retirement, Annuity, and Other Income) slip.

  Note: You can use the province codes in the Province parameter in the Run End-of-Year tasks to isolate them when you run the year-end processes.

  If these codes aren't available for selection, you must run the Maintain Canadian Geography task to create the new province records for these provinces.