Balances to Initialize for Canada

Canadian Legislative Balances

Canada requires several balances, called Canadian Legislative Balances, to perform accurate tax reporting and payroll tax calculations. For example, balances are used for year-end reporting, Workers’ Compensation reporting, and so on. These balances are required to the extent that they apply to the employee. For example, if an employee does not participate in the retirement plan, the required balance Pretax Registered Retirement Plan is not needed for that employee.

Canadian Legislative or User-Defined Context Columns

There are six legislative or user-defined contexts, which must be populated if the balance dimension expects a value for these contexts. These contextual values are used because columns are not available to populate legislative or user-defined data. Instead, they require entry in the user-defined context columns as outlined below. For each context, there is a context name, and value. For example:

ContextOneName
ContextOneValue

Populate the context name attributes with the name of the context usage for that legislative or user-defined context, and the context value attributes with the actual value of that context.

Depending on the dimension, Canada may require one of these contextual inputs:

Statutory Report Type

Attribute Name	Value
ContextOneName	Year End Forms
ContextOneValue	[lookup code]. For example T4_RL1

Reference Codes

Workers Compensation

Attribute Name	Value
ContextOneName	Reference Code
ContextOneValue	WC_[Account Number]_[Classification Unit]

Provincial Medical

For Ontario, Manitoba, and Newfoundland and Labrador:

Attribute Name	Value
ContextOneName	Reference Code
ContextOneValue	PM_[Provincial Medical Account]

For Quebec only, there is no account for Quebec:

Attribute Name	Value
ContextOneName	Reference Code
ContextOneValue	PM_UNDEFINED

Involuntary Deductions

Attribute Name	Value
ContextOneName	Reference Code
ContextOneValue	The value of the support order number, or any unique number. For example, 123456.

Pension Registration Number

Used for year-end and element balances

Attribute Name	Value
ContextOneName	Statutory Reporting Code
ContextOneValue	The value of the pension registration number.

If the context you are populating is a lookup, populate the context fields in the following manner:

Context Name: Populate with the lookup type meaning
Context Value: Populate with the lookup code (not the lookup type meaning)

Note: In order to help clarify the relationships between the balances, these general statements apply.

Subject = Gross – Exempt
Reduced Subject = Subject – Pretax Deductions

Tax is calculated on the Reduced Subject. Also, the following applies to limit taxes.

Reduced Subject – Taxable = Excess

Additionally, in the case of limit taxes (for example, CPP, CPP2, QPP, QPP2, EI, QPIP), the taxable and withheld balances are capped by the annual limits. For example, in the case of CPP, the following balances stop at the annual limit:

CPP Employee Withheld
CPP Employee Taxable (represents a sum of the balances below, of regular and supplemental)
- CPP Employee Regular Taxable
- CPP Employee Nonperiodic Taxable

Statutory Report Type

Secondary classifications in Canada are associated with Statutory Report Types for end of year reporting for both earnings and deductions. These reporting types help determine how the earnings and deductions are reported to the Canadian Federal and Provincial governments. These reporting types are captured on a flex on the secondary classification. The values for this flex are:

T4/RL1
T4A/RL1
T4A/RL2

The Statutory Report Types are seeded for any secondary classifications that are seeded by the application. For those secondary classifications created by customers, the association to the Reporting Type must be created manually. This association is mandatory.

For the purposes of balance initialization, some of the dimensions require the statutory report type as one of the components of the dimension. This column is populated by use of the Context columns. The required entry in the user-defined context column is as defined as follows, where the Lookup Codes are defined as T4_RL1, T4A_RL1, or T4A_RL2.

Attribute Name	Value
ContextOneName	Year End Forms
ContextOneValue	[Lookup code]

Record of Employment Balances

Initialization of Record of Employment (ROE) balances is not supported. ROEs should be generated from the legacy system after the final payroll is processed, using the ‘Change of Service Provider” reason code. If an employee subsequently experiences an interruption of earnings, the ROE will report earnings starting with their first payroll run on Oracle HCM Cloud Payroll.

Vacation Liability Balances

If you process vacation liability, you may initialize the following balances for employees.

Balance Name	Dimension Name
Unprocessed Vacationable Earnings	Relationship Tax Unit Year to Date
Vacation Liability	Relationship Tax Unit, Plan Type Inception to Date
Vacationable Earnings	Relationship Tax Unit, Plan Type Inception to Date

For the purposes of balance initialization, some dimensions include a Plan Type component. This represents the Vacation Plan and Term. Populate the Plan Type component with the following value:

VA_<absence plan name>_YYYY_<absence plan ID>

YYYY refers to the vacation term year for which the vacation liability is processed. It is derived on the process/pay date. Employers may accrue liability in one year and allow employees to take vacation in the following year. Alternatively, they may accrue and allow vacation to be taken in the current year.

For example, VA_Vacation Plan_2018_123456789098765.

Quebec Labour Standards Balances

Employers with employees working in Quebec are subject to the Quebec Labour Standards (QLS) levy. Initialize these balances only if applicable.

If you are going live at any point other than the start of the tax year, for accurate QLS calculations and reporting, you must initialize the balances prior to running payrolls. Alternatively, you may perform balance adjustments at the end of the year.

For the purposes of balance initialization, the dimension required for QLS balances includes a Statutory Report Code component. This represents the Quebec Identification Number associated with the balance, and it is mandatory to populate.

Note: Depending on your unique requirements, you may require other balances to be initialized. You may need to initialize other balances separately that are part of QLS gross or QLS exempt earnings. Please see the Use Cases and Example Files section for QLS examples.

For additional information on the Quebec Labour Standards Report, refer to these documents:

Cloud Readiness What’s New Document:

https://www.oracle.com/webfolder/technetwork/tutorials/tutorial/cloud/r13/wn/wfr/releases/21A/21A-wf-rewards-wn.htm#F16474

Administering Payroll for Canada Guide:

https://docs.oracle.com/en/cloud/saas/human-resources/22c/faapc/index.html

Balance Name	Dimension Name	Notes
Quebec Labour Standards Gross	Relationship No Calculation Breakdown, Statutory Report Type Year to Date	The sum of these balances: Gross Earnings RL-1 Box A Adjustment RL-1 Box R Employment Income Adjustment Indemnities in Lieu of Notice Indemnities for Damages RL-1 Deferred Salary or Wages If any of these balances are initialized or adjusted, you must also adjust the Quebec Labour Standards Gross balance accordingly.
Quebec Labour Standards Subject	Relationship Tax Unit, Province, Statutory Report Type, Statutory Report Code Year to Date	The Quebec Labour Standards Gross - sum of these balances (which are exempt balances): RL-1 Employee Benefit Plan RL-1 Employee Trust Directors Fees Benefit for Amount Paid for Shares Commission or Committee Member Fees Quebec Employees Outside Canada Wages Parity Committee Employee Wages CCQ Employee Wages Heavy Equipment Operator Wage * .05 (Percent Remuneration not Subject) Other Labour Standards Exempt Remuneration
Quebec Labour Standards Exempt		Quebec Labour Standards Gross - Quebec Labour Standards Subject. Note: Although this balance is maintained, it is not displayed on the Quebec Labour Standards Report.
Quebec Labour Standards Taxable		Quebec Labour Standards Subject, not to exceed the annual maximum limit. For example, the 2020 limit is $78,500.
Quebec Labour Standards Excess		Quebec Labour Standards Subject - Annual Maximum Limit. This represents any amount of the Quebec Labour Standards Subject in excess of the annual maximum limit.
Quebec Labour Standards Liability		The amount calculated by applying the annual rate to the Quebec Labour Standards Taxable.
Benefit from Amount Paid for Shares		N/A
CCQ Employee Wages		N/A
Commission or Committee Member Fees		N/A
Director's Fees		N/A
Heavy Equipment Operator Wages		N/A
Indemnities for Damages		N/A
Indemnities in Lieu of Notice		N/A
Parity Committee Employee Wages		N/A
Other Labour Standards Exempt Remuneration		N/A

Tax and Year-End Balances

Please refer to the Tax and Year-End Balances for Canada technical brief on My Oracle Support (Doc ID 2562730.1) for the tax and year-end balances available to load for Canada. Also addressed in this document are the tax balances for prior contributions.