Setting Up a Tax-Deferred Compensation Deduction

Access the Basic DBA Information form.

1. Complete the steps for setting up essential DBA information and click OK.

2. Click Cancel to close the Basic DBA Information form.

3. On the Work With PDBAs form, locate the deduction that you just added, and then click Select.

4. On the Basic DBA Information form, select Canadian Leg/Reg from the Form menu.

5. On the Canadian Legislative/Regulatory form, select an option:

   • Union Dues

   • Registered Pension Plan

   • Registered Pension Plan (No Withholding)

   • Group Term Life

   • None of the Above.

6. To indicate that the current pay-period amount of employee-paid CPP or QPP contributions should be used to reduce the current pay-period Registered Pension Plan deduction, select the Should CPP/QPP be deducted? option and then click OK.

   • Union Dues, Registered Pension Plan, and Registered Pension Plan (No Withholding)

     Enter a user defined code that enables Vertex to use current tax laws in various jurisdictions to determine whether a DBA is pretax for a specified tax area.

     The 401 option specifies all deferred compensation plans (401k, 403b, 408k, 457, and 501c). The 125 option specifies Section 125 plans. Specifying either of these options eliminates the need to set up tax-exempt status in the system or to create multiple deductions to accommodate pretax status in certain states.

     For Canadian applications, these options are available:

     • RPP (Registered Pension Plans)

     • RPN (Registered Pension Plan (No Withholding))

     • RRSP (Registered Retirement Savings Plans)

     • UN (Union Dues)

       For the U.S. and Canada, the GTL option specifies the Fringe Benefit for Group Term Life.

     • None of the Above.

       Enter a user defined code (07/PB) that defines the value upon which the system bases the employee's pay. H, hours worked, is the default value. Other values exist for tip and piecework processing, and for Canadian lump-sum amounts, irregular commissions, and bonuses. Use E, estimated pay, for an advance pay interim check. The Interim Check program (Format 2) automatically deletes this type of timecard so that you can enter the actual time when it is known.

       To calculate taxes correctly, you must indicate whether the pay type is for a lump sum payment, an irregular commission payment, a bonus payment, or none of the above.

     • Should CPP/QPP be deducted? (Should Canadian pension plan/Quebec pension plan be deducted?)

       Enter a user defined code (07/DB) that indicates whether the current amount of employee-paid CPP or QPP contributions should be used to reduce the registered pension plan deduction for this particular DBA.