FAQ - Taxable Benefits
I added a new taxable benefit, but nothing is deducted from the employee's pay. Why?
A taxable benefit is added to gross pay to calculate government deductions and contributions. No amount related to a taxable benefit is deducted. To check the amounts used to calculate government contributions and deductions, check the "Other amounts" tab for the employee concerned in Step 5 during Payroll Preparation. In the example opposite, the employee has a gross pay of $620.80 and a provincial-only taxable benefit of $125. The $125 benefit is added to the gross pay of $620.80 for total earnings subject to provincial government deductions of $745.80.
I added a new pay item (or deduction/taxable benefit). Do I need to specify for each employee the account to use to record this pay item?
No. If the General Ledger links were set up at the Employer level (Payroll menu, Settings / Employer / General Ledger Link button), they apply to all groups and employees in the company. If this pay item only applies to a specific Group, the General Ledger links can be set up and/or customized in the Group (Payroll menu, Groups button, General Ledger Link tab). And if the pay item applies to a single employee, customization can be done in the Employee's file (General Ledger Link tab).
What is the difference between a taxable benefit and an employee deduction?
A deduction is an amount that will be withheld from the employee's net pay to pay or reimburse an amount owed. A taxable benefit is a service or good that the employee benefits from without paying the costs. The value of this service or amount is added to the gross pay, and the applicable government deductions and contributions are calculated on the taxable benefit.
What are employer expenses used for?
Employer expenses are used to account for the expense incurred by an employer for the benefit of an employee. For example, when an employer matches an employee's RRSP contribution.
•The employee's share will be in an Employee Deduction
•The employer's share will be part of Taxable Benefits (so that the employee pays government deductions and contributions on this benefit)
•The employer's share will be recorded if an Employer Expense is defined for this employee