SAP Canada - Federal & Provincial taxes - Bonus payment during regular payroll

[former_member185000]

Hi All,

This is regarding the Federal and Provincial tax calculations when employee has been paid bonus during a regular period for hourly based employees.

1 /101 Total gross0101 952.52

1 /102 Regular tax0101 452.52

* /102 Regular tax0101 2.30

1 /103 Non-per. ta0101 500.00

When employees are paid bonus (IT0015) along with hourly wages, system is including it in the tax calculations, however, system is considering a different amount for calculation of Annualization for taxation of non-periodic payments.

Hourly wages - $452.52

Bonus - $500

However,for calculation of Gross remuneration for the pay period (I) - $1534.82.00

I've looked in to the CRA calculations and could not determine how this is being considered and also verified the processing of these wage types.

Attached is the screenshots for reference.

Thanks

[former_member565594]

Did you ever get the correct answer to this? I am facing the same issue.

[former_member193210]

The Employer's Guide to Payroll Deductions in Canada is available at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4001.html

and SAP follows one of the accepted methods.

If you do a Payroll Simulation, with the "Display log" box checked, you will be able to drill down into that log to see how the system calculates the Income Tax.

Double clic on Function KATAX with Par1 = ICTX to see all the inputs and calculations.

Note that the previous earnings are considered, the current pay's "regular" taxable earnings and some Tax Deductible Deductions (such as Pension Plan and Union Dues) are annualized, and the "bonus" payment is also considered in the calculations.

[Former Member]

Hi ,

Check with the below post , Might the examples mentioned overthere will slove your query.

https://wiki.scn.sap.com/wiki/display/ERPHCM/Income+Tax+Wage+Types

Thanks,

Chaitanya