This lesson will discuss how to work with payroll Deductions and Benefits in eNETEmployer. The lesson will focus primarily on non-statutory Deductions that are setup by your company. There are many examples of these types, such as dental plan premiums, life insurance premiums, pension contributions, union dues, garnishee orders, and so on.
Statutory deduction amounts, such as Income Tax, CPP, E.I., Premiums, etc., are automatically calculated by the program and do not require any added setup.
In many situations both deductions and benefits are related. Therefore when you create a Deduction item in eNETEmployer, a corresponding Benefit item is also created, and vice versa. You then have the option of utilizing the deduction only, the benefit only, or both.
To begin, choose the Current Payroll - Deductions menu command. This opens the Deductions page that allows us to enter our company's non-statutory Deductions - amounts that are subtracted from the employee's pay by the company.
Deductions can be calculated based on a Function, Individually, or as a Fixed Amount. Each row also contains a Carry Forward Year End Balance option for specifying whether the deduction's year-end balance should be carried forward to the subsequent year, as opposed to zeroing out the balance at year end.
Section - Create a Deduction
To begin defining the settings for a new deduction, select the New button, enter a name for the deduction, and then place a check in the As Deduction cell to instruct the program to calculate the deduction in the current payroll. Place a check in the Before Tax cell to indicate that the deduction will be made before the employee's tax is calculated.
The RRSP Deduction will need to be calculated based on a Function. Therefore, click on the drop down list and choose the By Function option to specify the deduction's calculation method.
With the method chosen, you must now create an associated function. However, since we have not yet created an RRSP Function that will be associated with our new RRSP Deduction, we will leave the Calculate Function cell with the default setting while we move to the Functions page to create the associated function.
Section - Creating a Function
Move to the Functions page by choosing the Current Payroll - Functions command, and then select the New button. Enter RRSP Deduction into the Function cell, then select the Add Variable button three times.
Set the Items for the four variable rows to Earning Regular, Statutory Pay, Salary and Commission, and then move to the Expression cell and modify the expression to read (x1 + x2 + x3 +x4)*.04. This function will take the sum of the four variables for each employee, and then multiply the result by 4%.
Return to the Deductions page and apply the new function by selecting the RRSP Deduction function from the drop down list in the Calculate Functions column.
Section - Modifying a Benefit
In our demo payroll, we will also be utilizing the Benefit portion since the employer will be matching each employee's contribution amount. To edit the required benefit settings, move to the Current Payroll menu and choose the Benefits command.
When the page appears, double-click on the RRSP Deduction row, and then place a check in the As Benefit cell. This signifies that the program should include the benefit portion in the payroll calculations.
Next, T4-4- Other Taxables option from the T4 Box Benefits cell's drop down list. Then move to the Subject To cell and place a check in all of the boxes except for Quebec Tax.
Next, we will move to the Calculate Benefits cell and choose the By Function option to specify, and then apply the appropriate function by choosing the new RRSP Deduction function in the Calculate Function cell.
This completes the procedure for defining a Deduction and its associated Benefit in eNETEmployer. Although this particular deduction used a straightforward function that multiplied the sum of an employee's earnings by a set percentage, keep in mind that you can create complex deductions by using the Functions page to define intricate formulas through the use of If statements and other operators, such as MinN, MaxN, Sum, Sqrt(), and so on. For detailed descriptions of this feature, you can open the Online Help system by pressing F1 on your keyboard, and then browsing to the Functions page.