2024 Changes to Canadian Payroll for Dynamics GP

The year end tax update for Dynamics GP hasn’t been released yet, but this article covers what we know at this time. We will continue to update this blog as more information becomes available.

There are minimal changes from last year. While tax credits and some tax brackets have changed, the significant changes happened last December, so we don’t anticipate any unusual challenges this year. Additionally, there are no new report or form changes this year.

The target release date for this update is December 20, 2024.

The T4127 was released, and you can find it here: T4127 Payroll Deductions Formulas.

For Basic Personal Tax Credits effective January 2025, please refer to: New Tax Rates and New EI & CPP Rates for January 2025 

Here Are the Changes That Microsoft is Working on:

CPP2

YAMPE (Year’s Additional Maximum Pensionable Earnings) will change from approximately 7% to 14% of YMPE (Year’s Maximum Pensionable Earnings).

Alberta

There will be a 2% annual increase to benefits following a new bill that would use the lower of 2% or the current Alberta Consumer Price Index. The current year is 2.9%, so the lower 2% rate will be used.

Manitoba

Manitoba is now using a graduated BPAMB (Manitoba Basic Personal Amount) that will be reduced for incomes between $200,000 and $400,000 and reduced to zero for incomes over $400,000.

Nova Scotia

Nova Scotia is changing the method for increasing annual indexing. This will affect income tax brackets and some non-refundable tax credits.

PEI

PEI is changing tax rates for all tax brackets.

Doing Tax Updates

If you are doing your own Tax update, please see our 2024 Year End Payroll Procedures document for updating tax credit amounts and running T4s.

Canadian Payroll 2024 Tax Update T4 XML Submission Errors

When submitting the T4 XML file to the CRA, you might encounter error messages similar to the ones below:

Error #1 – Transmitter Account Number

‘Error: We are unable to process your submission because the transmitter CRA account number given in the attached T619 electronic transmittal record does not match the account number you used to sign in.’

This is happening because the Business Number is missing from the file, which is a new requirement from the CRA.

To fix this issue, follow these steps:

1. Open the XML file in Notepad.
2. Search for <TransmitterAccountNumber>.
3. Below this line, replace the tag with one of the following:
   • <bn9>MMXXXXXX</bn9> if your business number is 9 digits and you are signing in using My Business Account (MyBA).
   • <bn15>MMXXXXXX</bn15> if your business number is up to 15 alphanumeric characters and you are signing in using MyBA or Web Access Code (WAC).
4. Add your business number between these tags. It should look similar to this:
   • <bn9>123585635RP0001</bn9> or <bn15>123585635RP0001</bn15>.
5. Save the file and resubmit it to the CRA.

Before:

After:

Additional Notes:

• Most files will use the <bn15>MMXXXXXX</bn15> tag.
• The number MMXXXXXX represents the Transmitter Number entered in the Payroll Electronic Transfer T4 window.
  • Routine > Payroll > T4 and R1 Print >Electronic T4’s

• If you have multiple Business Numbers, ensure you use the correct one.
  • From the HR Payroll page, go to Setups > Payroll > Employer. Select an Employer ID:

This change is due to the CRA updating the file requirements. See the image below for additional tags:

Error #2 – Transmitter Representative ID

“Error: We are unable to process your submission because the representative ID given in the attached T619 electronic transmittal record does not match the representative ID you used to sign in.”

This error occurs when a third party is used to submit your XML file. The MyBA account/RepID used to sign in must match the RepID provided in the T619 section of the XML file. If the RepID does not match, the file will be rejected.

To resolve this issue, follow these steps:

1. Open the XML file in Notepad.
2. Locate the tag called </T619>. Note that the T619 section should start on the third line of the file.
3. Between the tags </CNTC> and </T619>, add the following lines:

<TransmitterRepID>
<RepID> XXXXXXX </RepID>
</TransmitterRepID>

Replace XXXXXXX with your 7-digit Transmitter Rep ID for the Representative.

This is the information provided regarding this new requirement on the CRA site:

For more details on this new requirement, you can refer to the CRA website:

• Complete XML Schema for T4s
• What’s New for the T619 section

New T4 Requirements, 2024 Tax Year for Code 94 & Code 95 Regarding Tax-Exempt Employment

CRA Announcement

CRA has (very quietly) announced that effective this tax year, employers are required to report RPP contributions and Union Dues on tax-exempt employment income.

Any company with tax-exempt employees are now required to populate the following extra boxes:

• Code 94 – Indian Act (exempt income) – RPP contributions

Report only RPP contributions relating to tax-exempt employment income you paid to your employee who is registered, or entitled to be registered under the Indian Act using code 94. The amount of the tax-exempt employment income you paid is the amount reported using code 71.

• Code 95 – Indian Act (exempt income) – Union dues

Report only union dues relating to tax-exempt employment income you paid to your employee who is registered, or entitled to be registered under the Indian Act using code 95. The amount of the tax-exempt employment income you paid is the amount reported using code 71.

Please see the CRA website for further information.

Inside Dynamics GP

While the income codes work for boxes 69, 71, and 88, the codes do not work for boxes 94 or 95.  You will need a workaround to report your RPP and Union Dues for these tax-exempt employees.

Here is a sample you can use to write a script that will work for your company:

UPDATE CPY40101 set PT4BoxNumbers_6 = AA, PT4BoxAmounts_6 = BB.BB000 where PEmployeeID = ‘CCCCC’ and PEmployerNumber = ‘DDDDD’ and PTaxableProvince = ‘EE’

Where:

• AA = 94 or 95
• BB = The amount of the benefit
• CCCCC = The Employee ID
• DDDDD = The Employer ID
• EE = The taxable jurisdiction

In this script, I am updating PT4BoxNumber_6, to ensure I don’t over-write any other extra boxes. If you have tax-exempt income, you will be using at least one other extra box.

You can set this script up in Excel and run it for all employees at one time.

Once this script is run, you can go to the Routines > T4 Edit > Other Information button to see the changes.

Note: Once this window is updated, you cannot Recreate the T4s.

The T4 will now reflect those changes.

Running Payroll in 2025

Since we can not set up boxes 94 or 95 in GP, I would suggest the following:

• Set up some benefit codes to track these amounts (benefit and offset). One for non-taxable RPP and one for non-taxable Union Dues. At the end of the year, use these amounts to run reports to acquire the amounts for these boxes. After the year is closed, we can then run a script to update these boxes again for 2025.
• We are expecting Microsoft will fix this in the mid-year tax update. At that time, you can update the codes you have just created and import a manual batch to update the amounts for the year.

If you require assistance with your Tax Update, please contact Encore as soon as possible.

If you have any questions about Canadian Payroll in Dynamics GP, feel free to get in touch with us.