A lot of our users run Canadian Payroll for one or more of our ten provinces. Occasionally they are asked to pay an employee in Quebec, the requirements in Quebec are not very different from the rest of Canada, but their differences are subtle enough that they need some special handling. Here is the quick and easy way to set up Quebec Payroll when you are already paying employees in another jurisdiction of Canada.
New Deduction Paycodes
Further Identification = Quebec Tax
Further Identification = CPP/QPP
- PPIP (If required)
Further Identification = PPIP
Set Up Employer ID
- Set up new Employer ID for Quebec business number.
Enter new QTAX and QPP codes in the Quebec section
Enter EI, TAX and CPP code
Note: CPP is still required even though it is not being calculated.
Enter PPIP information if required.
Set Up Employee
- Select QC as Taxable Province
- Enter/select new Employer Number
- Click the TD1 Values button
- Ensure the following flags are set to YES
Print a T4 Slip for Employee
Employee Pays CPP/QPP
Employee Pays EI
Employee Pays PPIP (if required)
- Click the Quebec TP1015-3-V Values
Ensure Employee Pays Quebec Tax and Print a R1 Slip for Employee are set to YES.
Ensure the TP- TP1015-3-V Values are correct
Note: This is where Additional Tax Deduction amounts can be added.
Note: Federal Tax is set up the same for all employees, under the Tax Credit button
- Open each taxable income code and ensure Quebec Tax Applicable is set to YES
- Ensure PPIP Applicable is set to YES if required.
Note: Income Tax Applicable, CPP/QPP Applicable, EI Applicable are also set to YES.
Note: You will notice, as soon as you set this income code to Quebec Tax Applicable the Releve 1 Primary Box # will populate.
Note: You can continue to use the same codes as your other provinces, provided the account number is the same.
In some cases, benefits may not be Federally taxable but they are applicable to Provincial tax in Quebec. An example would be Group Medical benefits. In these cases, your existing benefit codes can be adjusted to only calculate Quebec tax. Ensure also you adjust any offsetting codes.
- Open the benefit code
Note: In the example below, this code would be subject to QPP and Quebec tax.
- Ensure the flag for Quebec Tax Applicable is set to YES.
- Ensure CPP/QPP Applicable is set to YES.
Note: If this is a taxable benefit then QPP calculations are also required.
- Click Save.
Note: When your Income Tax Applicable flag is set to NO, it will appear that Quebec Tax Applicable is 0.0000%. However, when you save this code and reopen it, the percentage will change to 100.0000%
No setups are required for reporting. All T4s and R1s that are applicable will print.
- Each Quebec employee receives a federal T4 slip and a provincial RL-1 slip.
- The slips summarize the total taxable income and statutory deductions.
EI premiums are a federal withholding requirement but total premiums withheld for a Quebec employee are still reported on the RL1 slip.
QPP contributions and QPIP are withholding requirements in Quebec but premiums are reported on both slips.
Income tax withholdings will show separately: federal tax on the T4 slip and provincial tax on the RL1 slip.
Note: You do not need to worry about this as it will happen automatically during your year-end process. Both T4s and R1s will populate accordingly.
Due to the differences mentioned above, employment income on a Quebec employee’s T4 and RL-1 can be different amounts.
At Year-end close, Microsoft will provide an R1 Authorization Number, along with the Tax update. This number indicates that GP computerized system files are acceptable.
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