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rmdezz
March 12, 2019
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Help please: I want to set up an employee to have a monthly RRSP contribution deduction + matching employer portion. (Canadian)

  • March 12, 2019
  • 3 replies
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I need help to set up payroll items for a monthly RRSP contribution by the employee and also a matching contribution by the company.  This will be deposited into a separate account, not paid to employee

Best answer by NEVER

You may want to discuss with your accountant. I am not sure, but the Employee portion of the RRSP is an After Tax deduction (deducted from NET Pay). The Employer portion is Taxable Income (I think). This is where the difference may be.

3 replies

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NEVERAnswer
March 12, 2019

You may want to discuss with your accountant. I am not sure, but the Employee portion of the RRSP is an After Tax deduction (deducted from NET Pay). The Employer portion is Taxable Income (I think). This is where the difference may be.

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rmdezzAuthor
March 12, 2019
It is a bit complicated as it depends on the type of RRSP!  In this case, neither portion is taxable, and I seem to have the payroll items set up correctly (now, after some playing around), but the tax deducted is still slightly off compared to the PDOC.  It's a few dollars more than it should, so I'm not going to stress too much about it.  I did discuss with my accountant, but he is not familiar enough with Quickbooks to help me.  It appears to be a glitch in the payroll tax calculation as there is nothing else I can change to make any more difference.  I will be satisfied with this and move on!  I do appreciate your suggestions!
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NEVER
March 12, 2019
Not a glitch - QB uses the CRA Tax Tables, but calculates on a specific $ amount rather than a $ range. For instance, if an employee earns $2505.17 on each paycheque, QB would calculate the tax on the exact amount. CRA Tax Table would calculate that on an income range (like $2300 to $2800). Not exactly sure what that range might be - this is just an example.
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    NEVER
    March 12, 2019

    Create Payroll Items and add them to each Employee's Paycheque: 

    Create a Deduction type payroll Item called RRSP - Employee. Follow the prompts on the screen, making the appropriate selections in each screen.

    Create a Company Contribution type Payroll Item called RRSP-Employer, again completing all the selections as you go thru the screens.

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    rmdezzAuthor
    March 12, 2019
    Thank you, but I was looking for more specific information as to how to set up those items so that the correct amount of income tax was deducted.  I've played around and have gotten pretty close to what the amounts show when I use the CRA's Payroll Deductions Online Calculator.  Not exactly, but within a few dollars.
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