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lakris
November 3, 2020
Question

HST on Employees Pay

  • November 3, 2020
  • 1 reply
  • 0 views

Hello, this may be a beginner question...

 

When our transaction record shows employees pay (the amount shows what the actual pay is after CPP, etc.) is this HST exempt or should it be zero rated or exempt?

 

Any help would be awesome. 

 

THANK YOU

1 reply

Rebecca R
Rebecca R
November 4, 2020

Hi there lakris,

 

Welcome to the QuickBooks Community! I'm glad you're here and that you've reached out for support. We were all beginners at one point and the only way to learn is by asking questions and trying things out, and you never know - somebody else might have the very same question. QuickBooks Online makes it easy to account for taxes on all applicable transactions, let me explain how you should handle your payroll transactions.

 

The Canada Revenue Agency is the best resource when it comes to what should or should not be taxed. I took a quick look and found this resource which explains that payroll isn't generally subject to GST/HST. Because the income tax, CPP and EI have already been deducted from the employee's pay, and it doesn't pertain to sales at all, the amount that you're accounting for in QuickBooks would be considered Out of scope. Here's more information on Common sales tax codes that you can refer to.

 

If you're not yet using QuickBooks Online Payroll, it's a great way to manage your business accounting all in one place. Our Payroll offering automatically deducts the correct income tax, CPP, and EI contributions based on CRA guidelines and records the transactions for you automatically after you run payroll. For more information on payroll, click here.

 

I'm here if you have additional questions. Have a great evening!

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