Bonus payment

SOLVED

Hi,


I have a question regarding bonus payment.
There is  a person received bonus check, $500. and It was paid on different date from regular salary.

Her regular salary is $1000 .She receives the amount on 15th and at the end of the month.

When I made the bonus cheque; I just entered  $500.00 as a bonus.into simply accounting. I didn’t calculate CPP EI Tax manually.

Was I make a mistake ?

There is one more regular paycheque to make ,until the end of the year. Do I need to adjust CPP EI Income tax  when I make the next cheque?  If so, how?

Is there anyone who could advise me?

Parents
  • +1
    verified answer

    Hi Kuku,

    Yes not calculating CPP and taxes manually was an error.  You need to calculate CPP without deducting the exemption amount that is allowed each pay period.  You should have deducted $26.25 CPP from her cheque.  (500 * 5.25%)
    The taxes are more difficult to calculate.  I like to use the CRA Online Payment Deduction Calculator when I'm doing bonus payments to employees.  You can find it here
    https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/payroll-deductions-online-calculator.html

    Sage does not calculate taxes or CPP correctly on bonus payments.

  • 0 in reply to A. Kinneard

    Hi thank you for your reply.

    I have a question .

    this is about CRA online calculator when I calculate deductions in bonus payment.

    1 Should I select  “salary “  for the type of calculation when I use  CRA online calculator ?

    2. if I were to choose “salary” , which pay period should I choose in salary calculation step 1 of 3 

    Normaly ,she receives semi monthly . But this bonus is extra . She receives paycheque 25 times this year.

  • 0 in reply to kuku

    You need to select salary and enter her normal bi-weekly payment.
    Then you need to enter 24 payments a year, then on the next screen you need to select bonus, when you get to the end it will tell you all the deductions for the regular pay plus the deductions for the bonus

    There are help features available at the calculator that can walk you through it.

    If you are responsible for payroll yourself for your organization I recommend you join and consider certification at the Canadian Payroll Association (www.payroll.ca)

Reply
  • 0 in reply to kuku

    You need to select salary and enter her normal bi-weekly payment.
    Then you need to enter 24 payments a year, then on the next screen you need to select bonus, when you get to the end it will tell you all the deductions for the regular pay plus the deductions for the bonus

    There are help features available at the calculator that can walk you through it.

    If you are responsible for payroll yourself for your organization I recommend you join and consider certification at the Canadian Payroll Association (www.payroll.ca)

Children