Adjusting CPP & EI Overpayments into Tax Deduction before Printing T4

SOLVED

A new company I am working on was told by CRA to continue deducting CPP & EI from employees even after they had reached the yearly maximums.  I have been directed to shift these overpayment amounts into Income tax deducted before printing the T4s.  What would be the best way to go about this?  This is for 2023 and we are working in 2024.

  • +1
    verified answer

    Hi Beth, the easiest way is to pick a previous pay run before the new year and adjust the CPP to zero and add it to the tax line.  Make sure that you check the net balance of that run BEFORE you start, and then after your change, make sure your Net Balance is the same as before you began.  I print off the pay stub and add attach it to my Payroll Year End papers for backup. Now this is also going to change what you owe to CRA as CPP also adds in the Employer portion, reversing that reverses both sides, and of course Income Tax does not have a Employer Portion.