Hi Karen, you can just go into his previous payroll master records and reactivate him.  Give him a new start date and clear the termination date out as well. Ensure his tax rates is the 2026 rates.  Change any info like address etc. if he has new info such as wage rate as well.  

Hi Karen Forge, great question! In Sage 50, the recommended approach is to create a new employee record rather than reactivating the old one. Here's why and how:

It's important not to remove the termination date from the existing employee record, as doing so can cause inaccurate T4, ROE, and PIER reports.

Instead, follow these steps:

1. Keep the old employee record inactive — rename it by adding an "X" at the beginning of the employee's name to flag it as the old record
2. Create a new employee record for the rehired employee
3. Enter all new payroll using the new employee record
4. When needed, you'll be able to generate a second set of ROEs and T4s accurately from the new record

For full details, check out our KB article: How to rehire an employee that has been terminated?

Hope this helps! If you run into any issues, let us know. 

Sorry, Erzsi, but I can't agree with the 'recommended procedure' on this one.  Aside from the inconvenience of having to completely set up the returning employee as if they were brand new, there is the problem of potentially exceeding the CPP and EI limits for this person.  The CPP and EI maximums for the year are PER PERSON, not per employee record - and having 3 or 4 different 'employees' in the same year for the same person could mean that one or both of these limits is exceeded.

I realize that, in this specific case, Karen is looking at re-activating an employee who had not worked previously in this calendar year.  So, in this specific case, starting a new employee won't cause these problems...... but it would make me very nervous to have one procedure for re-activating an employee who was laid off in December and re-hired in February, vs one who was laid off in March and re-hired in June.

Maybe your comments work for the cloud version of Sage, I don't know... does the cloud version keep track of YTD CPP/EI for every 'employee' who happens to have the same SIN?

Hi C White , thank you for raising this — it's a genuinely important nuance and we appreciate you sharing it with the community.

You're absolutely right that CPP and EI maximums apply per person (SIN), not per employee record. In scenarios where an employee is rehired mid-year after having already accumulated CPP/EI contributions, creating a new employee record could result in the software restarting contributions from zero — potentially leading to over-deductions before the annual maximum is reached. Employees in that situation can claim back excess contributions on their T1 return, but it does create extra complexity.

In Karen's specific case, the employee had not worked at all during the current calendar year, so there are no prior year-to-date CPP/EI contributions to carry forward — which is why the "create a new record" approach works cleanly here without triggering that concern.

That said, you've highlighted a real gap in how the KB article is scoped. I've flagged this with our product team to review the article and add clarity around mid-year rehire scenarios where prior YTD deductions are a factor. We want the guidance to reflect all cases accurately.

Thanks again for contributing to a better resource for everyone in the community! 

Erszi

I agree with C. White.  I have never created a new employee record for returning employees.  I always add the Hire date, latest Termination date and ROE Code to the memo field (when I don't run out of room because the memo field is too small) and reset them to current Hire date or blank.

In addition to the employees not getting overpayments deducted, we are also concerned with the company's portion of EI and CPP that is paid.  It's a lot harder to get that back for overcontributions.

Also, one employee record, one T4 as well.  And you only get billed from Sage for one employee if you forget to inactivate the older employee record.

Knowledgebase articles should reflect one process, not a process for specific circumstances whenever possible.