In Sage 50, salary and bonus are added and treated as gross pay. Even though it is presented as one single number as gross pay, they are still shown separately under the table of Income Tab of the paycheque window.

If there is no balance put under the “This Period” column for bonus, no bonus will be added to gross pay for calculation and it will not be repeated each pay period. I did a test and compared the difference between auto payroll from Sage 50 and the result from PDOC. As the screen shots presented, I do not find big discrepancy.

Typically Sage 50 Accounting's payroll tax amounts are within about $1.00 of the Canada Revenue tables. Small differences are to be expected because the manual tables and PDOC calculate based on an income range, whereas Sage 50 Accounting uses the exact income amounts for greater accuracy. The link below will provide you with more information when there is a difference between Sage tax and government tax calculation.

http://bit.ly/10Yslbm

For the extra bonus cheque issue mentioned in this thread, even though complied manually, if the extra cpp exemption is not taken into consideration and be avoided, cpp will still be underpaid. The workaround can found under the link below.

http://bit.ly/1910sEp

Clients’ opinions are always welcome as this is the cornerstone for us to make improvement and make better software which fits the needs of our customers. Please do not hesitate to give us your idea by going to Help, Contact Sage, Provide us your feedback in Sage 50.

In Sage 50, salary and bonus are added and treated as gross pay. Even though it is presented as one single number as gross pay, they are still shown separately under the table of Income Tab of the paycheque window.

If there is no balance put under the “This Period” column for bonus, no bonus will be added to gross pay for calculation and it will not be repeated each pay period. I did a test and compared the difference between auto payroll from Sage 50 and the result from PDOC. As the screen shots presented, I do not find big discrepancy.

Typically Sage 50 Accounting's payroll tax amounts are within about $1.00 of the Canada Revenue tables. Small differences are to be expected because the manual tables and PDOC calculate based on an income range, whereas Sage 50 Accounting uses the exact income amounts for greater accuracy. The link below will provide you with more information when there is a difference between Sage tax and government tax calculation.

http://bit.ly/10Yslbm

For the extra bonus cheque issue mentioned in this thread, even though complied manually, if the extra cpp exemption is not taken into consideration and be avoided, cpp will still be underpaid. The workaround can found under the link below.

http://bit.ly/1910sEp

Clients’ opinions are always welcome as this is the cornerstone for us to make improvement and make better software which fits the needs of our customers. Please do not hesitate to give us your idea by going to Help, Contact Sage, Provide us your feedback in Sage 50.

Keith,

Thank for your attention.  I also get identical results in Sage 50 and the PDOC when using the same numbers as you - a larger salary with a smaller bonus.  Please try it with the opposite - a $500 salary and a $15000 bonus.  I think you will find that you now get different results because the problem lies with the tax brackets and the small bonus amount in your example doesn't make an impact.

Clive

For the majority of payroll Keith's example is what most business' need. In my 25 years of doing payroll for many different types and sizes of business'  I have never seen an example like yours nor have I had to process one. I am sure it can happen but it would be a very rare.

Yes it would be great if there was a bonus section for the payroll, and as Keith stated provide Sage with feedback via the link Keith provided. Sage really does looks at those suggestions and they help shape what will happen in the program for future releases.

In the meantime I recommend that for the examples more like Keith's Sage works fine, name one of the Income lines as bonus and let Sage 50 calculate, but for the more rare examples such as yours then I would too check the amounts against the PDOC.

Jo Anne

Jo Anne

Thanks for your input.  I recognize that my example is extreme and that most users will never process a case like this.  However, the example only reveals the difficiency.  The same error will occur with less extreme numbers whenever it would artificially cross a tax bracket.  

In the least extreme cases where this error occurs, then all that would happen is a bit too much income tax would be withheld until refunded.  The threshold where this becomes unacceptable is subjective.

So yes, it would be nice if bonuses were fully supported by the payroll module and in the meantime bonuses will have to be checked against the PDOC.

Hi Jo Anne / Clive,

I am having the same issue here. We have a client that was given a $30k bonus with a $75k annual salary (24 pay periods). When I use Sage to calculate the bonus, the taxes are significantly higher than PDOC (about $3k).

I read that Sage is accurate and usually within a $1 compared to CRA calculations and that perhaps we shouldn't issue a separate paycheque when it comes to bonuses since the system will increase the number of pay periods.

Aside from the above, I can't find any other articles or explanation as to why Sage uses a higher tax rate than CRA when it comes to significant bonuses?

Thanks,
Krisie