I am hoping someone can help with the situation we are facing. (Payroll Canada)
Issue is that when we pay an ee after payroll has exited, and we process an off cycle correction run, the expected result is for the amount that goes to pre tax deduction (/106) to reduce ee's taxable income (/102), but it is not, and ee is paying more taxes that he should.
ee's result before off cycle
I paid the ee $80 on IT15, so he can have money available for the deduction I created on IT14 $20 union dues, which is pre tax
off cycle. I will label the two results here RT1 and RT2
/101, /102 increased by $80 paid
/301 also increased here, but the pre tax ded wt I entered on IT 14 is not on this result, instead, it went into arrears on function PRDNT
function KATAX par ICTX for RT1
You can see that we have the new /102, but /106 did not update with the $20 pre tax ded wt. this means that ee will pay more tax than they should.
RT2. This is where the deduction takes place, but by this time, the taxes have already calculated on RT1. This defeats the purpose of it being a pre tax deduction because ee's /102 is not reduced by it.
Can anyone tell me if they have pre tax deduction wts set up on the arrears table T51P6?
If so, what combinations did you use? If you did not, did you set them up as regular deductions?
We have 2 types of WTs that cumulate into /106, and they are Pension Plan deductions, and Union Dues deductions.
These have no impact on /102, /103 or /104.
Since it is an "Off-Cycle" pay, the Tax engine will probably process the income as "Non Periodic Taxable Income" rather than as "Periodic Taxable Income", even if the WT usually cumulates into /102.
Since we never do Off-Cycle Pays (other than Year-End Adjustments using YANA), I can't analyse your problem easily, but if you do a Payroll Simulation with the "Display log" box checked, you should be able to drill down into the Tax Calculation.