2 Replies Latest reply on Jul 9, 2016 6:53 PM by Ify Mosindi

    trasnfer all amount in pay in lieu to rrsp for Quebec ees

    Ify Mosindi

      Can anyone explain how they set up wage types in a scenario where an ee wants to transfer all of their pay in lieu into RRSP. We have 1 wt for the payment, and 1 for pre tax deduction to RRSP so that taxes can =0

      When we run payroll for the ees in Quebec, the system does not move all the money for the pay in lieu over to RRSP for ees because, EI and PPIP gets deducted before everything else.This is Revenue QC requirement.

      Can you share the cumulation and processing classes used?

      Can we cumulate the wt to /102 instead of /103?

      does QC pay in lieu go into /178?

      Also would like to know if there is a table in SAP RRSP contribution limit (according to CRA) is set up

      Any comments will be appreciated

      Thanks,

      IM

        • 1. Re: trasnfer all amount in pay in lieu to rrsp for Quebec ees
          Remi C. Corriveau

          We recently had a similar situation where a payment was deemed to be Insurable (for EI) and Pensionable (to CPP) but could be transfered whole to a RRSP.

           

          To start with your last question, no there is no constant giving the contribution limit to RRSP since that limit varies according to the employee's annual earnings and to his/her Unused Contributions.  Furthermore, the employee could be contributing to a RRSP outside of work, so it is the responsability of the employee to confirm (in writing) the amount to be transfered in RRSP and confirm that he/she has "room for it".

           

          As for Payroll Processing, since the Statutory Deductions must be taken from the Payment, it is best if you could give to the employee a detail of the Payment and Deductions so that he/she could provide money to cover the deductions, agree that the deductions should be taken from his/her regular pay, or agree to transfer only the Balance of the payment after deductions.

           

          Note that in our scenario, if the employee was entitled to a Payment of 5000$ but opted to transfer only 4300$ to RRSP in order to use the other 700$ to cover the EI an RPC Contributions, that 700$ became a Taxable Income.

          • 2. Re: trasnfer all amount in pay in lieu to rrsp for Quebec ees
            Ify Mosindi

            Thanks for your response Remi. I tried to look for documentation on how pay in Lieu should be treated if ee wants to move everything to RRSP, but did not find any. My client believes that a QC ee should be able to move 100% of their pay in lieu to RRSP just like severance, but from what you are saying, that is not to be done, because the stat deductions must come off first (please, correct me if I misunderstood your explanation)

            Can you point me to where I can find documentation on how to treat pay in lieu with intention of moving it to RRSP? If its the Guide TP-1015.G-V, Guide for Employers: Source Deductions and Contributions, do you know the page?