Payroll Canada Year End 2023

[jonasben]

Payroll Canada Year End 2023

Greetings from SAP HCM Canada Support team!

On this blog we will share news, important Notes and changes related to Canada Year End 2023.

If you have questions about 2023 Canada Year End, please ask away with a comment to this post.

Legal Changes for Canada

To review the planned Legal changes for Canada, check the Announcements of Legal Change application. See how to use this tool on this blog.

You may also set e-mail notifications for new PY-CA notes. See how on below article:

2478289 - How to set up notifications for SAP Notes and/or KBAs with Expert Search filters

ASUG Webcast

SAP HCM Canada Payroll and Tax Reporting Year-End Update 2023

Date: November 8, 2023
Time – 11:30 Pacific time (14:30 ET); Duration: 1.5 hrs ( 1 hour 30 minutes)

Register at ASUG > Events > SAP HCM Canada Payroll and Tax Reporting Year-End Update 2023

Main SAP Note and minimum mandatory HRSP for Year End 2023

3373115 - Main note for Canadian year-end 2023

The minimum mandatory HRSP for Canadian Year End in fiscal year 2023 is specified in the above Note, according to the software release.

The system must be updated to the minimum required HRSP to work correctly.

If you face an issue that is caused by not having the minimum HRSP, we will suggest the HRSP upgrade.

CPP additional contributions to be treated as a deduction at source - second part

As announced in the Legal Change Announcements application [CPP 2023] [CPP 2024], in 2024 a year's additional maximum pensionable earnings is introduced.
See more in CRA page "What is the CPP enhancement".

The SAP Note below delivers the required changes for Option 1 published by CRA:

3334052 - YE23: CPP/QPP second additional contribution

All Notes that follow will be mentioned in Year End Main Note.

Reporting a tax calculation issue

In case you identify issues with tax calculation, please report a case and provide your analysis as per the approach below:

3314325 - How to report tax calculation issues in SAP HCM Canada?

We do not accept comparison with PDOC, as this calculator cannot simulate all aspects of payroll of SAP HCM.

2658386 - Differences in tax calculation between SAP and CRA PDOC

Frequently Asked Questions

1. New Wage Types in your system after upgrading to the minimum required HR Support Package: /314, /315, /3F2, /3F3, /3F4, /3F5, /3P2, /3P3, /3P4, /3P5These Wage Types were introduced in HRSP via SAP Note 3345263.
   They are part of enhancement for tax calculation based on Province of Residence.
   This enhancement was not yet released. The purpose and significance for each WT will be in the SAP Note


2. Will SAP deliver the changes to T4 slip regarding boxes 16A, 17A and 45A?
   
   Yes, required legal changes will be delivered in time for testing and publishing of T4 slips.
   The Legal Change announcement was already published by SAP, you can check the planned delivery date: T4 -- T4AThe necessary changes will also be delivered for Relevé slips: RL-1 -- RL-2


3. Will Form RR-50: Election to Stop Contributing to the Quebec Pension Plan or Revocation of an Election be delivered by SAP?
   
   Yes. The Legal Change Announcement was already published [LINK]
   The Note was also already released: 3398689 - YE23: Election to stop contributing to the QPP or revocation of an election


4. Factor I (Gross Remuneration for the pay period) is wrongly calculated after HR SP upgrade
   
   This happens due to missing configuration, please read KBA 3396530 - Factor I is wrongly determined in KATAX ICTX


5. Why are boxes 16A and 17A not being filled in T4 2023?
   
   Boxes 16A and 17A will only be populated for fiscal year 2024 onwards.
   You can confirm it in this CRA page: [LINK]


6. New boxes 16A, 17A and 45 are not even displayed in new form. Why?Check and ensure you have the constant YENFF set up with YES in view V_T5F99K2.
   This will enable system to look for PDF form instead of SAP Script form.
   
   2911945 - YE19: T4/RL printing as SAP Script instead of PDF forms 


7. New Wage Types /316 and /317 do not have text in French.Translations are available through the respective HR Support Package.
   If the Wage Types were delivered via Note and not HRSP upgrade, it is expected that translation is not available.


8. PIER report does not show CPP2 / QPP2 separately and calculates deficiency
   
   As per SAP Note 3410650 , the changes for PIER report to include second additional CPP/QPP contribution are under evaluation and not yet delivered.
   
   At this point, the requirements for PIER report are still not clear, as the PIER process for CPP2 and QPP2 are only relevant at the end of 2024.
   
   A change to the PIER report is planned for delivery in 2024, subject to clarification of the requirements from the CRA.
   At this time, the requirements are being actively reviewed.
   
   Information about the changes will be communicated through the standard channels, either through Notes or Legal Change notifications.

Questions and feedback

This is the first blog edition of Payroll Canada Year End.
In previous years we used KBAs for this purpose.
Your feedback and constructive criticism are appreciated.

As already mentioned, feel free to comment on this post if you have questions about 2023 Canada Year End.

Kind regards,

Jonas and Claudia

[graziela]

Thank you, Jonas and Claudia for creating the blog!

[ChandraV]

FYI - Canada YE 2023 ASUG Webcast is scheduled for Nov 8. Register here -

Thanks

Chandra

[MPGraziano]

According the HR Schedule it looks like specifically for S4 1809 the YE stack is to be released CW 42.  The question is HOW will we know when exactly SAP finally releases? The only method we are aware is to keep checking the marketplace OR go thru maint planner to see if the stack which currently shows to be Stack #10 release April 2023 has increase and shows a stack current to Sept/October

Your advise appreciated

 

Maria

[jonasben]

Hello Maria,

From SAP HCM point of view, we can point which HRSP are needed and the respective release date (available in  SAP ERP Human Capital Management Support Package Schedules).

Unfortunately, I am unable to advise you on the S/4HANA stack release date. This is a topic strange to PY- components.
Gathering from what you mentioned, though, it looks to be Calendar Week (CW) 42, which is 15th-21st of October.
If you need to check exact date, I recommend you create a case for our colleagues in BC-UPG-OCS

Regards,

Jonas

[ChandraV]

We have applied the recent support packs (till HRSP C4) and found in our QA box the following new wage types for Canada - can anyone provide background details of these wage types or the note that introduced these or references these? we couldnt find anything on the launchpad search.

/314	Income tax/regular aux
/315	Income tax/non-per. aux
/3F2	Fed. Income tax/regular
/3F3	Fed. Income tax/non-per.
/3F4	Fed. Income tax/reg aux
/3F5	Fed. Income tax/nonp aux
/3P2	Prov. Income tax/regular
/3P3	Prov. Income tax/non-per.
/3P4	Prov. Income tax/reg aux
/3P5	Prov. Income tax/nonp aux

Thanks
Chandra

[jonasben]

Hello Chandra!

The WTs were introduced in SAP Note 3345263 - PY-CA: Technical enhancements for Payroll Driver Canada

These WTs will be used for tax calculation based on Province of Residence. This enhancement was not yet released. Once it is released, the purpose and explanation for each one will be in the SAP Note.

[xavier_joseph]

We applied SAP note # 3334052 and appears the solution is not complete and we cannot test the same . It is missing additional changes from SAP such as the additional CPP Max earning for the second 4% deduction also we don't have the new CPP for 2024 - T5KTC. Any one tested this note?

When is SAP planning to deliver the full solution?

 

[jonasben]

The "Maximum annual employee and employer contribution" (CPP/QPP second contribution) is CAD 184.00 and it was delivered by Note as Tax Threshold  in T5KTC.

I checked with our developers and they mentioned that the Maximum annual pensionable earnings did not influence the new formulas and therefore was not necessary.

[xavier_joseph]

When we process nothing happens... no new technical wage types are generated !

[jonasben]

The new WTs appear only once the second CPP /QPP contribution takes place for a given employee - meaning the employee has being paid more pensionable earnings than the YMPE.

If you believe there is an issue, report a case so we can take a look in your system and scenario.

Regards,

Jonas

[FASEEH_UDDIN]

I've observed that WT /110 seems to be missing from the T511 table for ECP (Employee Central Payroll) customers. This gap appears to limit the ability to make year-end adjustments for deduction wage types in Infotype 0221.

Interestingly, I haven't encountered this issue with ECC customers.

Has anyone else who deals with EC payroll noticed this gap?

[dilippatchamatla]

Comparing SAP notes 3395958 & 3334052

Tax Threshold for second CPP is not same. I am referring T5KTC "CS" entries. Note 3334052 has 184 but Note 3395958 has 188. Can you please clarify ?

[jonasben]

Hello Venkata!

I believe CRA updated the amount. It was CAD 184.00 up to a few days ago, it now shows CAD 188.00.

See this link: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/calculating-deduction...

[dilippatchamatla]

Thank you, Can this be updated in respective SAP notes to avoid confusion.

[dilippatchamatla]

Factor I (Gross Remuneration for the pay period) is wrongly calculated after HR SP upgrade FAQ 4th Point: 

Currently both T511K constants KTHPE = 0 & KAVGF = 0 maintained as zeros for our client. Is this mean no impact due to notes 3396530 & 3244874 and we dont need to change the configuration in T51P1 as mentioned in above note. Is this understanding correct ?

[jonasben]

Hi Venkata,

Quick correction: 3396530 is a KBA, not a Note. It does not deliver any changes / corrections on standard software.

 

If you want you system to estimate factor I in a period for which regular income is smaller / inexistent and there is bonus payment (as per 1507957), you need to  maintain indicators in table T51P1.

Please let me know if it is not clear so I can adjust the KBA wording.

[jmentans]

Jonas - We have added WTs that are in our RT table to T51P1 with the correct R1 and R3 indicators and we are still encountering issues where the annualized income is missing high amounts of non-periodic income to tax when we compare the same employee to our production system that does not have the note that changed the code in KATAX.  Is it possible to put the original code back or  provide new code so that we do not need to  rely on what is in table T51P1 to annualize non-periodic income? This solution is not working for all non-periodic scenarios.  This is a big impact to deal with at year end.  We are seeing under taxation in our LTD employees and the differences are significant.

[jonasben]

Hi, Joan.

The non-periodic is not included in annualized value during estimation.
The estimation, when triggered, will calculate factor I, which is gross regular income for the period.

The non-periodic is added later on, when calculation factor A. You can verify it in KATAX log.
The changes on KATAX from Note 3244874 did not change the way bonus/non-periodic is added to calculate factor A.

If you will compare scenarios before and after Note 3244874 , you will be looking for a difference in factor I.
If you notice differences that are not factor I, you must check that both systems have all Notes related to YE22 - listed in Note 3247375.

 

I cannot advise you to rollback previous version of KATAX. SAP recommendation is to use up-to-date standard delivered version.

[troysachko]

We applied Support Pack C4, but we still see that the EI rate for 2024 is still showing 1.63 and the 2024 rate is supposed to be 1.66.  Which Support Pack will this 2024 value be delivered in?

Thanks.

Troy

[ChandraV]

I dont see this in ECC either, except for country group Denmark. Not there in client 0 as well (except Denmark).

[dilippatchamatla]

Thanks Jonas, We didn't maintain T51P1 so far. We could not see any difference before and after the note 3244874. Can we assume that there is no impact to us and tax calculation is still correct in this case ? Can you please elaborate more details in the note KBA based on T51P1 maintenance ? I mean if clients already not maintained anything in T51P1 - No impact due to note 3244874 etc

[jonasben]

Hi Venkata,

I will dedicate some thought to updating the KBA.

One scenario that might be affected is when an employee is not active during all pay period (e.g. terminated in mid of pay period).
This estimation of factor I is also triggered when payroll run is not regular e.g. off-cycle run.

On a 'normal' scenario the estimation does not take place, thus would not be impacted by missing the indicators.

 

If you want to check the program code and maybe debug a scenario, it is include RP_PAYCA_ADDTNL_BASIC_PAY_GRS and method EXECUTE.

[jonasben]

Hello Troy,

The EI rate for 2024 was not yet delivered.
Once the Note is released, the respective HRSP that will deliver it will be mentioned in Note.

When we release Note, it will be listed in SAP Note 3373115 – Main note for Canadian year-end 2023

You can also set up notifications for newly released Notes, see how: 2478289 – How to set up notifications for SAP Notes and/or KBAs with Expert Search filters

 

[dheebala]

Hi,

Is any one able to populate Box 50 in T4 from(RPP or DPSP registration number) can you please let me know how to accomplish this ?

jonasmben can you help on this as we don't see Box 50 in T4 form configuration delivered.

 

Thank you

Dheeraj

[etardiff]

Hi Dheeraj,

The Pension Registration number is populated in table V_T5KYR Pension plan wage types and registration numbers. From there, it will fill the registration number in Box 50 of the T4.

 

... Elizabeth

[dheebala]

Hi Elizabeth,

Thank for kind help, very much appreciated is there something else to be done like updating T4 box in table view  V_596G_A other wise i have maintained the values in table V_T5KYR but still Box 50 Registration number is not populated.

Note: I don't see box 50 (B50) in view of table V_596G_A

Regards,

Dheeraj

[jonasben]

Box 50 will populate only if box 52 is populated and in accordance with T5KYR.
If there are amounts populating box 52, system will look for the Wage Type (WT) that composes B52 in table T5KYR - and get the respective Registration Number from this table.

You will not find B50 in V_596G_A because it is not a WT.

If it still does not work, please submit a case so we can analyze your scenario in detail.

[dilippatchamatla]

hi Jonas, It looks there is an impact to some scenarios especially terminated employees who has bonus component (/103). Statement moved cv_gross_fup = 0 outside of IF condition which means it will always set to zero and will have an impact on I factor. This could have been called out in C0 note 3244874 on the exact change and its impact. Unfortunately, Our system tax calculation is incorrect from last few pay periods for some scenarios. What are the possibilities to restore this change as it was earlier as we would need some time to have the mappings in T51P1 ? How the tax can be corrected for the terminated employees ? What are the other scenarios we will need to check on its impact ?  If we have to map T51P1, what is your suggestion ? Do we need to map to R1 & R3 for all wage types which has been mapped to /102 & /103 ? If you can elaborate your inputs in KBA, it will be helpful.

[jmentans]

Venkata - We are also experiencing this issue in our system.  We had to input all of our Wagetypes that cumulate in /103 in T51P1.  However we are still experiencing this issue when we retro a regular payroll over a past adjustment payroll that had nonperiodic payment.  It is refunding the taxes taken in the original adjustment period which for our company are very large payments so refunding thousands of dollars.  I have several times posted incidents with this issue to SAP asking that the code return to original so we do not have to figure out all the issues associated with adding the configuration to T51P1 at year end.   For this issue with retro over adjustment payrolls we changed our value of KAVGF to 1.00 and it fixes this issue but again we do not want to make this change last minute.  For context, we have been running SAP payroll since 2011 for ~ 7000 union and nonunion employees with absolutely no issues with tax calculations. We have very large nonperiodic payouts in all scenarios and we parallel test a payroll every year end with a retro parallel back to the beginning of the year when we apply HRSPs.  This is our first year since 2011 encountering numerous tax issues.

[jonasben]

Venkata, I understand your concerns, but the guidance to keep the indicators is not new. Not having it was being masked by a small error which was corrected with note 3244874.

Regarding the statement moved 'cv_gross_fup = 0' , it was done intentionally.

I have no suggestion other than set up the indicators to all WTs that compose regular earnings of employee - that means WTs tha cumulate in /102.

 

[jmentans]

Jonas - It might be a small error in technical terms but it is having very large impacts on your long term customers tax calculations at year end.   What is being asked is to give us a time to analyze these changes.  We would prefer to make these changes next year which would give us 2024 to make the change in our payroll test system and monitor over the year.  We are regulated by our provincial government and therefore all changes and calculations need to be transparent to our auditing bodies.

[dilippatchamatla]

Can you please provide previous reference note on the statement "guidance to keep the indicators is not new" ?. To my understanding the tax calculation was correct since many years without these indicators and it means these indicators were not mandatory. If the change 3244874 is impacting existing tax calculation and it mandates these indicators in T51P1, it should have been called out in the note 3244874 clearly. so that we know the impact and plan for the change accordingly before implementation as it would require client specific change. Now we are close to year end and tax calculation has been incorrect from past few pay periods. We are unsure what other scenarios it would have been impacted. It has put us in difficult situation. I will raise an incident for further discussion.

[jonasben]

197118 - Q&A: Tax calculation without/less regular income

2741042 - FAQ: Tax calculation in Payroll Canada

[xavier_joseph]

We applied Sap notes and don't see Box 45 /16A/17A when we test the form.

 

PY-CA-YE	3410656	1	Prerequisite objects for SAP Note 3393981
PY-CA-YE	3393981	2	YE23: T4, T4A and T4A-NR forms and XML changes for tax year 2023
PY-CA-YE	3401099	2	YE23: Relevé forms and XML changes for Tax Year 2023
PY-CA-YE	3411619	2	YE: Short dump due to not implemented BAdI

 

T4 form shows the fields, but when we run T4 (RPCYERK0) the fields do not appear in the Forms

 

If we check  under SFP transaction and layout we can see the boxes. Did anyone faced the same issue?

 

 

all. Neither 45, nor 16A and 17A

 

[xavier_joseph]

Hello,

We applied the following notes and we cannot see the boxes while generating forms

PY-CA-YE 3410656 1 Prerequisite objects for SAP Note 3393981
PY-CA-YE 3393981 2 YE23: T4, T4A and T4A-NR forms and XML changes for tax year 2023
PY-CA-YE 3401099 2 YE23: Relevé forms and XML changes for Tax Year 2023
PY-CA-YE 3411619 2 YE: Short dump due to not implemented BAdI

T4 form shows the fields in SFP transaction , but when we run T4 (RPCYERK0) the fields do not appear in the Forms at all. Neither 45, nor 16A and 17A

 

Did anyone see the same issue?

[FASEEH_UDDIN]

Did you apply the manual instructions in note 3393981?

I am following manual steps and its asking for SAP package and not sure which one to choose. So I am stuck here.

[xavier_joseph]

Yes we applied  the manual instructions in note 3393981

[xavier_joseph]

We did apply manual correction for 3393981

[FASEEH_UDDIN]

Ok. B16A & B17A is showing under V_T596I sub application T424.

However B45 should display under T423 and it is not showing up. It seems all clients are impacted.

[ejaz1]

Hi ,

After applying Note - 3393981 - YE23: T4, T4A and T4A-NR forms and XML changes for tax year 2023,

I am noticing that after running the T4 forms , the box 16A is also getting populated for Year 2023 , the amount matches Box 16 ( Employees CPP) .  This box is only suppose to work  for  2024 correct ?

Is anyone else facing this issue .

Thanks

[FASEEH_UDDIN]

That's right, it is for year 2024. Do you see B45 for year 2023(T423)?

 

[former_member649267]

Hi,

 

Did you configure the FEATURE as mentioned by SAP, Run T4 and see if the box 45A automatically populates with value maintained in FEATURE? did you try this?

[former_member649267]

Hi EJ,

 

In table T596I under T423. Please check if B16A field default to wage type /320, as B16 defaults wage type /320. if yes then kindly remove it, run T4 and let me know if you are still facing this issue.

[ejaz1]

BOX 45 is working fine , I dont see in the T423 table , but if you update the BADI or the feature 07DEN , it will show up ...

My issue is why am I seeing amounts in 16A  ?? Should that not be blank .. do you have any insight on that

[FASEEH_UDDIN]

Let me create the feature and run the T4.

 

[FASEEH_UDDIN]

It shouldn't be there in T423 table, just delete the B16A entry in T596I and rerun the T4.

[ejaz1]

Hi Mohammed

 

It is not there in T596I for Year 2023 , it is there for T424 , where it should be  and it is blank , no WT has been assigned to it yet .

But when I run for this Year 2023 , the box is populating 16A

Thanks

 

 

[FASEEH_UDDIN]

Hi Ejaz,

Thanks for the clarification, I will check and get back to you.

Regards,
Faseeh

[Malou_Navera]

We also just applied these notes but I do not see the new boxes 16A, 17A and 45 in T596I for both T423 and TT424.  Any suggestions how to resolve?

PY-CA-YE 3410656 1 Prerequisite objects for SAP Note 3393981
PY-CA-YE 3393981 2 YE23: T4, T4A and T4A-NR forms and XML changes for tax year 2023
PY-CA-YE 3401099 2 YE23: Relevé forms and XML changes for Tax Year 2023
PY-CA-YE 3411619 2 YE: Short dump due to not implemented BAdI

Thanks.

Malou

[FASEEH_UDDIN]

Hi Ejaz,

CRA has added B16A & B17A for 2023 T4 and SAP has the same. I have tested and it looks fine to me.

 

https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t4/t4-23b.pdf

Regards

Faseeh