Pro-rated exemption for Tax and CPP

[Former Member]

This question is for Canadian SAP Payroll. Does anybody know if there is a way of applying a pro-rated exemption for Tax and CPP? Are there tax indicators in IT0464 that would allow us to indicate that only 80% of the employee’s income is to be exempt?

[former_member193210 · Accepted solution]

There is no standard parameter to meet your requirement.  I would suggest that you use Valuation Basis (V_512W_B) to valuate the employee's income and generate 2 WTs, one being taxable and CPP assessable (at 20%), and a second one being exempt from Income Tax and CPP (at 80%).

[former_member193210 · Accepted solution]

Here is an example of what we did for one of our employees groups.

Note that WT 1001 is the one the employees have on IT0008, that a Custom Processing Class 96 is used in a PCR for the valuation, and that the employee's Payroll Results Table will have WTs 1001 and 2001 with an amount appropriate to their % of the salary on IT0008.

[former_member235056]

Hi Tatiana,

There is no standard way of doing it even with using IT464.

I would recommend you create 2 separate wage types as mentioned by Remi and have them added to 3rd final wage type to be reported using a custom rule so it is easy for any reporting purpose.

Thanks,

Ameet

[Former Member]

Thank you guys!