Using the Payroll deductions online calculator - Segment 8
Host: Welcome to the segment called Using the Payroll deductions online calculator, part of the Payroll Information for a New Small Business video.
I'm your host Janice Novak.
With me is Frank Stewart who will share with us, in this segment, information that he has obtained from the CRA about using the Payroll Deductions Online Calculator.
Host: Welcome Frank.
We've been talking a lot about this Payroll Deductions Online Calculator. What does it do?
Subject matter expert: Thank you Janice.
The Payroll Deductions Online Calculator, or PDOC, is a tool on the CRA website that assists with making payroll calculations.
Using information you provide, the PDOC calculates Canada Pension Plan contributions, employment insurance premiums, and income tax deductions for most types of pay.
The PDOC calculates federal, provincial, and territorial payroll deductions for all provinces, and territories, except Quebec, based on the information you provide, each time you use it.
Host: Using the calculator sounds fairly straight-forward. Is there anything else we should know about it?
Subject matter expert: The payroll calculator performs a one-time calculation and you can track an employee's CPP and EI year-to-date information separately, either by printing or saving the amounts for reference, to ensure the CPP and EI deductions stop when the yearly maximum is reached.
Many companies use payroll software since these products have the ability to store employee records and produce T4s.
Host: Before even going to the PDOC, what should an employer have ready?
Subject matter expert: The information you need to have available or have decided, when getting ready to use the PDOC, include:
- the amounts reported on the employee's federal and provincial or territorial Form TD1, Personal Tax Credits Return;
- what, and how much, the employee is paid, that is, whether the payment is salary, bonus, taxable benefits, or vacation pay; and
- how often you pay the employee—in other words, your pay period.
It's also important to remember that the PDOC uses the information you provide, so it's important to make sure your information is accurate every time.
Host: Can you walk us through part of the calculator? For example, what type of information do you start with?
Subject matter expert: When you go to the Payroll Deductions Online Calculator webpage, you'll see a disclaimer.
Read the information, and if you agree click "I accept."
From this point, you will be asked to make a selection based on the type of calculation you would like the PDOC to perform—such as salary or commission.
You will be asked to enter some voluntary information such as your business name and the name of your employee.
Next, you have to enter some mandatory information, such as the province or territory of employment, how often you pay the employee, and when the employee is paid.
The on-line tool will continue to lead you step-by-step through the various fields and screens that follow.
Host: You mentioned that a user is led step-by-step through the screens. When I use the calculator for the next pay period, is there anything else I need to do or remember?
Subject matter expert: One thing to remember when you reach the section relating to CPP and EI is that you must include the year-to-date or cumulative amounts that have been deducted for the year, so that the PDOC will be able to calculate the maximum for the year.
The calculate button will give you a summary of what to deduct from the employee. If you've made an error entering the information, you can modify it or start over.
Host: When someone is certain that everything has been entered correctly up to this point, what comes next?
Subject matter expert: From this point, you can save and print the employee record.
You can also print the Employer Summary, which gives you the employer portions of CPP and EI.
As already mentioned, it is important to keep track of an employee's deductions from every calculation, for your records and for future PDOC calculations. The calculator does not keep or store any of the data that you enter.
As an alternative, many employers use commercial, or in-house developed payroll software to manage their business, including the calculation of their payroll deductions.
Host: Wow, that's a lot of great information. What if, while during a calculation, someone needs help?
Subject matter expert: There is also a help function built right in to the PDOC.
Select the relevant question under "How to use PDOC" on any page.
If you are experiencing a technical difficulty or had problems accessing the PDOC, call the e-Services Helpdesk at 1-877-322-7849.
Host: Thank you Frank.
This concludes the segment on using the Payroll Deductions Online Calculator, part of the CRA's Payroll Information for a New Small Business video.
Thank you for watching.
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