How to use PDOC to – Calculate salaries

Information

Throughout the Payroll Deductions Online Calculator (PDOC), additional information about terms is available through the help buttons. If you select a link in the help text, a new browser window will open.

The information on the screens are customized for each province and/or territory.

Step-by-Step Salary Calculation

Welcome Page

The following options are available on the Payroll Deductions Online Calculator landing page:

• Salary
• Commission
• Pension
• Verify CPP contributions and EI premiums

Note: You can only do one type of calculation at a time.

1. The "Salary" icon is selected by default.
2. Select the "Next" button to start a new payroll deductions calculation.

Step 1: Employee Information

When you select the "Salary" icon and "Next" button, you will be directed to Step 1 of the salary calculation.

1. The employee's name and/or the employer's name. These are optional fields.

   Note: If you enter the employee's name, it will be automatically included in the file name when you save the result at the end of the calculation. The application will accept a blank field.

2. Select the province or territory of employment (normally where your business is located or where the employee reports for work). This is a required field. For more information, consult Determine the province of employment (POE) - Canada.ca.
3. Select the pay period frequency. This will help estimate the annual income of the employee for calculation purposes. This is a required field.
4. Select the date the employee is paid. This is a required field.

   Note: The employment payment date will determine the employee's income tax rate, as well as CPP/QPP and EI related figures, in order to generate the payroll deduction result. This date will also be included in the file name when you save the result at the end of the calculation.

5. Select the "Next" button to continue or the "Previous" button to change the type of calculation. All of the information will be carried forward to the applicable screens as necessary.

Note: If the "Province or territory of employment", the "Pay period frequency", and/or the "Date the employee is paid" fields are not selected, an error message will display after the "Next" button is selected.

Step 2: Gross Income and Additional Options

1. Enter the "Salary or wages income" (without deductions) for the pay period. This is a required field. If you do not enter an amount, an error message will display after the "Next" button is selected.
2. Enter the vacation pay amount for the pay period, if applicable.
3. Additional Options - of the following options, select the one that applies: 

• A bonus payment
• A retroactive payment
• No bonus or retroactive payment

Note: Only one option can be selected at a time. The "No bonus or retroactive payment" option is selected by default.

• If you selected "A bonus payment":
  1. Enter the current bonus payment amount.
  2. Enter RRSP, RPP, PRPP, union dues, and other deduction amounts withheld from the current bonus if applicable.

  3. The RRSP, RPP, PRPP, union dues, and other deduction amounts from current bonus should not be more than the current bonus payable less the total amount of CPP/QPP, EI, and income tax deducted from the current bonus payable.

     Note: If the employee wants to make a large RRSP contribution which cannot be covered by the current bonus payable less the total amount of CPP/QPP, EI, and income tax deducted from the current bonus payable, the following adjustment can be made: Reduce slightly the RRSP, RPP, PRPP, union dues, and other deduction amounts from current bonus, and enter this reduced amount in the employee's contributions to a registered retirement savings plan (RRSP) under the regular salary calculation. The total tax deductions may be slightly different after this adjustment.

  4. Enter previous bonuses paid in the calendar year if applicable.
  5. Enter RRSP, RPP, PRPP, union dues, and other deduction amounts withheld from the previous bonus if applicable.
  6. Enter deductions for CPP/QPP additional contributions deducted from previous bonus(es) if applicable.

• If you selected "A retroactive payment":
  1. Enter the amount of the total retroactive pay increase in this pay period.
  2. Enter the number of pay periods that applies to the retroactive pay increase in the current year. The number of pay periods cannot exceed the total number of pay periods in the year.
  3. Enter deductions for CPP/QPP additional contributions deducted from retroactive pay
  4. Enter RRSP, RPP, PRPP, union dues, and other deduction amounts withheld from the retroactive pay if applicable.

     The RRSP, RPP, PRPP, union dues, and other deduction amounts from retroactive pay should not be more than the retroactive pay increase less the total amount of CPP/QPP, EI, and income tax deducted from retroactive pay.

     Note: If the employee wants to make a large RRSP contribution which cannot be covered by the retroactive pay increase less the total amount of CPP/QPP, EI, and income tax deducted from the retroactive pay increase, the following adjustment can be made: Reduce slightly the RRSP, RPP, PRPP, union dues, and other deduction amounts from retroactive pay, and enter this reduced amount in the employee's contributions to a registered retirement savings plan (RRSP) under the regular salary calculation. The total tax deductions may be slightly different after this adjustment.

Select all other taxable income and benefits and/or other deductions that apply to this pay period. The options available are:

Taxable benefits and allowances

• If you selected "Taxable benefits and allowances provided to your employee"
  1. Enter "Cash, insurable for EI", "Non-Cash, insurable for EI", and/or "Non-Cash, non-insurable for EI" if applicable.
• A benefit you pay or provide to your employee is considered taxable if it is either unreasonable or personal in nature. To determine if the benefit is taxable, see Chapters 2 to 4 of Employer's Guide – T4001 Payroll Deductions and Remittances
• If Quebec was selected in step 1, an additional option is provided. "Quebec taxable benefits and allowances provided to your employee" such as life or health insurance contributions. For more information refer to Revenu Québec.

Tax deductions, tax reductions and non-refundable tax credit amounts

• If you selected "Employer's contributions to the employee's RRSP ":
  1. Enter the contributions the employer made to the employee's RRSP if applicable.
  2. The option stating that the employee cannot withdraw amounts from a group RRSP is selected by default.
• If you selected "Employee's contributions to RRSPs and/or RPPs and/or PRPP":
  1. Enter the contributions the employee made to an RRSP if applicable. This amount must be deducted at source and the amount entered will be displayed under salary or wages income on the result screen.
  2. Enter the contributions the employee made to an RPP if applicable. This amount must be deducted at source and the amount entered will be displayed under salary or wages income on the result screen.
  3. Enter the contributions the employee made to a PRPP if applicable. This amount must be deducted at source and the amount entered will be displayed under salary or wages income on the result screen.
• If you selected "Union dues":
  1. Enter the "union dues" per pay period.
• If you selected "Annual deduction for living in a prescribed zone":
  1. Enter the annual deduction amount for living in a prescribed zone from the employee's federal Form TD1.
• If you selected "Tips and gratuities declared by the employee under provincial legislation"(Quebec only)
  1. Enter the tips and gratuities for the pay period
• If you selected "Number of dependent children age 18 years or under and/or number of dependents of any age with mental or physical impairment" (Ontario only)
  1. Enter the number of dependent children age 18 year or under and/or the number of dependents of any age with mental or physical impairment
• If you selected "Alimony or maintenance payments":
  1. Enter the "alimony or maintenance payments" per pay period amount.
• If you selected "Tax exempt employment income situated on a reserve":
  1. Enter the tax exempt amount from the income entered in “Salary or Wages Income per pay period”.
  2. Select the check box if you elect to have this tax exempt amount pensionable.
  3. Enter the tax exempt amount from the bonus/retroactive payment entered in “Total current bonus/retroactive payable”.
  4. Select the check box if you elect to have this tax exempt amount pensionable
• If you selected "Other deductions and Non-Refundable Tax Credit amounts approved by a tax service office or tax centre":
  1. Enter the other deduction amounts, such as child care expenses and support payments, approved by a tax services office or tax centre.
• For "In (year selected), the employer deducted QPP contributions (including the second additional contribution (QPP2), if applicable) before transferring employee to another province or territory" select "Yes" or "No" based on the employee's situation.

  Note: If Quebec was selected in Step 1, this would indicate CPP and CPP2 contributions.

• For “Member of Clergy”, select “Yes” or “No” based on the employee’s situation. If you selected “Yes” then select one of the following options that applies for a member of the clergy.
  • If you selected "Housing Benefit":
    1. Enter the "Clergy housing benefit amount", utilities paid by the employer, and "Clergy residence deduction" per pay period amount if applicable;
  • If you selected "Housing allowance":
    1. Enter the "Clergy housing allowance amount", utilities paid by the employer, and "Clergy residence deduction" per pay period amount if applicable;
  • If you selected "No housing benefit or allowance":
    1. Enter the Clergy residence deduction per pay period amount if applicable.
• Select the "Next" button to continue or the "Previous" button to change the information entered in the previous step. All of the information will be carried forward to the applicable screens as necessary.

Step 3: Additional Information

TD1 Federal and TD1 Provincial Tax Credit Return:

Apply personal credits by using the total claim amount from the TD1 forms or the claim codes option. If you are using the claim codes option then see the following steps.

1. Select the range of the total amount claimed from line 13 of federal Form TD1. If you do not select a range, the default will be the range that includes the federal basic personal amount allowed for that year.
2. Enter in the applicable field any additional tax deductions requested by the employee from the back of Form TD1.
3. Select the range of the total amount claimed from the provincial or territorial Form TD1. If you do not select a range, the default will be the range that includes the provincial or territorial basic personal amount allowed for that year.

Canada Pension Plan (CPP) or Quebec Pension Plan (QPP):

Select one of the following options:

• CPP/QPP and second additional CPP/QPP maximum annual contributions have been reached: Select this option if the employee has reached the maximum employee contribution amount for the year. This will ensure the employee and employer do not contribute more than the maximum annual contributions for the year.
  • Enter the number of months during which CPP/QPP and CPP2/QPP2 contributions are required to be deducted in the year. This value should be the same throughout the year, unless a Form CPT30 is provided. For more information, please consult the T4001 Employers Guide.

  Note: Do not include any CPP/QPP and CPP2/QPP2 contributions that a previous employer may have deducted.

• CPP/QPP exempt: Choose this option for types of income not subject to CPP/QPP contributions. When you select the CPP/QPP exempt option, the tax amount will rise accordingly since the corresponding CPP/QPP credit is not applied to this type of income.
  • Number of pensionable months: Enter the number of months during which CPP/QPP and CPP2/QPP2 contributions are required to be deducted in the year. This value should be the same throughout the year, unless a Form CPT30 is provided. For more information, please consult the T4001 Employers Guide.
• Year-to-date amount (from your records): Select this option if the employee's maximum CPP/QPP and second additional CPP/QPP contributions or maximum pensionable earnings have not yet been reached. Enter the year-to-date pensionable earnings amount (up to YAMPE) and/or CPP/QPP contributions and/or second additional CPP/QPP contributions deducted from your records. This will ensure the employee and employer do not contribute more than the maximum annual contributions for the year. Based on the data you enter, the system will generate the total amount on the Result page to be used next time.

  Note: This option is selected by default.

If you selected "In (year selected), the employer deducted QPP contributions (or CPP contributions if Quebec is the province of employment) before transferring employee to another province or territory" on the previous screen:

• Enter the "QPP/CPP and/or QPP2/CPP2 contributions deducted year-to-date" amount.

Employment Insurance (EI):

1. Select only one of the following options:
   • EI maximum annual premium has been reached: Select this option if the employee has reached the maximum employee premium amount for the year. This will ensure the employee and employer do not contribute more than the maximum annual premiums for the year.

     Note: Do not include any EI premium that a previous employer may have deducted.

   • EI exempt: Choose this option when processing a calculation for types of income not subject to EI premiums. When you select the EI exempt option, the tax amount will rise accordingly because the EI credit is not applied to this type of income.
   • QPIP exempt (Quebec only): Select this option if the type of income is not subject to QPIP premiums. The tax amount will rise accordingly because the corresponding QPIP credit is not applied to the tax calculation.
   • EI and QPIP exempt (Quebec only): Select this option if the type of income is not subject to EI and QPIP premiums. The tax amount will rise accordingly because EI and QPIP credits are not applied to the tax calculation.
   • Year-to-date amount (from your records): Select this option if the employee's maximum EI premiums or maximum insurable earnings have not yet been reached. Enter the year-to-date insurable earnings amount and/or EI premiums deducted from your records. This will ensure the employee and employer do not contribute more than the maximum annual premiums for the year. Based on the data you enter, the system will generate the total amount on the Result page to be used next time.
   • Employer's Employment Insurance (EI) Premium Rate: The employer's contribution of employment insurance premiums is an amount equal to 1.4 times the total of the employee's premiums, unless a reduced rate applies.
   • Select "Calculate" to proceed to the Employer and Employee Result pages, or select "Previous" to change the information entered in the previous steps.

Payroll Deductions Result – Salary

The results for "Employee Deductions" and "Employer Remittances Summary" are displayed on two separate screens based on the information that you entered.

Employee Payroll Deductions Result:

• Employee payroll deductions result is calculated based on the data you entered. Some items, such as vacation pay, will be displayed only if an entry was made.
• You can use the "View results in PDF" button to save and/or print the result.

Employer Remittance Summary:

• This summary provides the combined CPP/QPP contributions, CPP2/QPP2, EI premiums, and federal and provincial/territorial tax deductions for remittance.
• For employees in Quebec, the employer should remit QPP/QPP2 to Revenu Québec.
• The year to date amount for Deductions for CPP additional contributions from Bonus/retroactive pay should be retained for future bonus or retroactive payments.

To print and/or save the employee (EE) and employer (ER) results in PDF format:

• Select "View results in PDF" on each of the respective result screens.
• The default name of the file will be: Employee name-(EE or ER)-PDOC-Date paid-YYYY-MM-DD.pdf

To print and/or save the combined employee deduction result and employer remittance summary in PDF format:

• Select "View combined results in PDF" on each of the respective result screens.
• The default name of the file will be: Employee name-(EE & ER)-PDOC-Date paid-YYYY-MM-DD.pdf. 

To make changes to the current calculation:

• Select "Modify the Current Calculation" to go back to Step 1, "Employee Information". Use this button if you want to modify the current calculation. The input fields will retain data.

To do another calculation:

• Select "Next Calculation" to go back to Step 1, "Employee Information". Use this button if you want to do a calculation for another employee

To select a different calculation type:

• Select "Start Over" to go back to the Welcome page. This will clear all the information entered in the previous steps.