In my previous two posts I discussed EI and CPP calculations, but something I haven't yet touched on is what happens to EI and CPP when a cheque is adjusted.  When you adjust or reverse a paycheque, you'll notice a warning message informing you that the insurable and pensionable earnings require manual adjustment.  This message is referring to the T4 and RL-1 Reporting tab of your employee records.  If you have a look there, you'll see EI Ins. Earnings and Pensionable Earnings amounts, which are updated with each cheque you post.  However, as per the warning, the software is unable correclty reduce these amounts to reflect an adjustment or reversal.  So after you adjust or reverse any payroll cheques, it is important to manually update them accordingly so that your T4 slips will be accurate.