Hello and Welcome,
Merry Christmas and Happy New Year. It's that time of year again. It's nearing the end of this calendar year. As 2013 is coming to an end, CRA has already updated most (if not all) of the exemption amounts and 2014 maximums. My purpose here is to create a one-stop place to find all information that is related to the end-of-year procedures (as much as I can being that I am not an accountant). My next blog will cover the T4s and PIER report.
Federal tax exemption amount
For 2014 in Canada, the basic exemption amount has increased $100 from $11,038 to $11,138
Provincial tax exemption amount
To find your updated provincial exemption amounts, go here (11214)
Canada Pension Plan (CPP)
For 2014 in Canada (except Quebec), the maximum CPP pensionable earnings are $52,500, and the basic exemption for the year is $3,500. The contribution rate for employees is 4.95%. The maximum an employee can contribute for the year is $2,425.50. The employer's contribution is an amount equal to the total of the employee's contributions.
Employment insurance (EI)
For 2014 in Canada (except Quebec), the maximum annual insurable earnings are $48,600 and the EI premium rate is 1.88%, for a maximum annual premium of $913.68. The employer's contribution is normally 1.4 times the total of the employee's contributions.
It’s possible to update all employee exemption amounts in “10 simple clicks”:
To do this process, you don't need to know the 2014 exemption amounts. The latest payroll update needs to be installed and Sage 50 will know the amounts that need to be used throughout this process.
- In the Home window, click on the Maintenance menu
- Click Update Employee Claims.
- Click select all employees
- Click the Update Personal Amount button
- Click OK
- In the Type of Personal Tax Credits section, click Provincial
- Click select all employees
- Click the Update Personal Amount button
- Click OK
- Click Close
This process (of updating the employee exemption amounts) will need to be done manually at some point after the last December 2013 paycheque has been posted and prior to calculating/posting the first January 2014 paycheque.
Non-Indexed Amounts versus Other Indexed Amounts
Many people have questions regarding the difference between the Other Indexed Amounts and Non-Indexed Amounts. The Non-Indexed Amounts are the amounts (if any) on lines 4, 5, 11, and 12 from the federal TD-1 form. These 4 amounts are not subjected to indexing. Indexing means that certain personal tax credit amounts go up based on changes to the Consumer Price Index. A quick detail of these 4 lines are as follows: 4. Pension income amount 5. Tuition, education, and textbook amounts (full time and part time) 11. Amounts transferred from your spouse or common-law partner 12. Amounts transferred from a dependent
Sources and resources:
What are the basic personal tax claim amounts for January 2014? https://support.na.sage.com/selfservice/viewContent.do?externalId=11214
How to globally update the exemption amounts https://support.na.sage.com/selfservice/viewContent.do?externalId=15678
How to advance the fiscal or calendar year? https://support.na.sage.com/selfservice/viewContent.do?externalId=10323
What are Other Indexed Amounts and Non-indexed Amounts (What is indexing)? https://support.na.sage.com/selfservice/viewContent.do?externalId=10538
Add or Modify an Employee's Tax Information http://help.simplyaccounting.com/cdn-eng/SA2014/AcctEd/Canadian_English/Content/Employees_Payroll-ep/ep-pr-ep-AddModEmployeeTaxInfo.htm
Year-End Centre http://na.sage.com/sage-50-accounting-ca/support/year-end/
TD1 forms for 2014 http://www.cra-arc.gc.ca/formspubs/frms/td1-eng.html
CPP contribution rates, maximums and exemptions http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/cnt-chrt-pf-eng.html
EI premium rates and maximums http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/ei/cnt-chrt-pf-eng.html
Workers’ Compensation (AWCBC) http://www.awcbc.org/en/maximumassessableinsurableearnings.asp