I'm new to simply and bookkeeping and would like to know what I need to do to have the tax table information updated for each employee. I download payroll release "D" for 2010 in late December. I assumed that the tax table numbers would automatically update when I went in yesterday but it still seems to have 2010 federal/province tax numbers, CPP and EI also not updated etc. Do I have to manually get the numbers from the CRA website and type them in? Also, what else would I have to update.
You need to have the employees fill out a new TD1 form, or
If nothing has changed, and everything is set up properly, you can update the amounts automatically from Maintenance | Update Employee Claims.
Unless you have more than 25 or so employees, it's not much trouble to do this manually instead.
I usually found that there were enough changes in the TD1s that it was best to ask for a new one every year.
Are you from Ontario? Last year Federal Claim amount was 10,382.00 which the previous person entered. On the CRA site for Ont I found $10,527 so did I just enter the difference in the amount column?
Hi there: If you are using the Maintenance, Update Employee, then you just put in the difference. If you are doing each employee individually then you have to type in the new amount in each employee's window. Rita Deering
Hi there. I just used the Update Employee Claims to increase the amounts for both federal and provincial taxes. Once I hit the OK button, the increases were then applied to the claim amounts and at the same time the increased amount was put into the "subject to indexing box" below the federal and provincial claim boxes for this year of 2011. i've never updated the tax table using this shortcut but thought I would give it a try as we are over 50 employees. Can someone please let me know if I should be concerned that there are now figures in the "subject to indexing boxes"?
Thank you. Leanne
"Subject to Indexing" means the portion of the employee's Personal Exemption that is 'indexed' by the government every year. So that is usually the amount on the top of the TD1. "Indexing" is the process by which the Government changes personal exemptions annually. i.e. if the consumer price index exceeds 3% they 'index' the personal exemption by a percentage.
If the employee has, for example, a specific amount for tuition, it wouldn't change when the personal exemption amount changes, so it is NOT subject to indexing.
If the percentage is lower than a certain amount, they do not index. This is the process whereby we all pay slightly more in tax every year, until an election year.
Hope that helps!
That does help me.
So I manually have to change the Federal Claim Amount and Provincial Claim Amounts for each employee, do I also change the Federal/Provincial Claim Subject to indexing?
Yes, if you manually change it, you'll want to change the indexed amount.
If you use the program to change everyone, i.e. by 3%, the indexed amount will be changed for you.
Make a backup!
Thanks, I just manually changed my federal and provincial plus the indexed portions.
What do you put for the indexing amounts. I was told to just remove what I have a leave both the federal and provincial blank as it is not required. I called CRA and they have no idea they told me as to what I would put in these fields.
I'm really confused as it what I should be doing in these 2 index fields.
Hi there: The two index fields can be left blank. They don't mean anything in particular as far as how the system operates. Rita Deering
There's an explanation on about page 8.
As Rita says, it doesn't do anything until next year. In my personal experience, between employee turnover and the changes in people's situations, I just ask them for a new TD1 every year.
The indexing works well, but it's not practical for small payrolls.
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