What happens when there is a CPP overpayment? I know if not adjusted the employees will get their overpayment back on their tax return, but what about the employer's overpayment? Does CRA credit the payroll account for this?
This feels like a stupid question!
If you're basing said overpayment(s) on S/Accounting's PIER review report, don't. The report is inaccurate and unreliable.
The CRA doesn't return or credit back the employer portion of a CPP overpayment automatically, that's for sure. As for a pleading phonecall to them, I don't know ....
I actually opened the payroll detail in Excel and did the calculation myself. There were overpayments by the employees. I then contacted CRA to find out how the employer goes about getting their overpayment back. I was told to report the CPP deductions on the T4s for the employees that were actually deducted and then on the T4 Summary to report what should have been deducted. He said the difference for the overpayment will be credited to the payroll account and to deduct this amount of the next remittance. He also told me to include a note explaining why there were overpayments. It will be interesting to see how this works out in the end. Seems to easy to actually get a refund from CRA!
Wow! Definitely too easy! We had a similiar situation several years ago when we discovered an over-remittence error after generating our T4's. It was an obvious, black-and-white mistake. Even CRA agreed at the outset we were due a refund. Yet it took months and months and a number of follow-up phone calls before it was finally credited back to our account. (It was during this process that I learned that the guy behind one desk might not necessarily provide the same answers and information as the guy behind the desk next to him. I'll leave it at that.) As for reducing our remittance, we weren't allowed to apply the credit until after we received written notice from CRA.
One question: How are you supposed to attach a note re overpayments to your electronically-filed report?
Hi there: The Simply payroll program WILL NOT overdeduct CPP from employees. The probability would be that there are some circumstances where the system underdeducts but NEVER overdeducts. How did you do the calculations in Excel to figure out that there were overdeductions? You cannot just take the gross earnings for every employee and subtract the $3,500.00 base amount and multiply by .0495. If any employees did not work the full twelve months of the year, then you don't just deduct $3,500.00 from their gross. You need to figure out each payday what the proportionate amount of the $3,500.00 applied to that pay period. If you run the PIER report in Simply do you get the same overdeductions as you figured out in Excel? The PIER report is incorrect if there are any employees who did not work the full year. Rita Deering
Adding to Rita's comment, you also have to factor employee age in your Excel-based calculation. CPP deductions don't start until the month following an employee's 18th birthday.
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