CPP Overpayment

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! 

  •  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!

  • FormerMember
    FormerMember

     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

     

  •  I was helping out a client and was working from her backup.  Because I don't have the SimplyCare, it would not let me see the PIER report.  I asked the client for their payroll ID and she did not know it.  So what would you do?  Take that the info in Simply is correct?

  • FormerMember
    FormerMember

     Hi again:  You did not say how you checked the CPP deductions in Excel.  If you did just deduct $3,500.00 off the gross for each employee and then multiply to get the CPP amount, then your calculations would definitely not be correct, particularly if there were employees not employed for the full year.

    You say you were working from the client's backup.  If you open Simply, go up to Reports, Payroll, Employee, Detail, choose Jan. 1, 2009 to Dec. 31, 2009 for your date range and bring up that report and print it, you will be able to see from that report if each pay period was correctly deducted based on the number of pay periods selected, etc.  If you do not want to spend the time for this, you can pretty safely assume that the Simply deductions are correct as long as the client was using the current deduction tables throughout the year as Dave mentioned previously. 

    The circumstances where the program may actually underdeduct are few, so unless you know the circumstances of every paycheque issued you would not be able to determine that.   I would trust Simply and if there turns out to be any under deducted employees, that will have to be dealt with later.   Rita Deering

     

  •  Hi Rita - this is an old post but I know I am missing something hoping you can help to confirm.  So for employees working less than a year (starting in the middle or quit in the middle of the year), why can't we take their gross income minus $3500 x 0.0495?  Do you mean that if she starts on July 1st of the year, she is only allowed to exempt 1/2 of $3500?

  • She actually didnt' work for the whole year until I hired her in August 2011.  And I don't use the PIER report.  Simply auto deduct and I remit using the Remittance Summary.  Maybe her exemption is only for August-December which is only 5/12 months which is 5/12x$3500? I always thought she would be exempted the whole $3500 from her gross income, maybe I am wrong...