Method step changes required for Federal and Provincial tax calculations (2023)

Modified on Sat, 20 Jul at 10:31 AM

Information

Products: Sparkrock 2016
Summary: Method step changes required for Federal and Provincial tax calculations (2023)

Details

As per the new changes announced by CRA explained in KBA here Sparkrock 2016 customers should make changes in the Federal Tax and Provincial tax payroll controls under calculation method steps. Adding new calculation method steps has been explained below in the video.

Update November, 2023

When we first released this document, we noticed that Federal and Provincial taxes were not being calculated accurately. At that point we suggested customers to allow for a higher deduction, which would be returned for employees in next year's tax return. Since then, we have determined the steps needed to have the system match what CRA's PDOC tool calculates. Please follow the steps in the Resolution section, right under Update November 8 2023.

Resolution

Please find the excel sheet with the new method steps SR2016_Method_Step_Changes_2023.XLS

For instructions on how to apply these changes, please watch the video below.

Update November 8, 2023

Federal Tax Calculation 2023

New rate for 2023
Need to create a new Bracket Code CPP LOW RATE
The new CPP LOW RATE is a bracket code type TAX CREDIT effective 1/1/2023 (first screenshot).
The rate for 1/1/2023 is 12.47899. (second screenshot).

Provincial Tax Calculation 2023

New rate for 2023
Need to create a new Bracket Code CPP XX LOW RATE
The new CPP XX LOW RATE is a bracket code type TAX CREDIT effective 1/1/2023 (first screenshot).
Note: Replace the XX with the two-letter provincial abbreviation. (Ontario shown below)
The rate for 1/1/2023 is 4.20126. (second screenshot).

CPP Low Rate table - Federal and Provinces

Federal Tax Calculation Method Steps

The following change is needed for the Federal Tax Calculation method steps table.

Find the last effective date for the calculation steps
Copy to a new effective date (01/01/2023 à 01/02/2023)

Make the following change. This is based on the setup shown above.

Provincial Tax Calculation Method Steps

The following change is needed for the Provincial Tax Calculation method steps table.
Note: Replace the XX representing the province code with your applicable province two letter code

Find the last effective date for the calculation steps.
Copy to a new effective date (01/01/2023 à 01/02/2023)

Make the following change. This is based on the setup shown above.

Note: If you have any questions regaring these steps, please create a Support ticket and reference KBA-03507.

Impact / Risks

Not Applicable

Workaround

Not Applicable

Related Information

Ensure you have added the new tax brackets documented under KA-03588 2024 Payroll Tax Update Canada

Update History

The following are the dates and actions pertinent to the history of this issue.

Date	Details	Link
Dec 13, 2022	The first version of this Knowledge Base article was created.
Dec 23, 2022	Updated document with excel file and video explaining the changes required
Nov 08, 2023	Updated the KBA with steps to calculate both Provincial and Federal taxes more accurately
Dec 07, 2023	Changed reference to point to new Tax 2024 document	KA-03588 2024 Payroll Tax Update Canada