Sparkrock 2016 - Canadian Federal Income tax for 2024 including CPP2

Information

• Products: Sparkrock 2016
• Summary: Changes to CPP pensionable earnings and contributions in 2024

Update History

Details

As anticipated in KBA 03506 - Changes to CPP pensionable earnings and contributions, the Canada Revenue Agency has announced changes to CPP contributions starting Jan. 1, 2024. Phase two of the CPP enhancements introduces a second CPP contribution rate and earnings ceiling called the "year's additional maximum pensionable earnings" (YAMPE).

This KBA includes these changes in a configuration package and instructions on how to import it and adjust the new pay control to match your Sparkrock 2016 configuration.

12/21/2023 - IMPORTANT NOTE: If the Calculation Order changes described in steps 7,8 and 9 are performed BEFORE running the last payroll for 2023, you may encounter issues while performing the calculations for the 2023 PP. If when you use the Calculate Single Employee button you encounter an error message saying "No payroll Calc Method steps effective for the dates specified for the journal", please remove the CPP2 record from the Calculation Order Controls list (Mentioned in step 8) and try to calculate everything again. Please contact Support if further help is needed.

Resolution

• Ensure you have the latest Sparkrock 2016 version installed.
• Download the CPP2 configuration package provided by Sparkrock Support. Click here to download the file.
• Follow the instructions in the package to import and apply the CPP2 changes.

Import process

1- Under Configuration Packages, click on Import Package, select the file you downloaded from here.  Do not apply it yet.
For more information about config packages, please review the last two steps in KA-03501.

2- After the package was imported you will notice a new package called CPP, description "CPP Payroll Controls and tables", open it.

3- Highlight the following lines, and go to Functions/Apply data


4- If the package applies successfully, move to the next section Setup. If you receive any errors, contact support using the case created to deliver these instructions.



Setup

1) After having applied the config package with the changes, go to Payroll Controls, click on Fed Tax, and under Navigate tab, hit Calc Method. 


2) Notice that in addition to the 2023 line (for this year), a 2024 line has been added. Next steps will require you to compare the 2023 configuration and make changes to the 2024 line to match your 2023 configuration.


3) Select the line with the latest effective day prior to the new 01/01/2024 (e.g. 01/01/2023), then click on Navigate / Steps
4) Notice the lines that say: Add Base Amount. A good idea would be to take a screenshot of this area and highlight the Add Base Amount lines
 
5) Now open the 1/1/2024 and compare it to your screenshot, make changes to Add Base Amount lines to match your 1/1/2023


5.1 [NEW] - Follow steps 1-5 now for Provincial taxes.

• If in Ontario (Payroll control ON TAX), you will need minor changes. Please follow steps 1-5, comparing your 2023 pay control and adjust the 2024 to utilize the same Base Amount Codes.
• If you are in other provinces, contact Sparkrock Support to assist merging your configuration from 2023 with 2024. Some additional steps might be needed when importing the config package.

 
6) Then navigate to Payroll Journal and open your Payroll Journal Templates


7)  Continue with these steps only if you have processed the last payroll for 2023 already. From the Payroll Journal, go to the Override Calculation Order drop down and select Advanced

8) Then select the Navigate tab and then the Calculation Order Controls button.


9) Once the list is open add a new line and add CCP2 EE and hit Okay once added


10) Now CPP2 EE has to be added to every employee's Payroll Controls. Go to HR Employees, select an employee and open the Pay Controls under the Payroll Details.


11) Once open find the CPP EE line and add a new line below it with code CPP2 EE and select the same Payroll Posting Group as the CPP EE. Please repeat this for every Employee.


12) After completing changes in step 11 you will have completed the process of adding the CPP2 calculation logic to your Sparkrock 2016 environment. Feel free to test it now.

 

13) [NEW] BASE AMOUNTS

Base Amounts needs to be adjusted. Please search for Base Amounts, find the CPP/QPP EE line, click on Navigate and then Details. Add a new line with just CPP2 EE as the Control Code Filter, don't populate any other fields other than that and click OK.

 

14) [NEW] Create a new base amount called CPP EE or something that has not been used in your system. Then click on Navigate > Details and add a new line with just CPP EE as the Control Code Filter, don't populate any other fields other than that and click OK.

 

15) [NEW]Navigate to Payroll Controls, search for FED TAX and click on Navigate > Calculation Methods. Select the latest one and click "Steps" at the top. Find the line that uses the Base Amount CPP/QPP EE and change the base amount to the one we created on step 14. Repeat this process for the provincial tax pay control. This ensures a correct calculation of the Federal and Ontario taxes when CPP2 is deducted.

 

Impact / Risks

It is recommended to test changes in the QA environment first before applying them to Production.

Workaround

Not Applicable

Related Information

KBA 03506 - Changes to CPP pensionable earnings and contributions

 

Attachment

Configuration package with CPP2 changes.