(CA) Run a bonus off-cycle payroll

Wagepoint uses the periodic method for calculating taxes on bonuses.

You can pay bonuses during a regular pay period by entering the bonus amounts directly into the hourly or salaried employee's payroll. However, if you need to adjust the amount of tax collected or want to process it as a standalone payment, you should run the bonus as an off-cycle payroll. 

• The CRA’s Payroll Deductions Online Calculator (PDOC) provides an easy workaround to calculate taxes on the bonus using the bonus method in order to reduce the tax contributions for you and your employees. 
• Contact our support team at [e-mail] if you need assistance adjusting taxes on the bonus for your payroll. We understand that timing is critical, so please notify us immediately if you require help. 

Select payroll dates

1. Paygroup — Select the paygroup for whom the bonuses are being paid and click “Next.” If you have just one paygroup, it is automatically selected.

2. The payroll dates will automatically be populated based on your payroll frequency and your prior regular payroll. 

3. Off-cycle (default: No) — Set the toggle to "Yes" and the last day of the pay cycle will automatically roll back by a day. Note: No two payrolls can have the same cycle end date.

4. Pay date — Use the date picker to adjust the suggested pay date, if needed.

   Notes:
   • You need to approve payroll three (3) business days prior to the desired pay date by 12pm ET if employees are paid using direct deposit. 
   • If you are paying or have already paid your employees by cheque, you'll want to ensure direct deposit has been turned off. Go to SETTINGS > ACCOUNT SETTINGS and change the EMPLOYEES PAID BY DIRECT DEPOSIT setting to NO > SAVE at the bottom. (You will turn this setting back to YES once the payroll has been finalized and you have seen the final payroll reports.)

5. Select deductions —Add or remove any applicable deductions by clicking the orange "Select deductions" link. Note: Deductions are automatically withheld on regular payrolls. You must manually indicate if you need any deductions withheld within an off-cycle payroll. 

6. Click “Next.”

Pay hourly employees

1. Hours — Enter or import the hours worked for your hourly employees. If you are only paying out the bonus, you can enter 0.00 as the hours worked. 

2. Add/remove income types — Click the orange "Add/remove income types" link and select "Bonus". Note: Other earnings that are set to be paid out with each pay cheque will also be included and displayed at this time. 

3. Basic exemption (default: Yes, until changed.) — Uncheck the orange box if you do not want to apply the annual basic Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) exemption for the desired employee. 

   Notes:

   • It is recommended that employers uncheck the box for all employees, as the basic exemption amount is not intended to be applied to bonus-only payrolls. Running a bonus off-cycle payroll, in addition to regular payroll with the Basic Exemption box checked in both payrolls,  can result in the employee underpaying CPP/QPP. 
     
     

   • The Wagepoint system does not annualize (provide an annual estimate on) the tax on bonus payments. It is taxed the same as regular pay, which can result in the employee paying a bit more tax than when the bonus method is used.
     
     If you would like the tax amount to align more closely with what is in the CRA’s Payroll Deductions Online Calculator (using the bonus method), you can reduce the tax in our system by navigating to Employees> clicking the employee name > Tax Info > entering a negative amount in the “Add Additional Tax” field (the amount you want to reduce the Federal Tax by) > Save Changes.
     
     Please note that you can not reduce the “Add Additional Tax” amount to the point that the federal tax is in a net negative value. You will need to remove this amount after the payroll has been finalized and you have confirmed the reports are showing.
     
     

   • CPP/QPP contributions for eligible employees will still be calculated when the Basic Exemption box is unchecked. However, the annual exemption amounts will not be applied.
     
     For example, if an employee is paid weekly, the annual basic CPP exemption amount of $3,500 will be divided by 52 pay periods, totalling $67.30 per pay period. Based on a sample gross pensionable income of $1,000, the employee’s CPP contributions per pay period will be calculated as follows:
     
     

     Gross pensionable income	Basic exemption	CPP rate	CPP contribution for the period*
     $1000	$67.30	5.45%	$50.83
     $1000	$0 (if you uncheck the box)	5.45%	$54.50

     
     

     *CPP contribution = (Gross pensionable income - Basic exemption per period) x CPP rate of 5.45%

4. Pay? (default: Yes, until changed) — Set the toggle to "No" if you want to exclude an employee from the current payroll. Note: Once changed, the current setting will be the new default, which means you will need to set the toggle back to "Yes" when you run payroll next. 

5. Click “Save/next.” 

Pay salaried employees

1. Hours — Enter the hours worked. If left blank, the Expected hours per week value or the default 40 hours per week, divided by the number of pay periods in the selected frequency, will be used. For example, a bi-weekly employee's paystub will display 86.66 hours if left blank.

2. Normal pay — Gross regular wages will be calculated and displayed using the salaried employee's annual rate of pay divided by the number of pay periods in the selected frequency. 

3. Current pay — Same as Normal pay; however, you can edit the Current pay amount if you want to make adjustments for employees who were hired or terminated in the middle of the pay period. Note: You will need to manually adjust this amount for salaried employees who accrue vacation pay when they take vacation. The accrual balance will then need to be drawn down. 

4. Add/remove income types — Click the orange "Add/remove income types" link and select "Bonus". Note: Other earnings that are set to be paid out with each pay cheque will also be included and displayed at this time. 

5. Basic exemption (default: Yes, until changed.) — Uncheck the orange box if you do not want to apply the annual basic Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) exemption for the desired employee. 

   Notes:

   • It is recommended that employers uncheck the box for all employees, as the basic exemption amount is not intended to be applied to bonus-only payrolls. Running a bonus off-cycle payroll, in addition to regular payroll with the Basic Exemption box checked in both payrolls,  can result in the employee underpaying CPP/QPP. 
     
     

   • The Wagepoint system does not annualize (provide an annual estimate on) the tax on bonus payments. It is taxed the same as regular pay, which can result in the employee paying a bit more tax than when the bonus method is used.
     
     If you would like the tax amount to align more closely with what is in the CRA’s Payroll Deductions Online Calculator (using the bonus method), you can reduce the tax in our system by navigating to Employees> clicking the employee name > Tax Info > entering a negative amount in the “Add Additional Tax” field (the amount you want to reduce the Federal Tax by) > Save Changes.
     
     Please note that you can not reduce the “Add Additional Tax” amount to the point that the federal tax is in a net negative value. You will need to remove this amount after the payroll has been finalized and you have confirmed the reports are showing.
     
     

   • CPP/QPP contributions for eligible employees will still be calculated when the Basic Exemption box is unchecked. However, the annual exemption amounts will not be applied.
     
     For example, if an employee is paid weekly, the annual basic CPP exemption amount of $3,500 will be divided by 52 pay periods, totalling $67.30 per pay period. Based on a sample gross pensionable income of $1,000, the employee’s CPP contributions per pay period will be calculated as follows:
     
     

     Gross pensionable income	Basic exemption	CPP rate	CPP contribution for the period*
     $1000	$67.30	5.45%	$50.83
     $1000	$0 (if you uncheck the box)	5.45%	$54.50

     
     

     *CPP contribution = (Gross pensionable income - Basic exemption per period) x CPP rate of 5.45%
     
     

6. Pay? (default: Yes, until changed) — Set the toggle to "No" if you want to exclude an employee from the current payroll. Note: Once changed, the current setting will be the new default, which means you will need to set the toggle back to "Yes" when you run payroll next. 

7. Click “Save/preview.”

Review and approve payroll

1. Click "View" to review the payroll details for each employee or "View all" to see the pre-payroll register report. 

2. Employees with an active bank account in the system will be indicated by a green checkmark. They will be paid using direct deposit unless direct deposit has been disabled in the company settings. Note: You will need to write paper cheques to employees who are not set up for direct deposit. 

3. Click the checkbox to confirm that you have reviewed the details.

4. Click “Approve payroll” to finish processing your payroll.

5. Payroll approved email notice — If enabled, you will get an email confirmation that payroll has been approved for the current pay period and is pending finalization.

6. Reports available notice — If enabled, you will get an email confirmation that payroll has been finalized and payroll reports are available to review. 

Paying employees and remitting taxes

1. Navigate to the Reports > Payroll invoices tab once you have confirmation that the payroll has been finalized.

2. The total amount indicated on the payroll invoice will be collected from your company bank account on the date that payroll is finalized. Ensure you have sufficient funds in your company bank account to avoid any penalties due to insufficient funds (NSF). 

3. Funds for net pay — This is the total amount of funds that will be collected from your company bank account to pay employees who are set up for direct deposit. This will match the "Deposit summary" report. Note: You will need to write paper cheques to employees who are not set up for direct deposit or if you have disable direct deposit in your company settings.  

4. Source deductions — This is the total amount of funds that will be remitted to the CRA/RQ on your behalf. This will match the "Receiver general" report, where you can find a detailed breakdown of the taxes withheld. Note: You will need to remit taxes to the government manually if you have disabled tax remittances in your company settings. 

5. Wagepoint processing fees — This is the total amount of fees collected for using Wagepoint to run your payroll. 

6. GST/HST sales tax — The total amount in sales tax that is calculated on the processing fees. 

If applicable, the payroll invoice report will also include collections for Workers' Compensation, Employer Health Tax (EHT) and/or Health Services Fund (HSF).