New TD1, exemption amounts need to be updated for the new calendar year 2016
After installing and activating the new payroll tax update (Install & Activate Payroll Update for Jan 2016) the next step is to update the TD1 values for all employees. BCITAX (or whichever provincial tax is applicable for your province) and INCTAX (federal) taxes will need to be updated.
There are two ways to update TD1 values:
- If the number of employees is small, the update can be done manually one employee at a time. Go to Payroll Employee / Employees ane open the Employee Record. Go to the Taxes tab. Select a tax code and then click on the Tax Info button on the bottom of the screen. Enter the new TD1 value in the field called TD1 - Total Tax Credit. Other applicable values, such as Tuition, Pension or Additional Tax can also be added on this screen. Click Save. Repeat for the other tax(es).
- If the number of employees is large, they can all be updated at once. Go to Payroll Employees / Update TD1. Select a tax code and set the criteria for the range of employees that should be updated. Enter the Change By field - either as a Cost of Living factor, or an Amount Increase or Decrease and click Update. The calculation uses the employee's current TD1 value and the Change By figure to come up with the new amount. When the process is completed, print the TD1 Claim Audit Report to see the old amount and the new updated amount. If necessary, individual employees can be adjusted using the steps in item 1 above. Repeat these steps for the other tax(es)
The new TD1 amounts and cost of living factors for each year can be found on the CRA website, and also in the Readme or Product Update file that comes with each new tax update. This file can be found in the program files directory (usually C:\Sage\Sage 300 ERP\) in the \Docs\72A\ENG folder. That document is attached here for your convenience. Please refer to pages 5-7 for indexing values and new basic exemption amounts for all the provinces.