How to create a remittance of uncontributed EI or CPP into the next calendar year

• The PIER report is verified and showing that I have not deducted enough CPP or EI. If the bank is already reconciled for the year (Dec. 31 calendar year end), how can I remit the short deductions in the new calendar with out affecting the bank / cash accounts for the Dec. 31 year end?
• I have confirmed with the CRA (other than the Sage 50 PIER report) that CPP or EI was under contributed
• How do I accrue the EI payable and CPP Payable accounts to reflect a future payment in the new calendar year of short uncontributed EI or CPP for the previous calendar year?
• The employee is still on the company payroll for the new calendar year

CAUTION: Use caution when working with the below product functionality. Always create a backup of your data before proceeding with advanced solutions. If necessary, seek the assistance of a qualified Sage business partner, network administrator, or Sage customer support analyst.

CAUTION: 

Notes:

• Before following this KB article, speak with a CPA specialist to determine if this solution is applicable to your situation as it may not work for everyone
• Every employer (business number) is required to remit the exact EI and CPP required, regardless of where the employer has worked in the past
• Only the employee is required to file their own taxes. The employer is not responsible for determining what should be deducted based on where the employee worked before in the calendar year
• There can be deduction penalties as a result of under-remitting
  • https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-overview/penalties-interest-other-consequences/payroll-penalties/failure-deduct.html
  • https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/deduction-errors.html

• Every employer is required to assess the Year End Review based on the CRA PDOC prior to starting the new calendar (best to do this before creating the last paycheque of the calendar year for the employee)

  
  

The goal of this article is:

• To correct the payroll tax remittance and
• To not affect the Net Pay of the existing employee paycheques for the problem year
• To not affect the bank balance of the incorrectly calculated paycheques and provided that:
  • The employee will be paid in the new calendar year
• Confirm with the CRA the current remitted balance is correct and that the employee deductions are correct for the year

Step 1:

• Create a non-gross income paycheque for the employee on December 31st with the following details:
  • Enter the identical CPP or EI amount in Loans and CPP or EI This Period box and this should generate a Withheld Amount but not a Net Pay amount
  • Ensure there is not a Gross Pay amount only for this purpose of the CPP / EI adjustment
  • Cheque number can be called CPPEIADJ if you like. This step is to correct the employer CPP / EI portion

Step 2:

• On January 1st (the next calendar year), you will be taking the amount that is owed by the employee - (debit the bank account). You will be putting the Payroll Advance created on Dec 31st of the last calendar year into the bank account. This amount will be paid off (credit the bank) when remitting to CRA in Step III
• In the Paycheques module, on the Loans row, click on the This Period column. This will clear out the Year To Date column.

Step 3:

• Follow How to do a payroll remittance