Microsoft Dynamics GP Year-End 2025: Canadian Payroll
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Terry R Heley
Microsoft Employee
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Report***T4 XML Submission Rejection***
The Canadian Revenue Agency has changed the format on the XML file to exclude any optional fields that do not contain values.
This is causing the XML to fail on submission for the field Employment code.
For most companies (who do not have employment codes) this is 00 as not being used in the file, as below example for each employee.
<empt_cd>00</empt_cd>
The employment code field should not be included on the XML file with a value of zero as it is an optional field.
To work around this issue, open your XML file in notepad and remove the above line for each employee if it is 00.
If the tag is populated with a number, it should be left in the file, such as 11, 12,13,14,15, 16 and 17.
_____
I hope you all are enjoying your year-end thus far!
Changes this year for the 2025/2026 Year-End Update can be found Canadian Payroll Year-End and Tax Updates for Microsoft Dynamics GP | Microsoft Learn however, I did want to include some of the main points below:
T4127 updates
T4127-JAN Payroll Deductions Formulas – Effective January 1, 2026 – Canada.ca
Approved Numbers for Quebec
Software Development Number for XML – RQ-25-01-120
RL-1 Slip Authorization number FS2501061 (enter in the Payroll T4/R1 Print window)
RL-1 form and XML – Changes
T4 & T4A XML – Changes
Basic Personal Amount Updates.
Changes this year for the 2025/2026 Year-End Update can be found Canadian Payroll Year-End and Tax Updates for Microsoft Dynamics GP | Microsoft Learn however, I did want to include some of the main points below:
T4127 updates
T4127-JAN Payroll Deductions Formulas – Effective January 1, 2026 – Canada.ca
Approved Numbers for Quebec
Software Development Number for XML – RQ-25-01-120
RL-1 Slip Authorization number FS2501061 (enter in the Payroll T4/R1 Print window)
RL-1 form and XML – Changes
T4 & T4A XML – Changes
Basic Personal Amount Updates.
There are several quality report fixes in this update reported by customers last year.
--Canadian Payroll ROE Insurable Hours does not round box 15A
--CRA rejected T4 XML for the 2024 year all files – Transmitter and REP number changes
--Canadian Payroll T4 requirement and XML for Indian Act RPP contributions and Union dues Code 94 and 95
--CRA rejected T4 XML for the 2024 year due to postal code checks (zip code)
--Canadian Payroll T4 Summary report needs to split CPP2 Box 16 A and 16 (similar to other reports)
Now, let’s get started with our year end steps that should be the same year after year, but still are good reminders for everyone.
What steps should I take to close the year?
~For more detailed steps, please refer to the Year-end closing procedure for the Canadian Payroll module in Microsoft Dynamics GP, by clicking: Year-end closing procedures for the Canadian Payroll module in Microsoft Dynamics GP (Original KB 861806)
--CRA rejected T4 XML for the 2024 year all files – Transmitter and REP number changes
--Canadian Payroll T4 requirement and XML for Indian Act RPP contributions and Union dues Code 94 and 95
--CRA rejected T4 XML for the 2024 year due to postal code checks (zip code)
--Canadian Payroll T4 Summary report needs to split CPP2 Box 16 A and 16 (similar to other reports)
Now, let’s get started with our year end steps that should be the same year after year, but still are good reminders for everyone.
What steps should I take to close the year?
~For more detailed steps, please refer to the Year-end closing procedure for the Canadian Payroll module in Microsoft Dynamics GP, by clicking: Year-end closing procedures for the Canadian Payroll module in Microsoft Dynamics GP (Original KB 861806)
- Complete all the pay runs for the current year.
- Complete any necessary 2025 Payroll reports.
- Make a backup of the data.
- ***Install the 2025 Canadian Payroll Year-End Update/2026 Tax Update. ***
- Complete the “Year End File Reset” process.
- Make a backup of the data.
- Create the T4, T4A, and RL-1 statements, and print the T4, T4A, and RL-1 reports.
- Edit the T4, T4A, and RL-1 records as necessary.
- Create T4, T4A, and RL-1 Summary records.
- Print the T4, T4A, RL-1 reports and create T4, T4A and RL-1 XML file, if appropriate.
- Verify that the Pay periods for 2025 are set up correctly.
Key Points to remember:
- The Year End Close process moves all your current year data into the Last Year (LY) tables, and it doesn’t take the date into consideration. For this reason, it is very important that you complete ALL 2025 Payrolls (step 1) and then complete at least through the year end file reset (step 5) before doing any 2026 payrolls.
- It is vital that you install the Year-End Update before the Year End Reset (Steps 4 and 5) because you are prompted during the Year End Reset to update Basic Personal Amounts. If you miss this, you will need to restore from a backup.
- When you do the Year End Reset it changes the Basic Personal Amounts for employees. Depending on the Province it will either add a fixed amount or increase the amount by an indexation factor as determined by the Provincial Authority.
- This is an all-inclusive update.
Be sure to refer to the 2025 Year-End Blog Schedule to review current and upcoming blog posts and other helpful resource links related to Year-End Closing for Dynamics GP.
Terry Heley
Microsoft
Microsoft
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