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Ever since Jan 2013, our GP10 Bonus paycodes calculate tax at a flat rate of 10%, without regard to the person's regular pay or salary. It did not behave like this in any other year. Anyone else see this issue?
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oh wow looks like I already posted this back in April. Santa can bring me early retirement!!
I never considered a Bonus as a lump sum payment - didn't there used to be specific tax calculations for bonus pay (from what I remember back in my payroll days)?
10% (unless you are in Quebec) is the government mandated deduction rate for lump sum payments up to $5000. Run a test between $5k and 15k and watch the rate change. It will change again over $15k.
source
www.cra-arc.gc.ca/.../wthhldng-eng.html
Dear Santa i'd like to work somewhere that I get a $15k bonus.
I realize I am replying to an older thread, but Yes, I noticed this issue, and wasn't sure if it had always been like that and if I was imagining things. I noticed this on April 24 (my internal IS TIcket date). What we noticed is this:
When a Bonus is paid by itself, taxes are calculating as a flat 10%.
When a Bonus is added to regular pay, it is much higher - probably based on b/w income.
I ran a few tests with different paycode settings, using a paycode called “TEST”.
As long as you do not use PayType “Bonus” or Reference “Lump Sum Payout” the taxes should be okay.
I don’t like that the tax calculation is much higher when paying Salary on top of it but that's something to take up with mister Harper!
I used two different Test employees, the first test with Bonus set up as a Bonus. I calculated a batch with Bonus and Salary paycodes, Salary by itself, and Bonus by itself.
Bonus Paycode set up as a Bonus:
Bonus+Salary Salary only Diff due to Bonus Bonus only
Emp 1 576 248 328 125
Emp 2 1340 849 493 125
The second test uses Bonus Paycode set up as Regular Pay:
Emp 1 670 248 422 193
Emp 2 1385 849 536 189
What I would recommend, if you are running a Bonus by itself, change the paycode to “Regular Pay” and the tax will calculate as in Test #2 (193 and 189). If you are running a Bonus as part of a payroll, change the paycode to “Bonus” and the tax will calculate as in Test 1 (576 and 1340 in total)
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