T4 Adjustments to CPP, EI and PPIP

Updated: 2024-01-09

TaxCycle can automatically adjust CPP, EI and PPIP contributions on T4 slips to the required premium contribution amount. It then includes these adjusted amounts in the T4 Summary.

Set Adjustment Thresholds

Configure the thresholds for T4 adjustments on the T4AdjustmentOptions worksheet.

1. Press F4, search for T4AdjustmentOptions and then press Enter to open the worksheet.
2. For each source deduction type (CPP, EI and PPIP), check one of the following options:
   • None if you do not want to adjust the premiums.
   • Adjust to the calculated required contribution to add or subtract amounts from the tax withheld (up to the amount you specify in step 3) in order to meet the required contribution (premium).
   • Adjust to the calculated required contribution if the difference exceeds: and enter the threshold amount. TaxCycle adds or subtracts amounts from the tax withheld (up to the amount you specify in step 3) in order to meet the required premium.
   • Adjust only if contributions exceed the annual maximum contribution or for under-contributions. TaxCycle adds over-contributions to the tax withheld and deducts some or all of the under-contributions from income withheld (up to the amount you specify).
3. Enter the maximum amount for TaxCycle to take from the tax withheld in order to correct differences. You must set this amount for any under-contribution from the income tax withheld.

Set Default T4 Adjustment Thresholds for New Files

You can configure the defaults on the T4AdjustmentOptions so they are entered in every new file you create or carry forward.

1. To open options from the Start screen, click Options in the blue bar on the left side. If you have a file open, go to File menu, then click Options.
2. On the left side of the screen, expand the section for a particular slips module, such as T4/T4A, T5, T5018, or NR4. Then click on New File to set the options for all years of slips.
3. Expand New File and click on a particular year to set different options for a given slip year.
4. Select your preferred method of adjustment:
   • None
   • Adjust to premium
   • Adjust to premium over threshold
   • Adjust only if contributions exceed the annual maximum contribution or for under-contributions
5. In the Federal field, enter the maximum amount to take from federal tax withheld.
6. Based on the method of adjustment you choose, enter the amount of difference which will trigger the adjustment.
7. These settings will transfer to the T4AdjustmentionOptions worksheet when you create or carry forward the file. If the values set in options differ than those on the worksheet, you will see a review message to prompt you to review or update the values in the file.

T4 Adjustments in Action

1. At the bottom of the T4AdjustmentOptions worksheet, you can see the comparison of the actual amounts vs. the adjusted amounts, including the variance.
   
2. On each T4 slip, you can see the adjustment by comparing the Actual and Adjusted columns. Amounts in the Adjusted column are included in the totals on the T4 Summary.
   
3. If TaxCycle detects an under-contribution because there isn’t sufficient tax to cover the shortfall or because you haven’t specified a maximum amount to take from tax withheld, a review message appears indicating that CPP and/or EI have been adjusted and those adjustments exceed any adjustment to income tax withheld. If there is still tax available, you can increase the maximum amount to take from tax withheld on the T4AdjustmentOptions worksheet. Or, you can sign off on the review message.