The following is an example of a configuration for an Employee Deduction and Employer Contribution for RRSP’s.

Please note the actual Expense and Liability accounts will need to be set up prior to this step.

A: Employee Deduction

Step 1: Deduction Setup

Create the new Employee Deduction with the applicable Expense and Liability Accounts.

Employee Deduction

Note: That this deduction has a type of “RRSP” and a category of “Deduction”.

In the Employee Calc No. enter for example “RRSP EE” as the identifier for the calculation.

Step 2: Employee Calc. No.

All Calculations Icon

Click on the “All Calculation” icon to create the calculation.

The following is an example of the Employee RRSP deduction custom calculation.

Your benefits provider would be able to advise on what earnings are included in your calculations.

Calculation

Step 3: Employee Variables

On the Employee Card, click on “Employee Variables”.

Employee Variables

Add the Employee Variable that you have created, in this example, it is “EE RRSP Rate” to identify the fact that each employee could have a different rate.

EE Variable

In this example, the Employee RRSP Contributions is set up as 5% of the Gross Salary per Pay Period. The Gross Salary is $6,260.00 x 5% = $312.50.

Step 4: Calculate Gross

Sample Screenshot

The above shows the Employee Deductions when the “Calculate Gross” function is completed.

B: Employer Contribution

Step 1: Contribution Setup

On the Deductions Setup, create the following:

  1. The RRSP ER is set up as an “RRSP” calculation type, with the Category of “Benefit”.
  2. Set up the RRSP ER in the Employer Calc No.
  3. Click on “All Calculations”,
  4. Ensure that you include that the amount is to be included in Box 40 of the employee’s T4/
  5. Employer RRSP Contributions are included with EI and CPP Calculations. ( unless the employee cannot withdrawal funds before termination or retirement, then the funds would not be included in EI Calculations.
  6. Include with QPP and QPIP Calculations
  7. Benefits Totaling is to be “Employer” to denote that this is a taxable benefit.
RRSP ER

Step 2: All Calculations

In “All Calculations” create the custom calculation.

RRSP ER

Once created, close and proceed to the Employee Card.

Step 3: Employee Variables

Click on “Employee Variables” and add the new variable and set the rate for the employee.

Employee Variables

In this example, the Employer is giving a 5% contribution to the Employee’s RRSP Plan. The Salary per Pay Period is $6,250.00, therefore, the contribution is $312.50.

Step 4: Calculate Gross

Calculate Gross

When the “Calculate Gross” function is completed the amount shows in the “Other” section.

Note: Always review with Canada Revenue Agency the requirements for Employer Contributions to an Employee’s RRSP Plan, along with the Benefit Providers requirements for the contributions.