Back in January, Quickbooks sent a notification about 2022 tax table updates released late on January 7, 2022. Due to the late release, some January paycheques may have been calculated at the 2021 CPP tax rate of 5.45% instead of the 2022 CPP tax rate of 5.7%. Quickbooks has now sent a follow up to provide a solution for correcting the year-to-date tax amounts.
How will QuickBooks correct the 2022 CPP tax?
QuickBooks will create adjustment cheques to adjust the total CPP tax calculations for 2022 to the updated 5.7% tax rate in the coming weeks. The adjustments will add the total CPP tax value not originally calculated for any cheques impacted (the .25% difference). An offsetting “payroll correction” item will also be added to keep the original net pay the same for accounting and reporting purposes.After creating these adjustment cheques, any amount that did not calculate in January will automatically deduct from your employee’s next cheque. The amount that will auto deduct from their next cheque is the direct value of the total “payroll correction” amounts added by the payroll adjustments. These adjustments will correct the year-to-date CPP tax and ensure that the employee won’t owe any tax at the end of the year.
What if you already created adjustments to correct the year-to-date totals?
If you previously created adjustments to correct the year-to-date CPP tax, Quickbooks will not add adjustment cheques, as employees are already at the accurate 5.7% tax rate for 2022.Please reach out to us if you have any questions or concerns.