Hi @JamesM
No, it doesn't really make sense. Sorry. When on a bi-weekly payroll, the program is supposed to calculate a $134.61 CPP exemption for every pay period, which is 26 times a year. $134.61 x 26 = $3,499.86 = $3,500.00 annual exemption. If you make two pay cheques in one pay period (which happens sometimes for various reasons), and the program uses the $134.61 exemption again on the extra pay cheque (which it has, in my case), the exemption has now just grown to $3,634.47 annually for that employee ($134.61 x 27). Since the exemption can only be $3,500.00 in total, this results in an underpayment of CPP for that employee because too much has been exempted. One pay period is one pay period, no matter how much money a person receives in that period, whether in one cheque or spread over multiple cheques. The program should be designed to calculate that exemption only 26 times per year for Bi-Weekly payroll, 12 times per monthly, 24 times per semi-monthly, 52 times per weekly, etc. You get my point. The exemption should not be calculated based on number of pay cheques but rather, on number of pay periods. See the CRA document below for basic exemption amounts based on pay periods, not pay cheques.
Basic exemption chart
Employee's CPP basic exemption amount for various 2020 pay periods.
2020 CPP basic exemption amount by pay periodPay period Basic exemption amount
| Annually (1) | $3,500.00 |
| Semi-annually (2) | $1,750.00 |
| Quarterly (4) | $875.00 |
| Monthly (12) | $291.66 |
| Semi-monthly (24) | $145.83 |
| Bi-weekly (26) | $134.61 |
| Bi-weekly (27) | $129.62 |
| Weekly (52) | $67.30 |
| Weekly (53) | $66.03 |
| 22 pay periods | $159.09 |
| 13 pay periods | $269.23 |
| 10 pay periods | $350.00 |
| Daily (240) | $14.58 |
| Hourly (2,000) | $1.75 |
As it is, I have to manually adjust the CPP deductions after the fact, as the employee paid too little CPP due to the extra exemption. Had I known the program was not behaving as it should, I would have adjusted the CPP up front. Now I know for next time.
Having said that, I thought that was the point of QB separating an unscheduled payroll and a scheduled payroll. In principle, the unscheduled payroll should not have any CPP exemption built into it, whereas the scheduled payroll, which is only scheduled for the number of pay periods there are in the year, should have the exemption and would then produce accurate CPP calculations for the year, in the case of users creating more paycheques than the number of pay periods.
If I'm missing something big here, please chime in someone. As always, thanks for listening to my rant, James!
