Step 3 - Balance & Reconcile

This step will walk you through the balancing and reconciling of your records.

Balancing and reconciling your records can be difficult because changes to one record can impact another and cause it to be incorrect.

For example, if a non-cash taxable benefit is added during the review, the CPP and EI due to CRA may increase. As a result, it's critical to follow a process in which you review your records, make adjustments (if necessary), and then review your records again.

However, we strongly advise you to complete this step so that you can identify and reconcile any potential discrepancies before generating your tax slips. In the long run, this will save you a lot of time (and headaches).

 

 

This flowchart shows the actions you need to complete for this step.

 

 

Part 1 - Add Dental Benefits Codes

Access to Dental Benefits is required to be reported on the T4 slip. You’ll need to input Dental Benefit Codes for all employees in Humi.

1. To do so, head to Payroll.
2. Click the Benefits & Deductions tab and select Benefits & Deductions - Federal Dental Benefit.
3. Assign the relevant code(s) to each employee.
4. To make things simple, employees can easily be assigned to codes in bulk.

Code	Description
Code 1	No access to any dental care insurance, or coverage of dental services of any kind.
Code 2	Access to any dental care insurance, or coverage of dental services of any kind for only the payee.
Code 3	Access to any dental care insurance, or coverage of dental services of any kind for payee, spouse and dependents.
Code 4	Access to any dental care insurance, or coverage of dental services of any kind for only the payee and their spouse.
Code 5	Access to any dental care insurance, or coverage of dental services of any kind for only the payee and dependants.

 

Part 2 - Run the PIER Analysis Report

Run the PIER Analysis Report to audit CPP and EI statutory deductions, as well as QPP and QPIP if applicable

In Reporting, select the Payroll tab and click on the PIER Analysis report. The PIER Analysis Report will help you quickly identify any potential discrepancies in:

• Employee CPP/QPP
• Employer CPP/QPP
• Employee EI
• Employer EI
• Employee QPIP
• Employer QPIP

We recommend doing this review before generating your employee T4 slips and/or RL-1 slips to ensure your business won't receive a Pensionable and Insurable Earnings Review (PIER) from the CRA or a Statement of Employee and Employer QPP Contributions (form LMU-141) or a Statement of Quebec Parental Insurance Plan Premiums (form LMU-150) from Revenue Quebec.

Example

 

You can easily see a discrepancy if there's an amount other than zero in any of the variance fields.

A positive discrepancy means there's an overage (i.e. over-remitted amount), and a negative discrepancy means there's a deficiency (i.e. under-remitted amount).

For overages, the CRA will return the over-remitted amounts to the employee as tax refunds. You will have to make a request to the CRA and RQ respectively to receive your employer portion(s) back.

Please note that it's normal to have minor deficiencies if there are still outstanding payrolls for the current tax year.

If the last payroll(s) for the year hasn't yet been processed, you should verify whether the discrepancies will be covered by the final payroll(s) or not.

 

Things to review in this report:

Canada Revenue Agency

 

Revenue Québec

QPP, QPIP, and ER QPIP Amounts

These amounts represent discrepancies in the Employee and Employer amounts calculated throughout the year versus the statutorily required amounts.

Variance Type	Calculation
QPP	Humi takes the Pensionable Earnings, subtracts the Basic Exemption (based on the Periods Paid and the pay period Basic Exemption Amount, multiplies this amount against the QPP contribution rate, and then subtracts this value from the QPP Deducted.
QPIP Amount	Humi takes the QPIP Insurable Earnings, multiplies this amount against the QPIP premium rate, and then subtracts this value from the QPIP Deducted.
ER QPIP Amount	Humi takes the QPIP Insurable Earnings, multiplies this amount against the ER QPIP premium rate, and then subtracts this value from the ER QPIP Deducted.

 

 

Part 3 - Run the T4 & RL-1 Preview Reports

Run the T4 & RL-1 Preview Reports to verify that earnings and deductions are reporting in the correct boxes

Humi’s T4 and RL-1 Preview Reports are designed to help you quickly review where earning codes are mapped and check for overall accuracy. Doing this review before generating your T4s and RL-1s will help you avoid mistakes and time-consuming T4 Amendments and RL1 Amendments. It allows you to generate a box-by-box preview of your T4s and RL-1s respectively, broken down by each employee.

To access these reports, under Reporting, select the Payroll tab and click on either the T4 Preview report, or RL-1 Preview Report .

You can verify this information within the Employee Profile under the Personal and Job & Pay tabs.

 

Confirm all Income Types are set up correctly

Certain Income Types have specific reporting requirements on the T4 and/or RL-1.

These resources may help you understand the requirements for pay types you have offered employees in the tax year:

• CRA's benefits reference chart
• CRA's special payments reference chart
• CRA's T4 boxes reference list
• RQ’s RL-1 boxes reference list

With this information, you can use the T4 and/or RL-1 Preview reports to ensure that employee tax slips meet the reporting requirements.

 

Get to know your pay types

If you need to investigate the specifics of certain pay types within your account, use the links below to dig into the details:

• Salary & Hourly Compensation Types
• Amounts and deduction behaviours for taxable benefits and allowances
• Amounts and deduction behaviours for additional income types

 

Helpful CRA & RQ Resources

While Humi automates many of these processes, it's a best practice that employers also periodically perform a self-directed review of all payroll records.

The CRA has published a series of helpful resources to facilitate this review process:

• Calculation of CPP contributions (multiple pay periods or year-end verification)
• Payroll Deductions Online Calculator (PDOC)
• Pensionable and Insurable Earnings Review (PIER)

The RQ has published a series of helpful resources to facilitate this review process:

• WebRAS - Calculation of source deductions and employer contributions
• Calculating source deductions and employer contributions

 

Part 4 - Use the Tax Form Preview PDFs

Use the T4 and/or RL-1 Preview PDF downloads to make sure that all employees have an accurate social insurance number and email address

The CRA and RQ use the social insurance number reported on the T4 and RL-1 to identify the taxpayer. If this number is incorrect, your employee will have problems when they file their personal taxes.

You will also want to make sure that your employees all have an accurate email address, and that they will have access to this email address. This is important because Humi will send employees their T4s and RL-1s via a password-protected email. Therefore, all employees (Active and Terminated) must be able to receive this email from Humi.

Confirm that your employee's personal information is correct:

• Employee First Name (Legal)
• Employee Last Name (Legal)
• Employee Address
• Employee valid Email (for terminated employees, this will be their personal email)
• Social Insurance Number (for security reasons, the T4 Preview Report will show a partially redacted SIN)

Admins can update employees' legal names, addresses, emails, or SINs directly from their Employee Profiles under the Personal or Job & Pay tabs.

 

Part 5 - Use the Year-End Adjustment Tool

With Humi, it’s easy to make any adjustments needed—simply use our Year-End Adjustment tool! This is a powerful tool and admins should only use it after a thorough review of payroll data and the T4 and RL-1 requirements.

For a step-by-step guide on using the Year-End Adjustment Tool, click here.

 

(Optional) Correct any issues you’ve identified in the PIER Analysis Report, and/or T4/RL-1 Preview Reports

The Adjustment Table has a row for every employee who was on at least one payroll in the year. The table also has a column for every type of Pay, Additional Income, Benefit and/or Deduction that was on at least one payroll in the year.

To make an adjustment, double-click on the field, and enter the change.

• To increase the value of an earning or benefit, enter a positive dollar value.
• To increase the value of a tax or deduction, enter a positive dollar value.

Humi automatically saves the changes and reflects them on the T4.

 

 

Add Pension Plan Information (if required)

If you've used any of the Defined Benefit Pension Plan, Defined Contribution Pension Plan, or Profit Sharing Plan benefit types, then you will need to fill in Box 50 with the pension plan registration number, and Box 52 with the Pension Adjustment amount on the T4s after they're generated.

 

Part 6 - Remit Outstanding CPP, QPP, EI, QPIP and Income Tax Statutory Deductions

It’s a good idea to reconcile the amounts paid to the CRA and RQ with the total statutory deductions for the year, and, if necessary, make any additional payments.

Payments received by the CRA are viewable in your MyBusiness account, and payments received by RQ are viewable in your clicSÉQUR account. You can use these accounts to compare received remittance to the total statutory deductions. 

You'll need to remit any owed income tax, CPP/QPP, EI, or QPIP statutory deductions before or as part of the final remittance for the tax year through your accounts with CRA and RQ.