Appears to be withholding CPP incorrectly
Clarity appears to be withholding CPP incorrectly.
Causes:
Clarity calculates CPP by taking into account the basic exemption that every employee is allowed.
Solution:
How Clarity calculates CPP:
(2015 values used from http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/cnt-chrt-pf-eng.html)
Example pay:
Employee is paid semi-monthly (24 times per year).
Pay amount: $3000.00
To calculate the amount of CPP, it’s usual to multiply the pay amount (minus any exempt wages which are not used in this example), by .0495.
This would result in: 3000 x .0495 = 148.50
What Clarity does is subtract the appropriate Basic Exemption amount from the total thus:
$3500 (2015 basic exemption) / 24 (pay periods) = 291.67
$3000 (actual pay) – 291.67 (per pay period portion of exemption) = 2708.33
2708.33 * .0495 = 134.06
The amount will appear low if the exemption is not taken into account.
You can see this in action when you go to ‘Employees > Paycard History’ in Clarity and look at the ‘Base Wage’ column next to the CPP code. The gross in this example would show $3000 and the Base Wage would show $2708.33. If you reverse the calculation by dividing the basic exemption amount by your number of pay periods, then adding this amount to the Base Wage listed, you should reach the Gross wage amount.
This method will result in an employee reaching the maximum tax amount, $2,356.20 at $50,100.00 in wages.