How to Setup RRSP

In order to setup RRSP you need to define two payroll categories. One for the Employer portion of RRSP and one for Employee portion.

Employee Contribution

To set up RRSP contributions for your employees, create a deduction payroll category under Setup > Payroll Settings > Payroll Categories. Click on the add (+) button and select deduction from the list of options. Complete the Basic Information under the General Tab. Also, under the Deduct before window federal, provincial and Quebec (if required) income taxes flags should be checked.

For the Type choose Formula and then click on the Formula button that appears. Use the Payroll category button to add the all of the Earnings categories that can be used in the RRSP calculation (Salary, Hourly Wages, Overtime, Vacation Pay etc.). If the contribution is the same for all employees then you can enter it here as a percentage. If the contribution rate is determined at the employee level you can enter it here as 100% but set the appropriate rate on the employees’ master Paycard.

Under the Form assignment tab assign the payroll category to Box 20 on T4 and if required in your case on Box D on Releve1.

Once the payroll category setup is complete precede to employee master paycard to set the individual contribution rate under the deduction tab. Depending on how the payroll category was setup you enter appropriate rate in the factor field. If the category was set as standard percentage for all enter 100 here. If the rate is to be set individually then enter the employee’s contribution rate here.

Setting up RRSP–Employer Contribution

To set up Employer RRSP contribution to match employee contributions a Benefit payroll category can be added. To create a benefit payroll category go to Setup > Payroll Settings > Payroll Categories. Click on the add (+) button and select Benefit from the list of options. Complete the Basic Information under the General Tab. Under the SUBJECT TO window Federal, Provincial and Quebec (if required) income taxes flags should be checked.

Under the Type select FORMULA. In Formula definition add the payroll category RRSP (this is employee RRSP) and enter the percentage depending upon how much the employer will contribute for example 100% (if employer matches employee contribution 100%).

Under the Form assignment tab assign the payroll category to Box 40 on T4 OTHER and (if required) on Box D on Releve1. On the Advanced tab check APPLY flag under MAXIMUM PER YEAR and specify the maximum amount the employer will contribute for each employee in the DEFAULT MAXIMUM field. In the BASED ON drop down box select EMPLOYEE YTD AMOUNT.

On Employee master paycard under the Benefit Tab Employer can adjust the amount he wants to contribute for RRSP for this particular employee by adjusting the factor. By default the factor is 100 (i.e. 100% of the formula definition) and if the Employer wants to contribute a different amount for this employee then the factor can be changed to represent the correct percentage.