Every eight to nine years there is an extra pay period, for example, 27 instead of 26 bi-weekly pay periods.

At the beginning of a year with an extra pay period, follow the steps below to have Canadian Pension Plan (CPP) and CPP_E calculate properly. The example given below is based on a bi-weekly pay period. If you use weekly pay periods you may substitute 53 for 27.

Follow the steps below before processing the first check of the year with 27 bi-weekly periods to have Canadian Pension Plan (CPP) and CPP_E calculate properly:

1. Go to Payroll, Tools, Formulas.
2. Click Index, select PR - Formulas, and then click OK.
3. Select PR CPP, click Copy, and type Temp PR CPP*27.
4. Click OK and then click Change.
5. Replace Pay Period with 27 as in the example below:
   TEMP PR CPP*27
   MIN (1801.80 - (Lookup (YTD Tax [Employee Tax], Employee [PR Cheque], 1, "CPP") - Check Tax), 0.0495 * (Check Taxable - IF (Cheque Sequence [PR Cheque]) = "1st", TRUNC (3500/27, 2))))
6. Click OK and then click Close.
7. From Setup, select Taxes, Tax Rates.
8. Type CPP, and then press Tab twice.
9. Click in the Formula box, and then click List.
10. Select Temp PR CPP*27, and then click OK.
11. Click Save and then click Close.

Notes:

• At the end year with an extra pay period and prior to printing cheques for a year without an extra pay period, restore the original formula (PR CPP) on the tax. The formula for the employer Canadian Pension Plan looks at the amount calculated for CPP, so it does not require any changes.
• If you withhold Québec Pension Plan (QPP) you must modify the QPP tax in the same manner as the CPP tax.
• No changes are required for Provincial taxes. Provincial tax formulas do not reference the Pay Period, but look up the CPP and QPP tax amounts. Changing the CPP and QPP formulas will adjust the provincial formulas also.