2024 CPP and QPP Canadian Tax Changes

Changes to the 2024 CPP and QPP Canadian taxes as implemented in Sage 300 CRE.

Canada has implemented new tax changes for 2024. The ceiling for what is now tier one of CPP or QPP will rise to $68,500.00 while additional deductions(taxes) on employees making more than that will be 4% on earnings up to $73,200.00, but will not exceed $188.00 per year. This will also be matched by employers. 

 

Canadian Tax changes 2024

NOTE: 2024 CPP and QPP Canadian Tax Changes require Sage 300 CRE version 23.2 or later.

PTCA2401, introduces several new taxes for 2024, such as CPP2, CPP2_E, QPP2, and QPP2_E.

There are two options for adding these new taxes to the CA Tax group listed below. 

If you do NOT have other taxes such as provincial employer paid health taxes, you can use Option 1. When there is no tax file and you download a new tax file, these new taxes are automatically included in the CA Tax Group. If you have additional provincial employer paid taxes such as health taxes, you will use Option 2.

 

Option 1: Rename the tax.prx they are currently using and then download a new tax file

1. Using File tools to rename the tax.prx, IE: OLDTAX2023.
   Note: Do not use this option if you have customized taxes like the BC Health Tax.
2. If you do rename the tax.prx, once you complete the download of the new tax file, be sure to add the RP number to the Federal and Provincial tax groups.

 

Option 2: Add the new taxes to both the Federal and PQ Provincial tax groups. Do not add them to the bottom of the tax groups. The existing taxes on the Federal and Provincial need to be reordered and then new taxes added to each group in a specific order. (See example).

FEDERAL TAXES:

1. Download the new tax update first through Tools, Download taxes.
2. If you have completed all payroll for 2023, click the Update tax file when download completes option.
3. Go to Setup, Taxes, Tax groups.
4. Select Tax level of Federal, and Tax group CA.
5. Tab through the fields and on the table remove EI_E and EI taxes.
6. Using the list button add CPP2, CPP2_E, EI and EI_E taxes back on the table.
7. Save your changes.
    

PQTAX is setup as a Federal Level tax, not a Provincial Level tax. The tax level must be changed so that it can be added back to the PQ Provincial tax group.

Note: When adding taxes to the PQ Provincial tax group, you need to change the tax PQTAX to a provincial tax, then add it to the PQ Tax group. Continue adding the remaining taxes to the PQ Provincial tax group. Save your changes and then change PQTAX back to the federal level tax. PQTAX is a tax/deduction and needs to be setup in this order. 

1. Go to Setup, Taxes, Tax Rates.
   1. Using the list button select PQTAX. Change the Tax level to Provincial, Save and close.
2. Go to Setup, Taxes, Tax Groups.
   1. Enter the Tax Level of Province and select PQ.
   2. Tab down to the table and add PQTAX, followed by QTX, QHSF, QPIP, QPIP_E.
   3. Verify that you have nine (9) taxes on this tax group.  Save and close.
3. Go to Setup, Taxes, Tax Rates.
   1. Using the list button select PQTAX. Change the Tax level to Federal, Save and close.

  Note: You should see 9 taxes within this tax group. Screen shots below show the 9 taxes and in the order in which they must appear. 

For additional information: https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2023/maximum-pensionable-earnings-contributions-2024.html