If you are providing a Group RRSP plan for your employees, you can easily set up RRSP contributions using our easy Pay Rules. Group RRSP plans may be mandatory in your province for certain organizations.
First, determine who is contributing: the employee, the employer or both. Then follow the steps below to set up each scenario:
Employee Contributes
A. Go to Company Settings.
B. Click on Pay Rules.
C. Select the Deductions tab.
D. Click Add New Rule.
E. Fill the Name, Description, and GL of the New Rule.
F. Click on Save.
G. Check the boxes for Enabled and Reduce Taxable Gross. This can help reducing the amount of taxable income for the employee.
H. Click on Save.
The funds will be deducted from your employee’s pay and you will need to send them into your Group Plan Administrator.
**If you do not have a group RRSP but the employee contributes to their own RRSP, you can also check off Non-Cash in the deduction rule. This will simply reduce taxable income but the employee will keep the cash. It is your responsibility to ensure at year end that the amounts that were deducted were in fact submitted by the employee to their RRSP. A statement of their contributions to their plan will satisfy this.
To implement the new deduction rules for specific employees, navigate to the Employees section:
I. Go to Employees.
J. Click the Ellipses.
K. Select Profile.
L. Select Payroll.
M. Under the Vacation section, Click the > to edit.
N. Click Add Deduction +.
O. Click on the Deductions dropdown.
P. Choose RRSP Employer Cont.
Q. Add the $ or % amount for the employee’s contribution per pay.
R. Click on Save.
Employer Contributes
For this to work you need a Benefit and Deduction rule combination.
A. Go to Company Settings.
B. Click on Pay Rules.
C. Select the Deductions tab.
D. Click Add New Rule.
E. Fill the Name, Description, and GL of the New Rule.
F. Check the box for Enabled and Reduce Taxable Gross. This can help reducing the amount of taxable income for the employee.
G. Click on Save.
H. Click on Benefits.
I. Click on Add New Rule.
J. Enter New Rule Name, Description, and GL Code.
K. Check Enabled to have the rule run in every pay run.
L. Select the check boxes for CPP, EI, Federal Tax and Provincial Tax.
M. Click Save.
*In some instances the amounts may not be subject to EI, please see here to see if your plan qualifies for this.
N. Go to Employees.
O. Click the Ellipses.
P. Select Profile.
Q. Click Add Benefit +.
R. Click on the Deductions dropdown and choose RRSP Employer Cont.
S. Add the $ or % amount for the employee’s contribution per pay.
T. Click on Save.
U. Go back to the Payroll section.
V. Select Deductions.
W. Click on Add Deduction +.
X. Click on Deductions dropdown and choose RRSP Employer Cont.
Y. Add the $ or % amount.
Z. Click on Save.
*Hint: the benefit amount and deduction amount for the employer portion should be exactly the same.
Both Employee and Employer Contribute
Follow the steps for both instances above to create all 3 rules (employee deduction, employer benefit and employer deduction).
Use the Pay Explorer Report with Report Type custom to select these rules to run a report to see what you need to contribute to your plan.