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Last Updated: 2023-07-14
Example: Calculate Manitoba Retail Sales Tax on Employer-Paid Premiums (CAN)

Example: Calculate Manitoba Retail Sales Tax on Employer-Paid Premiums (CAN)

This example illustrates 1 way to create a deduction that calculates the Manitoba Retail Sales Tax (RST) based on the worker's province of residence.
Jon's company calculates sales taxes on employer-paid insurance premiums for the employee payroll deductions. Jon's company employs workers from all over Canada, including Manitoba. For employer-paid premiums, Manitoba RST is based on the province of residence, while Quebec and Ontario sales tax is based on the province of employment. As a result, Jon needs to define 2 separate deductions:
  • 1 that calculates the Manitoba RST for Manitoba resident employees.
  • 1 that calculates sales tax based on province of employment for employees who aren't residents of Manitoba.
  • Add the
    Manitoba Retail Sales Insurance Premium Tax (MBRST) [CAN]
     deduction to Manitoba's tax setup.
  • Add the
    Manitoba Retail Sales Insurance Premium Tax (MBRST) [CAN]
     deduction to your account posting rule set.
  • Security:
    • Set Up: Payroll - Company Specific (Taxes) - CAN
       domain in the CAN Payroll functional area.
    • Set Up: Payroll (Calculations - Payroll Specific)
       domain in the Core Payroll functional area.
  1. Create the deduction that calculates the Manitoba RST for Manitoba residents.
    1. Access the
      Effective Dated
       tab on the
      Create Deduction
       task.
    2. Select
      Canada
       for
      Country
      .
    3. In the
      Criteria
       section, select:
      Field
      Setting
      Worker Eligibility
      Worker (CAN): Resident Province = Manitoba (as of Sub Period End Date)
    4. In the
      Calculation Details
       section, select:
      Field
      Setting
      Calculation
      Original Amount + Sales Tax (CAN)
      Calculation Worktag
      Province
      Worktag Type
      Resident
      Worktag Type
       displays automatically after you save changes to the task. The
      Resident
      Worktag Type
       displays if you select:
      • Canada
         for
        Country
        .
      • Manitoba
         for Worker Eligibility Resident Province on the
        Effective Dated
         tab.
      • Employer Paid Benefits
         for the Pay Component Group on the
        Non-Effective Dated
         tab.
      • Province
         for the
        Calculation Worktag
         on the
        Effective Dated
         tab.
    5. Add these related calculations to the deduction:
      Related Calculation
      Groups
      Override Calculation
      Display? (on Results)
      Original Amount
      RST Manitoba Taxable
      Set according to where you retrieve the amount. Example:
      Benefits: Employer Cost
      .
      Yes
      Sales Tax (CAN)
      Yes
    6. Add the
      Employer Paid Benefits
       pay component group on the
      Non-Effective Dated
      Groups
       tab.
  2. For employees who aren't Manitoba residents, create the deduction that calculates sales tax based on province of employment.
    1. Access the
      Effective Dated
       tab on the
      Create Deduction
       task.
    2. Select
      Canada
       for
      Country
      .
    3. In the
      Criteria
       section, select:
      Field
      Setting
      Worker Eligibility
      Worker (CAN): Resident Province <> Manitoba (as of Sub Period End Date)
    4. In the
      Calculation Details
       section, select:
      Field
      Setting
      Calculation
      Original Amount + Sales Tax (CAN)
      Calculation Worktag
      Province
      Worktag Type
      Work
      Worktag Type
       displays automatically after you save changes to the task. The
      Work
       type displays for deductions configured with the
      Employer Paid Benefits
       pay component group.
    5. Add these related calculations to the deduction:
      Related Calculation
      Groups
      Override Calculation
      Display? (on Results)
      Original Amount
      RST Taxable [CAN]
      Set according to where you retrieve the amount. Example:
      Benefits: Employer Cost
      .
      Yes
      Sales Tax (Can)
      Yes
    6. Add the
      Employer Paid Benefits
       pay component group on the
      Non-Effective Dated
      Groups
       tab.