CPP/QPP and EI/QPIP deficiency causes

Reasons for CPP/QPP deficiencies:

• Birth dates - If an employee turned 18 or 70* in the year, a CPP/QPP deficiency will display on your reports. If the birth date is correct and the exemption status was updated at the correct time, an adjustment is not required.
• The Applicable Period of Time on the timesheet was incorrectly selected.
• Bonus Run
  • CPP/QPP was not deducted or was incorrectly calculated
  • No time taken - Bonus Tax Method was not selected for Applicable Period of Time on the timesheet.
• Vacation Payments
  • Vacation pay was paid in advance and the time off was less than a regular pay period. When the employee is paid for the remainder of the same pay period's earnings, the exemption was applied again causing the individual’s recorded weeks in the year to exceed 52.
• Manual payment entries during the year - CPP YTD maximum was not met:
  • CPP/QPP exemption applied in error
  • CPP/QPP calculated amount was incorrect
• Second payments - issued on the same pay period as regular cheque - pay period exemption applied twice.
• Year-end adjustments to gross pay or taxable benefits did not have a corresponding adjustment for CPP/QPP.
• CPP/QPP was refunded due to exempt status not being put in place on time. Pensionable earnings were not adjusted.
• Employee made exempt or subject to CPP in error (timing issues associated with the completion of a CPT30 election)
• Incorrect code set up (Earnings or Taxable Benefits)

* Quebec employees receiving pensionable earnings are subject to QPP contributions even if they are over 70.

Note: Employees who are exempt from CPP will appear on the deficiency report. No action is required.

Reasons for EI deficiencies:

• Owners (may look like they are deficient)
• Year-end adjustments to gross pay or taxable benefits did not have a corresponding adjustment for EI.
• Incorrect code set up (Earnings or Taxable Benefits)
• Employee is Exempt (will appear on the balancing report as X, N, or B)

  • X = Exempt from EI

  • N = Exempt from EI; 1.4 Rate

  • B = Exempt from EI; 1st Reduced Rate

• Any payments made that had EI overridden to zero or calculated incorrectly.

Note: Valid employees who are exempt from EI will appear on the deficiency report. No action is required.

Reasons for QPIP deficiencies:

• Year-end adjustment to gross pay or taxable benefits did not have coinciding adjustments for QPIP.
• Incorrect code set up (Earnings or Taxable Benefits)
• Any payments made that had QPIP overridden to zero or calculated incorrectly.

Note: Valid employees who are exempt from QPIP will appear on the deficiency report. No action is required.