Determine the CPP/QPP exemption for an Extra Run payment

If an employee was short-paid on a previous payroll, you must determine whether the CPP/QPP exemption applied in full in order to calculate how much CPP/QPP should be deducted from the excluded pay, if any. There are two ways to do this, depending on the status of the payment.

Reversal Method

You can avoid manually calculating CPP/QPP if the short-payment is noticed before the pay is deposited. With this option you can stop the payment, reverse it and reissue a new payment with an extra run. For more information, see Reissue a payment with an extra run.

OR

Manual calculation method

If the short-payment is not noticed in time to reverse and replace it, you must manually calculate how much of the employee's exemption remains and apply that amount to the CPP/QPP payment on the extra run.

Example:

Jane Doe was short-paid with the last regular payroll. She should have been paid for 40 hours, but due to a typo, she was only paid 4 hours. Her rate of pay is $10 per hour. She received $40 gross pay instead of $400 and you want to pay her the $360 difference through an extra run. Jane is paid weekly.

Note: If taxable benefits are included with your scenario, include these values in your calculation.

  1. Look up the CPP/QPP Basic Exemption for weekly payrolls. You can find this on the Ceridian Compliance Centre. (This amount varies by payroll type and can change yearly, so check that you have the correct value.)

    Jane was paid $40, so she still has $27.30 left on her exemption ($67.30 exemption - $40 paid = $27.30 remaining exemption).

  2. Subtract the remaining exemption from the extra run's gross pay amount to find Jane's non-exempt earnings ($360 gross pay - $27.30 exemption = $332.70 non-exempt earnings).
  3. Multiply her non-exempt earnings by the CPP/QPP rate to determine the amount of CPP/QPP you should deduct from the extra run ($332.70 non-exempt earnings x 5.7% CPP/QPP rate = $18.96 CPP/QPP deduction).
  4. If this correction is recorded as a year-end adjustment, after the final payroll of the year has processed, confirm this deduction will not exceed Jane's yearly maximum allowable contributions for CPP/QPP. You can find this on the Ceridian Compliance Centre. If it does, deduct only that portion of the deduction amount that brings her CPP/QPP to her yearly maximum allowable contribution.