Processing EHT reports

Payroll processing is applicable for Payroll Cycle and Payroll Off Cycle records.

Viewing EHT deductions

On the Employer Health Tax tab of a Payroll Cycle or Payroll Off Cycle record, you can view if the cycle includes EHT deductions. These details are displayed by legal entity, legal establishment, or year:

  • Closed Wages: Shows the total EHT wages from Employer Health Tax Exemptions and Wages.
  • Current Payment Schedule Wages: Shows the current EHT wages for the selected payment schedule.
  • Cycle Other Open Wages: Shows the other EHT wages from other Cycle open Payment Schedules

    If the record type is Off Cycle, this field shows the other EHT wages from all Cycle open Payment Schedules.

  • Off Cycle Other Open Wages: Shows the other EHT wages from all Off Cycle Payment Schedules.

    If the record type is Off Cycle, this field shows the EHT wages from other Off Cycle Payment Schedules.

  • Health Tax Record Type: Shows Cycle and Off Cycle record types.

    If the record type is Off Cycle, this field shows Off Cycle only.

For Off Cycle records, the Current Employer Health Tax Wages are updated with manual payments, voids, and adjustments.

The wages from other Cycle and Off Cycle open payments are included in the EHT YTD Remuneration that is passed to TaxFactory Canada.

Calculating payments

You must complete the Calculate Payments action for all payment schedules that share a common EHT legal entity, legal establishment, or EHT number before you run the Print Payments action.

When you use the same EHT number across records, Calculate Payments adds the EHT wages so that the tax is calculated across legal entities and legal establishments.

Note: The EHT threshold is based on tax structure, such as legal entity or legal establishment, and not based on the payment schedule.

After the Calculate Payments action is complete a green alert appears for the payment schedule with a hover message that says that EHT exemption threshold is met. This message is also generated on the Payment Calculation Errors tab for the employee who crossed the EHT threshold.

If you rerun the Calculate Payments action for any payment schedule, the EHT calculation threshold employee may change. This change can affect whether the system takes or does not take deductions for employees in the printed payment schedule.

Note: A payment schedule structure is an implementation consideration because an EHT threshold can apply across multiple payment schedules. If EHT deductions exist for multiple provinces, you must create payment schedules by province. You must follow this process because EHT alerts that appear when the exemption threshold is crossed are not specific to a province.

When multiple payment schedules include employees who use the same EHT deduction code and the same EHT number, the second processed payment schedule uses cycle amounts from the previously processed payment schedule and includes the amounts in the YTD remuneration passed to BSI.

Excess Wages represent the wages accumulated to reach the exemption threshold. Once the threshold is met, Regulatory Taxable Wages are tracked.

Viewing triage logs

If you select the Enable Tax Vendor Display Log, the data for Payroll Cycle or Payroll Off Cycle record is displayed in the triage log.

For each employee EHT deduction with the Tax Type of 20, legal entity, legal establishment, or year, the Calculate Payments action finds the matching CurrentEmployerHealthTax.HealthTaxRecordType = Cycle (0) and EmployerHealthTaxExemptionAndWage records and passes this information to TaxFactory Canada:

  • GrossAnnualPayroll: The employer's total estimated annual payroll. The <grossAnnualPayroll> is used by some provinces to determine the EHT rate used to calculate for the current year's deduction. The EmployerHealthTaxExemptionAndWage.YearToDateCombined for the prior year is based on Calculate Payments' Payment Date year.
  • AllocationExemptionIndicator: The EmployerHealthTaxExemptionAndWage.ExemptionIndicator for the current year.
  • AllocationAmount: The EmployerHealthTaxExemptionWage.ExemptionAmount for the current year.
  • YtdRemuneration: The total of these values:
    • CurrentEmployerHealthTax.EmployerHealthTaxExemptionWageTotal for Closed Wages
    • CurrentEmployerHealthTax.Wages for Current Payment Schedule Wages
      Note: This wage amount increments for each employee that Calculate Payments processes, the next employee gets the previous employee's wages in YTDRemuneration.
    • CurrentEmployerHealthTax.OpenWages for Cycle Other Open Wages from other Payment Schedules with the same EHT deduction, legal entity, legal establishment, or year
    • CurrentEmployerHealthTax.OffCycleOpenWages for Off Cycle Other Open Wages

    When you use the same EHT number across legal entities and legal establishments, the EHT wage base is shared and YTD Remuneration is updated during the processing of each subsequent employee aligned with the EHT number.

Calculate Payments logic determines Excess Wages equal to Total Wages less Taxable Wages.

Closing payroll records

The Close Payroll action updates the deduction code information on the Employer Health Tax Exemptions And Wages tab.

Green and yellow alerts are generated when an EHT threshold is met or when an action is taken on another payment schedule or on an employee, such as the Unlock Payroll or Unlock Employee actions. These alerts indicate that the EHT calculation for employees in other payment schedules that share the same deduction code, legal entity, legal establishment, or year may change.

If there is a yellow alert, you must review the EHT threshold and taxable wages. To recalculate EHT wages and clear this alert, you must reprocess the cycle.

Note: You can use History Load to update Employer Health Tax Exemptions and Wages for imported payments.