In Payroll Setup > Earnings and Deductions, you can identify taxable benefit earnings as Fondaction or FTQ contributions. When you select an earning in the Earnings tab that is a taxable benefit, the General tab displays the LSF Type drop-down list, which is cleared by default. The available options are Fondaction and FTQ.
The LSF Type drop-down list is always displayed in the Details tab of any earning that has Taxable Benefit selected from the Earning Type drop-down list in the Tax and Compliance sub-tab of Payroll Setup > Earnings and Deductions > Earnings.
When you select an option from the LSF Type drop-down list, the application always tracks taxable wages for this earning against the LSF G-1 tax authority.
Important: Do not define the LSF Type drop-down list for non-LSF taxable benefits that are QPP pensionable, because doing so will cause the wage to be tracked against both the LSF G-1 and QPP G-1 tax authorities, which will cause the amount in RL-1 form box G-1 to be doubled. A taxable benefit that is QPP pensionable will have the QPP checkbox selected in the Canada tab of Payroll Setup > Earnings and Deductions > Earnings > Tax and Compliance.
The LSF G-1 tax authority is assigned to tax definitions of employees with a work assignment in the province of Quebec. You can review this tax authority in People by loading a Quebec employee's record and going to Payroll > Tax Definitions, and then scrolling to the Employee Payroll Tax section. This tax authority is also displayed in Org Setup > Org Payroll Setup > Legal Entity when you select the employee’s legal entity and then click the Tax Authorities tab.
The LSF G-1 tax authority is only used for recording taxable wages and always generates a zero tax amount. Moreover, it is always hidden from employee earning statements.
The Payroll Register Report will show LSF G-1 tax authority in italics with an asterisk beside the name, as it does with other taxes that don’t impact an employee’s pay. The footnote at the bottom of the tax section states, "italicized amounts are not factored into net and impound totals":
As an example of this functionality, say that in the earning definitions of a taxable benefit earning, you select Fondaction in the LSF Type drop-down list. Now say that you create a quick entry for a $100 taxable benefit for this earning. Regardless of other amounts on the same payment, the wages of the $100 LSF taxable benefit are tracked against the LSF G-1 tax authority, so that they will be recorded in RL-1 form box G-1.
In the Preview tab of the Employee Preview slide-out panel in Payroll, $100 is displayed in the Limited Taxable Wages column of the LSF G-1 tax authority: