When an employee is assigned the ZZ - Canadian Beyond Provinces or US - Canadian Beyond Province tax status, and you pay them an earning that uses the Lump Sum income tax calculation method, Dayforce doesn't calculate the taxes as expected. In this case, Dayforce uses the standard federal tax authority to calculate taxes on the earning instead of the 10180000 15 Fed Tax tax authority for beyond-province taxation.
Earnings configured with the lump sum income tax calculation method are used for payments such as retiring allowance or severance pay. To set up the lump sum income tax calculation method in a Canadian earning, in Payroll Setup > Earnings and Deductions, in the Tax and Compliance tab of the earning, select Lump Sum in the Income Tax Calculation Method drop-down list.
When payroll is calculated for an employee with an earning that uses the Lump Sum income tax calculation method, and who is assigned a beyond-provinces tax status, the following warning message is shown: “Beyond Provinces(ZZ) Employees should not be paid using an Earning Code using Lump Sum Income Tax Calculation Method, taxes will not be as expected.”
When an employee is assigned a beyond-provinces tax status and you need to pay them an earning that has the Lump Sum income tax calculation method, the best practice is to add an end date to the Beyond Provinces tax status in the Payroll > Tax Definitions screen of the employee's HR record. This way, the employee is taxed based on the province of the work assignment to which the earning is associated.