You can configure payroll earnings and deduction definition groupings for benefit premiums that are subject to sales tax. If you have employer-paid, employee-paid, and taxable benefits you must create three groupings; two earning groupings and one deduction grouping.
In the Earning Groupings tab of Payroll Setup > Groupings, configure the employer-paid grouping to include the following employer-paid benefits:
- Health
- Dental
- Vision
- EAP
In the Earning Groupings tab of Payroll Setup > Groupings, configure the taxable benefit grouping to include the following employer-paid benefits:
- Accidental Death and Dismemberment (AD&D)
- Life
- Critical Illness
- Long-Term Disability (LTD)
- Short-Term Disability (STD)
- Dependent Life
In the Deduction Groupings tab of Payroll Setup > Groupings, configure the employee paid deduction grouping to include all benefits that are paid for by the employee.
If you operate in the Province of Quebec, an additional earning grouping is required as employer dental and health premiums are considered taxable benefits but aren't considered taxable benefits in Manitoba and Ontario.
Configure the applicable earning and deduction definitions attaching the payroll groupings and using the Type as System and Type Value as Insurance Tax Rate to create an expression for the sales tax calculation. If you have employer-paid, employee-paid, and taxable benefits, you must create two earning definitions and one deduction definition.
Note: The Insurance Tax Rate type value returns the RST tax rate for the province of the employee's primary work assignment.
If you operate in the Province of Quebec, an additional earning definition is required as employer dental and health premiums are taxable benefits in Quebec but aren't subject to sales tax in Manitoba and Ontario.
Finally, import or manually update the employees who are enrolled in Benefits with the applicable earning and deduction definitions.
Note: The RST earnings and deduction definitions show as individual items in the employee's pay statement and is available for reporting.