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Resolve prior payroll paid as a lump sum in QuickBooks Online Payroll

by Intuit Updated 5 months ago

If you've paid T4 employees without withholding taxes, you will need to calculate what these taxes should be prior to using QuickBooks Online Payroll.

We recommend performing a Net-to-Gross or Gross-Up calculation on the amount you've already paid your employees. The result won't affect your employees’ pay, but will tell you the amount that you need to reconcile with the Canada Revenue Agency or your provincial agency.

You can work with an accounting professional or use an online calculator to help. Here’s how to use an online payroll calculator:

  1. Go to Payment Evolution Payroll Calculator.
  2. Fill in all fields to match your employee’s information, including the Advanced Options.
  3. Toggle Pay Rate to Net.
  4. Select Submit.

Sometimes the precise calculation of taxes doesn't exactly match the net you provide. If this is the case, adjust the gross pay up or down by a few cents to fix the discrepancy.

Note: The calculator linked above assumes calculations for a single pay cheque, which affects how much CPP is taken out. For best results, use this calculator on each pay cheque individually.

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