Retiring Allowance (severance Pay) QBO Payroll Canada

Hi there, 

Thanks for reaching out to us in the Community! When it comes to managing your books, QuickBooks is the go-to program that enables you to manage your work with peace of mind. I'll be happy to share more info so you're on the right track with your work. 

In order to accurately record your transactions, I highly recommend consulting an accounting professional for expert advice. This ensures your books remain accurate while you continue to manage your work with peace of mind. You can also get in touch with a professional using this link here. Other accounting professionals are able to see this post in the Community and this will allow them to chime in. Otherwise, here's a helpful article that provides more info on: How to prepare T4 slips and summary. 

Let me know if this info helps. Otherwise, you're more than welcome to ask other questions in the comments below.

That was a useless reply.

An earnings code that is Federal Tax 'taxable' and EI/CPP 'exempt' is needed. None is available.

This is a major flaw. Please address it and create such an earnings type.

In efforts to find a useable solution rather than that as suggested by 'QuickBooks Team', here's what was done as a workaround.

Under the respective employee's Tax Withholdings, CPP and EI were flagged as exempt. This allowed the opportunity to issue the Retirement Allowance payment as CPP/EI exempt and Federal Income Tax taxable.

Next, it will be necessary to generate  manual T4(s) as the QB generated T4s will be incorrect. The retiring allowance (lump-sum payment) will need to be reported in Box 66 of the T4s in order for CRA can determine that a portion of the Box 14 earnings are CPP/EI exempt.

This information is super helpful because I got nothing but pushback from QBO on this! My only follow up is how did you enter the actual payment amount? As regular wages or something else???