Set up and edit Workers' Compensation

Although each province is slightly different when it comes to names and rates, the QuickBooks Desktop Payroll set up remains the same. Use the steps below to create and assign a workers’ compensation payroll item in your QuickBooks Desktop company file.

In this article, you'll learn about:

• What you might need to know
• Create a workers' compensation payroll item
• Add the new workers' compensation payroll item to existing employees
• Set workers' compensation as a default payroll item for future/new employees
• Pay the workers' compensation payroll liability

What you might need to know

• Each province and territory in Canada has its own exclusive Workers’ Compensation Board/Commission (WCB). Note: Northwest Territories and Nunavut have a combined Workers’ Compensation Board.
• To get specific requirements for each province, refer to your provincial government or The Association of Workers' Compensation Boards of Canada (AWCBC). The AWCBC is a national resource on information about workers' compensation.

Create a workers' compensation payroll item

1. Choose Lists then Payroll Item List.
2. From the Payroll Item ▼ dropdown, select New.
3. From the Payroll Item Type screen, choose Other Tax, then select Next.
4. From the Other Tax screen, select the option Tax is paid by the company, then select Next.
5. From the Name used in pay cheques and payroll reports screen, enter the name for the item, then select Next.
6. From the Agency for company-paid liability screen, in the area titled Enter name of agency to which liability is paid, choose the appropriate supplier.
   • If it isn't created yet, it can be done by selecting Add New from the drop down list.
7. You can leave account choices as the default accounts or choose accounts you have created to track the workers compensation item, then select Next.
8. From the Tax tracking type screen, leave the selection as None, and then select Next.
9. From the Default rate and limit screen, specify the rate (check with your provincial government or the AWCBC if you do not know your rate), then select Next.
   • ​Note that you must specify the "%" sign after the rate. For example if your rate is 2.90%, enter the percent sign after the rate; otherwise, QuickBooks Desktop will interpret the amount as $2.90.
10. From the Taxable Compensation screen, make sure that there's a checkmark next to all the payroll item(s) that you want workers compensation calculated on, then select Finish.

Add the new workers' compensation payroll item to existing employees

1. Choose Employees then Employee Centre.
2. Double-click an employee.
3. From the Payroll Info tab, select Taxes and TD1.
4. From the Taxes screen, select the first row of the column item name, and select the workers' compensation item that you created earlier from the drop-down list.
5. Select OK then OK again to close the employee screen.

Complete this process for each of your existing employees.

Set workers' compensation as a default payroll item for future/new employees

1. Choose Edit, then Preferences.
2. From Payroll & Employees, select the Company Preferences tab.
3. From Employee Defaults, go to Taxes.
4. From the Taxes screen, select the first row of the column item name, and select the worker's compensation item that you created earlier from the drop down list.
5. Select OK then OK again to close the preferences screen.

Note: Any new employee will now have the workers compensation automatically added to their profile.

Pay the workers' compensation payroll liability

After you've paid your employees, you can pay the workers compensation using the same process you already use to pay your other payroll liabilities.