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.
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
- Choose Lists > Payroll Item List.
- From the Payroll Item drop-down, select New.
- From the Payroll Item Type screen, choose Other Tax, then click Next.
- From the Other Tax screen, select the option Tax is paid by the company, then click Next.
- From the Name used in pay cheques and payroll reports screen, enter the name for the item, then click Next.
- 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 is not already created it can be done by clicking Add New from the drop down list
- You can leave account choices as the default accounts or choose accounts you have created to track the workers compensation item, then click Next.
- From the Tax tracking type screen, leave the selection as None, and then click Next.
- 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 click Next.
- Please 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.
- From the Taxable Compensation screen, make sure that there is a check mark next to all the payroll item(s) that you want workers compensation calculated on, then click Finish.
Add the new workers' compensation payroll item to existing employees
- Choose Employees > Employee Centre.
- Double-click an employee.
- From the Payroll Info tab, click Taxes and TD1.
- From the Taxes screen, click the first row of the column item name, and select the workers' compensation item that you created earlier from the drop-down list.
- Click OK > OK to close the employee screen.
Set workers' compensation as a default payroll item for future/new employees
- Choose Edit > Preferences.
- On the Payroll & Employees tab, click the Company Preferences tab.
- Click Employee Defaults > Taxes.
- From the Taxes screen, click the first row of the column item name, and select the workers' compensation item that you created earlier from the drop down list.
- Click OK > OK again to close the preferences screen.
Pay the workers' compensation payroll liability
After you have paid your employees, you can pay the workers compensation using the same process you already use to pay your other payroll liabilities.