Year-end closing procedures for the Canadian Payroll module in Microsoft Dynamics GP

Applies to: Dynamics GP 2016Microsoft Dynamics GP 2015Dynamics GP 2018

2018 payroll year-end update and 2019 payroll tax update

This article discusses the payroll year-end update and the payroll tax update. When the payroll year-end update for the year 2018 and the payroll tax update for the year 2019 are released, you may download the file from Partnersource or Customersource. (See the links that are listed in the 'Install the 2018 Canadian year-end update' section.) Until the payroll year-end update and the payroll tax update are released, use this article for information and for preparation purposes only.

Note Before you follow the instructions in this article, make sure that you have a complete backup copy of the database that you can restore if a problem occurs.

Summary


This document outlines the recommended year-end closing procedures for the Microsoft Dynamics GP integrated Canadian Payroll module. The "More Information" section contains the following:
  • A detailed checklist of the steps that you must follow to complete the year-end closing procedures
  • Detailed information for each step in the checklist

INTRODUCTION


Read this whole article before you perform any one of the steps. If you have any questions, contact Microsoft Dynamics Technical Support. More information about the Canadian Payroll module is typically included in the year-end update documentation.

More Information


~Payroll year-end checklist~

  1. Complete all the pay runs for the current year.
  2. Complete any necessary 2018 payroll reports.
  3. Make a backup of the data.
  4. Install the 2018 Canadian Payroll Year-End Update.
  5. Complete the "Year End File Reset" process.
  6. Make a backup of the data.
  7. Create the T4, T4A, and RL-1 statements, and print the T4, T4A, and RL1 reports.
  8. Edit the T4, T4A, and RL-1 records as necessary.
  9. Create T4, T4A, and RL-1 Summary records.
  10. Print the T4, T4A, RL-1 reports and create T4, T4A and RL-1 XML files, if appropriate.
  11. Verify that pay periods for 2019 are set correctly.

 


Payroll year-end details

Note There will not be a 2018 Year-End Update available for Microsoft Dynamics GP 2013 and prior versions.  


1. Complete all the pay runs for the current year.

Note Any batch that has a value of 2019 in the Cheque Date field should be processed after you perform the year-end reset. If the cheque date of your final pay period for 2018 is in the year 2019, the 2019 tax tables must be used per the statement in the Canada Customs and Revenue Agency document T4001. To download a copy of this document, visit the following Web site:For example, a weekly payroll at the end of December that has a cutoff date of January 1, 2019, is processed by using the 2019 tax calculations. This payroll will be included in the 2019 history.


2. Complete any necessary 2018 payroll reports.


3.  Make a backup of the data.

Create a backup, and then put this backup into safe, permanent storage. By creating a backup, you make sure that you have a permanent record of the company's financial position at the end of the year. You can restore the backup to quickly recover data if a power fluctuation or other problem occurs during the year-end closing procedure. To create a back up from Microsoft Dynamics GP, follow these steps:
  1. In Microsoft Dynamics GP, click Maintenance on the Microsoft Dynamics GP menu, and then click Backup
  2. In the Company Name list, click the company name.
  3. Change the path of the backup file if this action is required, and then click OK.

    Note We recommend that you name this backup "2018 Pre Year-End Tax Update" to differentiate it from your other backups.


4. Install the 2018 Canadian Year-End Update.

Install the update from one of the following locations, depending on the version you need: 

5. Complete the "Year End File Reset" process.

To perform a year-end file reset, follow these steps:
  1. Have all users close all Canadian Payroll windows. Users can continue to work in other Microsoft Dynamics GP modules.
  2. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll - Canada, and then click Year End File Reset.
  3. In the Payroll Reset Files window, click Copy Files to History. This step creates the required data to view inquiries from the previous year in Canadian Payroll. To access the inquiries from the previous year in Canadian Payroll, point to Payroll Canada on the Inquiry menu, and then click Employee Last Year Information.

    Note In this step, you receive a message that warns you to check available disk space. You must have at least two times as much available disk space as the amount that is currently occupied by all the files that are in the Data/Project directory.
  4. Click Tax Credit Indexation Factors.
  5. In the Tax Credit Indexation Factors window, verify the basic personal factor (Cost of Living Factor) from the Canada Customs and Revenue Agency document T4127. Verify the numbers, and then click
    OK.

    Notes
    • When the employee masters are reset, the TD1 Basic Personal amounts will be adjusted by the multiplier that you enter.
    • These TD1 Basic Personal amounts should be automatically updated after you install the Canadian Payroll Year-End Update file.
  6. Click Reset Employee Master.

    Note You must run this process before you process any pay runs for the new year.
  7. Click Yes or No when you are prompted to reset the Employee User Numeric fields, depending on your preference.
  8. On the Cards menu, point to
    Payroll-Canada, and then click Employee to view the Employee User Numeric fields.
  9. In the Employee ID field, type an employee ID, click Miscellaneous, and then click User Data.

Note: If any errors during the Year-End Reset process, be sure to restore to a backup!

 

6. Make another backup of the data.

Create a backup, and then put this backup into safe, permanent storage. By creating a backup, you make sure that you have a permanent record of the company's financial position at the end of the year. You can restore the backup to quickly recover data if a power fluctuation or other problem occurs during the year-end closing procedure. To create a back up, follow these steps:
  1. In Microsoft Dynamics GP, click Maintenance on the Microsoft Dynamics GP menu, and then click Backup.
  2. In the Company Name list, click your company name.
  3. Change the path of the backup file if this action is required, and then click OK.

    Note We recommend that you name this backup "2018 Post Year-End Tax Update" to differentiate it from your other backups.


7. Create the T4, T4A, and RL-1 statements, and print the T4, T4A, and RL-1 reports.

Note This step can be performed any time after you complete the previous step, "Perform a year-end file reset." For example, you may complete pay runs for the new year before you create and print any reports.

• Create and print the T4 reports and the RL-1 reports

To do this, follow these steps:
  1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll - Canada, and then click T4 and R1 Creation.
  2. Click Create T4's
  3. Click Create R1's.
  4. To print the T4 Verification Report, click Print T4 Report.
  5. To print the R1 Verification Report, click
    Print R1 Report.
  6. Click OK to exit.
  7. Print the T4 Edit List. To do this, point to Payroll-Canada on the Reports menu, click
    Routines, click Routines Reports, and then click T4 Edit Report.


• Create and print the T4A reports
To do this, follow these steps:

  1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll - Canada, point to T4A Routines, and then click T4A Setup.
  2. Click Create T4A's.
  3. Click Print T4A Report to print the T4A Verification Report.


8.  Edit the T4, T4A, and RL-1 records as necessary.

• Modify the T4 statements
To do this, in Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll - Canada, and then click T4 Edit.

• Modify the T4A statements
To do this, in Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll - Canada, point to T4A Routines, and then click T4A Record Edit.

• Modify the R1 amounts based on the edit list in the R1 Edit window
To do this, in Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll - Canada, and then click R1 Edit.



9. Create T4, T4A, and RL-1 Summary records:

• Create the summary information for the T4 reports and for the RL-1 reports


To do this, follow these steps:
  1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll - Canada, and then click T4 and R1 Summary
  2. Click Create T4 Summary Records.
  3. Click Create R1 Summary Records.
• Create the summary information for the T4A reports

To do this, follow these steps:
  1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll - Canada, point to T4A Routines, and then click T4A Summary.
  2. Click Create T4A Summary Records.


10. Print the T4, T4A, RL-1 reports and create T4, T4A and RL-1 XML files, if appropriate.

• Print the final T4 reports
To do this, follow these steps:
  1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll - Canada, and then click T4 and R1 Print.
  2. In the Employer Number field, select the appropriate employer number.
  3. Click T4 Slip Type to select the appropriate form.
  4. To print the T4 Statements, click T4 Slips. Follow the prompts and select if you want to test the form alignment by printing a test record.
  5. Click T4 Summary and T4 Segment.

    Note These reports are not designed to print on to a pre-printed form.
  6. To generate the electronic T4 file, click
    Electronic T4’s. Complete the Payroll Electronic Transfer T4 window and then click either Verify Only or Verify and Generate.
     
• Print the RL-1 reports
To do this, follow these steps:
  1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll - Canada, and then click T4 and R1 Print.
  2. In the Employer Number field, select the appropriate employer number.
  3. Click R1 Slip Type choose Laser.
  4. To print the R1 statements, click R1 Slips.
  5. To print the R1 Summary report, click R1 Summary.

    Note This report is not designed to print on to a pre-printed form.
  6. To generate the electronic RL-1 file, click
    Electronic R1's. Complete the Payroll Electronic Transfer R1 window and enter the required fields including the Software Developer Authorization Number. Then click either Verify Only or Verify and Generate
     

• Print the T4A reports

To do this, follow these steps:
  1. In Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Routines, point to Payroll - Canada, point to T4A Routines, and then click T4A Print.
  2. In the Employer Number field, select the appropriate employer number.
  3. Click T4A Slip Type to choose either
    Laser Employee or Laser CCRA.
  4. In Microsoft Dynamics GP 2015 and higher versions, enter the RL-1 Auth Number. (Refer to Q1 in the More Information section below for more information about this field.)
  5. To print the T4A statements, click T4A Slips.
  6. To print the reports, click T4A Segment and T4A Summary.
  7. To generate the electronic T4A’s, click Electronic T4A’s. Complete the Payroll Electronic Transfer T4A window and then click either Verify Only or Verify and Generate.


11. Verify that the pay periods are set correctly for 2019

To verify that the pay periods are set correctly for 2019, in Microsoft Dynamics GP, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Payroll - Canada, point to Control, and then clickFrequency.



 

MORE INFORMATION:

Q1: Are there any new features/changes that I should be aware of for Year-End?

A1:  Refer to the Year-End BLOG article for the most up to date information.

 

Q2: When should I install the Year-End Update?

A2:  Basically, you should finish all your payruns for the current year, and install the Year-End Update (and complete through the Year-End File Reset or step 5 in the checklist above so Basic Personal Amounts are updated) before you do any payruns for the next new year.  The Year-End update will include the new tax code needed for the payruns in the next new year.  Follow the steps noted in the checklist above.

 

Q3: What should I do if the Year-End Reset was done AFTER a payrun was made in the new year?

A3:  You will need to restore to a backup from BEFORE the Year-End Reset was done.  Void the payrun for the new year.  Then do the Year-End Reset (to move all the current year data to history, and Reset Master to index all the Employee's Basic Personal Amounts).  Then you can redo the payrun for the new year, now that the updated tax amounts are in place for each employee.  (Keep in mind that the new payrun may produce different amounts, as they may have maxed out on some amounts using last year's amounts, and taxes may have changed for the new year.)

Q4: Why do I have to key in the RL-1 Auth Number?

A4: In order to make year-end more seamless, the RL-1 Auth Number field was added as an editable field to the Payroll T4/R1 Print- Canada window in Microsoft Dynamics GP 2013 build 12.00.1488 and included in R2 (and later versions). The user will now be required to key in the RL-1 Slip number in this field. This authorization number is used by Revenue Quebec to identify that the forms came from Microsoft Dynamics GP. (This authorization number will be stored in a SQL table [CPY20100], per year, so it is available for reprints.) If the user updates the RL-1 Auth number field, the Last Updated Date will be changed to be the current System Date. The RL-1 Report (P_CPY_SETP_R1_Laser) was also changed to read this new authorization number field. You can find the RL-1 Slip number in the CAN17YETAX.pdf  document that can be downloaded from the Year-End Update page (see links at top).


Q5: Why do the taxes calculated in Dynamics GP differ from the CRA online calculator? How are Income Taxes calculated in Canadian Payroll?

A5: Tax rates are included in the GP code and not stored in SQL tables for Canadian Payroll.  Microsoft Dynamics GP uses an Averaging Convention formula to calculate taxes, which are within the acceptable tax ranges published by the CRA. Refer to KB 2773319 for more information on how taxes are calculated.