Issue:
I Have a reduced EI Rate that I have to issue the savings back to the employees and want to do it on a per-pay-period basis. How do I setup the system.
Solution:
Repaying the employees reduced EI Premium benefit
1) Create a benefit category of type formula
2) Add all payroll categories to the formula that are subjec to Employment Insurance
3) Set the formula to be 0.41001 % if your reduced EI Premium is 1.169**
** see "How to calculate the % value for reduced EI Premiums" Below
4) On the "Advanced" tab, turn on the "Maximum per year" flag
5) Set the value to $177.12 based on employee amount **
** see "How to calculate Maximum below"
6) Assign the category to each employee that is subject to the reduced EI Rate.
7) Create an earning category of type formula
8) Add the benefit category created above to the formula
9) Set the formula to be 41.6666 % (IE: 5/12 of the savings)
10) Assign the category to each employee that has the benefit category on their profile.
Optional-Employeer Savings category
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11) Create a benefit category of type formula
12) Add the benefit category created above to the formula
13) Set the formula to be 58.3333 % (IE: 7/12 of the savings)
14) Assign the category to each employee that has the benefit category on their profile.
** "How to calculate the % value for reduced EI Premiums"
For the employee portion of the benefit the % multiplier is calculated as follows
NB: All displayed values are for 2010, for different years check with CRA
(Employee EI Rate [1.73] * Regular EI Rate [1.4]) - (Employee EI Rate [1.73] * Reduced EI Rate [1.163])
= (1.73 * 1.4) - (1.73 * 1.163)
= (2.422) - (2.01199)
= 0.41001
** "How to calculate Maximum below"
For the maximum amount for the Reduced EI Savings you calculate it as follows
NB: All displayed values are for 2010, for different years check with CRA
((Max EI Gross [43200] * Employee EI Rate [1.73] * Regular EI Rate [1.4]) - (Max EI Gross [43200] * Employee EI Rate[1.73] * Reduced EI Rate [1.163])) * 0.01
= ((43200 * 1.73 * 1.4) - (43200 * 1.73 * 1.163)) * 0.01
= (104630.4 - 86917.968) * 0.01
= 17712.432 * 0.01
= 177.12