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 then Payroll Item List.
- From the Payroll Item ▼ dropdown, select New.
- From the Payroll Item Type screen, choose Other Tax, then select Next.
- From the Other Tax screen, select the option Tax is paid by the company, then select Next.
- From the Name used in pay cheques and payroll reports screen, enter the name for the item, then select 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 isn't created yet, it can be done by selecting 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 select Next.
- From the Tax tracking type screen, leave the selection as None, and then select 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 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.
- 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
- Choose Employees then Employee Centre.
- Double-click an employee.
- From the Payroll Info tab, select Taxes and TD1.
- 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.
- 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
- Choose Edit then Preferences.
- From Payroll & Employees, select the Company Preferences tab.
- From Employee Defaults, go to Taxes.
- 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.
- 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.