How to Configure Canadian Payroll Year-End Mapping

  • by Srikant Nayak, Senior HCM Consultant
  • March 31, 2015
Learn the year-end process for Canadian SAP payroll systems, and what year-end forms are required. This step-by-step process shows how to configure the year-end mapping process and how to test the configuration.
Learning Objectives

Reading this article, you will learn:

  • About the required year-end forms for Canadian payroll
  • How to configure year-end mapping for Canadian payroll
  • How to test the configuration to ensure that it’s correct
Key Concept

The year-end process in SAP payroll is necessary because the system needs to have a required configuration for running payroll and creating payroll forms for the coming year in place. SAP recommends that new HR Support packages and up-to-date SAP Notes be installed at the beginning of each year, thus creating the ability to move on to the next configuration steps for the process of year-end mapping.

One of the most important SAP payroll activities for Canadian payroll is year-end mapping. Year-end mapping is a process in which the wage types are mapped to the year-end form wage type buckets (e.g., a set of wage types cumulated for year-end reporting purposes) or cumulation wage types. I discuss the relevant Canadian payroll year-end forms, and how to configure and complete this activity successfully.

Note
This article is geared toward Canadian SAP ERP HCM users who have some familiarity with the SAP payroll system, but still have some configuration questions.

First, here is a brief description of four Canadian payroll year-end forms and their usage:

  1. Form T4: This is a form that Canadian employers are required to provide to employees; it summarizes the total earnings and deductions for taxation for the year for the employee. This form is for all Canadian employees except those who live in Quebec.
  2. Form T4A: This is the form for pensioners. Also called a statement of pension or retirement, it lists any earned income paid by the employer and the amount of tax deducted. This form is for all Canadian employees except those who live in Quebec.
  3. Form Releve 1 (RL-1): Form RL1 is similar to Form T4, but it is only for employees who are Quebec residents.
  4. Form Releve 2 (RL-2): Form RL-2 is similar to Form T4A, but it is only for employees who are Quebec residents.

Year-end mapping is a task that needs to be completed each year before the start of the new year and before the configuration is created for the next year. The tax year for Canadian payroll runs from January to December. As a result, the year-end mapping for 2014 has to be completed before the end of 2014, and before the year-end forms (such as T4, T4A, RL1 and RL2) are generated for 2014. Very often SAP releases new wage types for the coming year; therefore, the old wage types of the previous year need to be updated for the coming year’s forms’ buckets.  

For the year 2014, SAP released the following new technical wage types for Canadian payroll:

/130 – CPP Actual Earnings

/131 – QPP Actual Earnings

/132 – EI Actual Earnings

Before going into detail about the configuration steps, I want to review the concept of the wage type application. This is something readers need to be familiar with when completing the configuration steps (discussed later in this article).

Srikant Nayak

Srikant Nayak is an SAP-certified senior HCM consultant with 20 years of IT-industry experience and nine years of SAP experience. In addition to Payroll, Srikant has experience in Organizational Management, Time Management, and Personnel Administration. He has also been a part of multiple end-to-end Payroll implementations, including roll-out, up-gradation, and support. Srikant works for a large management and systems integration consulting firm and handles global payroll for clients.

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