Sage is Not Calculating the Income Tax Deduction

Have you ever encountered a situation where your Sage is not Calculating the Income Tax Deduction? You’re not alone. This is a common issue, and it can be frustrating when you’re trying to get your finances in order.

Having problem with “CPP Amount is Not Calculating in Sage 50” issue? The CPP is not being calculated while creating paycheck or showing that the CPP has reached its maximum. We are here to help you resolve your issue. Read through and eliminate your problem.

Reasons for the Occurrence of the Sage 50 CPP Amount is Not Calculating Issue

Many technical issues may contribute to the occurrence of this issue. Some of these are mentioned below-

• If the CPP amount has already reached its maximum deduction
• If the deduction CPP checkbox is turned on
• If the birth date of the employee is not under the age of 18

Read More : Sage 50 Incorrect Payroll Taxes Calculation Problem

Resolving “CPP Amount is Not Calculating in Sage 50” Issue

There are numerous possible reasons why “CPP Amount Is Not Calculating in Sage 50” issue occurs.  Kindly follow the given steps to detect the cause and resolve them:

Step 1: Verify QPP/CPP is Marked Checked to Calculate

• Click on Setup > Settings and then select Payroll > Incomes
• Insert check mark in the Calc QPP /CPP for Income

Step 2: Verify the Payroll ID is Active

• Go to Help and open to About Sage 50.
• Click on Support Info.
• Next, verify the Payroll ID is set Active.

Step 3: Verify Employee’s Age

• Open the employee records for the particular employee 
• Click on Personal
• Verify if the Birth Date is correct.

The following exemptions need to be followed, based on the actual employee age:

• A minor does not pay CPP till the month after his18th birthday
• Once an employee turns 70, the CPP will not calculate a paycheck dated in the following month and thereafter
• In Quebec, the QPP will continue to calculate, even after an employee turns 70,
• Click on the Employees icon
• Double-click on the name of an Employee to view his record.
• Click on Personal
• Check whether the Birth Date for this employee is correct.

Step 4: Verify Pay Periods are Accurate

• Go to the Income section
• Click on the relevant employee record
• Check if the number for Periods Per Year is correct
• Please note that CPP will only calculate when the total amount of ‘This Period’ is more than a ‘specific amount’

For example, the ‘specific amount’ for 2016 will be calculated as 3500 ÷ the number of pay periods. If there are 26 pay periods, the specific amount is = 3500 ÷ 26 pay periods = $134.62. Hence, the gross pay amount must be more than $134.62 to calculate CPP. Else, no CPP will be calculated..

Step 5: Enable PayCheque

• Create a newer Pay-cheque, and make sure the Calculate Taxes automatically tab on the Pay-cheque window is enabled.
• Verify the CPP is now being calculated correctly.

Note: You will be unable to enable this preference if:

• Your company file is in history mode.
• You have not subscribed to the Sage Business Care Gold service.
• If you have set your session date onto the next calendar year.
• The CPP has reached its maximum.
• If there are changes made on the Setup and Settings. There is a possibility the check mark on Calc CPP/QPP has been removed. If this is the case, you need to replace this check mark in the column for every income used.

Also Read : Sage 50 Payroll Tax Calculations Could not be Found

Final Words

In conclusion, if Sage is not calculating the income tax deduction correctly, then it is important for a business to take steps to rectify the problem as soon as possible. By using the tips mentioned in this article, businesses can help ensure that their financial data remains accurate and that they are able to maximize their deductions. Furthermore, understanding how taxes work on both a federal and state level will help businesses protect themselves from unnecessary fines or penalties associated with incorrect filing of taxes.

Frequently Asked Questions (FAQs)