When you set up your TFSA or RRSP contributions and deductions, make sure you have the information required to address the following questions:
- What type of deductions (e.g., RRSP, TFSA) are you processing for members?
- Will there be employer contributions, and for which plans? (e.g., TFSA, RRSP)?
- Are employer RRSP contributions restricted? (Employees cannot withdraw employer contributions until they retire or cease to be employed, but the the RRSP agreement may allow the employee to withdraw funds as part of the Home Buyers' Plan (HBP) or the Lifelong Learning Plan (LLP))
- If employer contributions to a RRSP are restricted, do not apply EI payroll deductions
- Are the employer’s plan contributions a taxable benefit?
- Employer contributions for RRSP or TFSA are a taxable benefit – set them up as a taxable benefit to ensure proper reporting on the members T4
- How will you be deducting the amounts - as a percentage (%) or a dollar ($) amount from each pay?
- Is there a maximum employer matching amount? (For example, up to 4% to a maximum of $3,000/year)
- How frequently will you be making RRSP and TFSA employee deductions and employer contributions? (For example, with each payroll cycle)
- What earnings are to be included in the calculation to determine contributions and deductions? (For example, base earnings plus overtime, or base earning plus commissions)