Gross to net Payroll Engine Canada

G2N Nova is the most advanced Gross to Net Engine Canada, delivering real-time, 100% accurate payroll calculations. Designed for businesses operating in Canada and beyond, it ensures seamless compliance across 100+ countries—all within a single, powerful platform.

What makes G2N Nova stand out? It processes payroll without storing or accessing any employee-identifiable data, keeping sensitive information secure within your systems. This next-generation solution simplifies compliance while offering unmatched accuracy and efficiency.

Streamline your payroll with G2N Nova, the trusted Gross to Net Engine Canada. Request a demo today!

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Gross to net payroll tax engine for Canada

Keeping up with the latest payroll tax updates in Canada? G2N’s Payroll Tax Engine Canada ensures your payroll stays accurate and compliant with real-time, continuous updates tailored for Canadian regulations. Our cloud-based platform seamlessly integrates with your existing payroll systems, delivering automated tax calculations without disruption.

• Maintain your existing HCM/ERP/WFM software without switching to an external payroll solution.
• Find a partner offering a plug-and-play solution exclusively for payroll tax updates.

Simplify compliance and streamline payroll tax processing with G2N’s Payroll Tax Engine Canada. Request a demo today!

Solutions

• HCM, ERP, and Workforce Management Systems: G2N integrates effortlessly with all major HCM, ERP, time, payroll, and attendance systems, allowing businesses across Canada to continue using their existing infrastructure without disruption.
• System Integrators: Enhance your platform with cross-border payroll functionality powered by G2N’s Tax Engine Canada. Our solution simplifies international payroll management while giving system integrators complete control over the user experience—ensuring tailored, seamless payroll solutions for clients.
• Enterprises: Say goodbye to payroll complexities. G2N’s unified platform, backed by the most advanced Tax Engine Canada, eliminates processing headaches, freeing up valuable time so you can scale your business, enhance your offerings, or finally take that well-earned vacation!
• SMEs: Designed for flexibility and growth, G2N scales effortlessly to support your expanding workforce and compliance needs. Whether managing 1 or 120,000 payroll records, G2N’s Tax Engine Canada delivers real-time, 100% accurate gross-to-net payroll processing, making it the ideal solution for small and medium-sized businesses.
• Payroll Service Providers: Stay focused on what matters most—your clients and your business. G2N’s trusted payroll platform, powered by the leading Tax Engine Canada, is relied upon by Fortune Global 500 companies to ensure seamless, efficient payroll processing across Canada and beyond.

How It Works

Input

• Employee Data: G2N Nova collects key employee details, including compensation, benefits, and personal information, ensuring comprehensive and accurate payroll processing.
• Leave Management: The system tracks employee leave, absences, and time-off requests, ensuring that all records are up-to-date and in compliance with Canadian labor regulations.
• Time & Activity Tracking: Monitors employee work hours, attendance, and overtime to ensure that payroll calculations reflect accurate work activity and time worked.

G2N Nova Process

• Country-Level Filing: Integrates with Canadian statutory authorities, ensuring precise filing and reporting in compliance with Canada’s tax and social security regulations.
• Local Compliance: G2N Nova guarantees full adherence to Canadian payroll rules, with support from a dedicated in-house compliance team that keeps the system aligned with ever-evolving payroll laws.
• Global Payroll Engine – Gross to Net Calculation: This advanced engine accurately calculates gross-to-net payroll for employees in real time, making sure pay and deductions are correct according to Canadian tax laws. It functions as an ideal payroll calculator Canada, delivering accuracy and reliability for every payroll cycle.

Output

• General Ledger (GL): Generates detailed financial entries that support accounting and reconciliation processes.
• Treasury Reporting: Provides comprehensive reports for cash flow and treasury management, giving businesses a clear view of their financial health.
• Bank File Creation: Produces bank files for payroll payments and other financial transactions, simplifying the payment process and ensuring seamless transfers.
• Payslips: Delivers easy-to-understand payslips that clearly show deductions, taxes, and net pay, ensuring transparency for employees.

G2N Nova is a flexible, scalable, and fully compliant solution for processing payroll across Canada. With integration into your existing systems, it offers a real-time, transparent payroll experience that simplifies payroll management for businesses and employees alike. For accurate calculations, businesses can rely on G2N Nova as the best salary calculator Canada and payroll calculator Canada.

Features of G2N Payroll Engine Canada

Benefits

Streamlined Payroll Processing

G2N Payroll Engine Canada simplifies payroll tasks, ensuring quick, accurate, and efficient payroll processing that complies with Canadian regulations, featuring a robust Salary Calculator Canada.

Seamless Inbound and Outbound Integrations

Our platform integrates seamlessly with Canada’s payroll and HR systems, enabling smooth data transfer, enhancing operational efficiency, and minimizing payroll calculation errors.

Eliminate Manual Data Extraction

G2N automates data extraction, saving time and reducing human error by removing manual data entry from payroll processes, including in the Salary Calculator Canada.

Multi-Country Payroll Capabilities

G2N empowers Canadian businesses to manage payroll across multiple countries, offering the flexibility to handle diverse payroll and tax requirements with ease, including local Salary Calculator Canada features.

Everything you need to know about gross-to-net calculation in Canada

In Canada, calculating gross-to-net payroll involves a series of specific steps and key details to ensure proper payroll tax deductions, contributions, and compliance. Below is an in-depth overview of all the critical elements required to perform an accurate gross to net payroll calculation.

Payroll Payment Date

The payroll payment date refers to the actual date when the employee receives their payment. This date may differ from the pay period ending date. The payment date plays a crucial role in determining the payroll deduction formulas, applicable rates, and limits that will apply. It is also used to establish which taxation year the income will be reported in for T4 tax reporting at year-end.

For instance, if an employee works during the monthly pay period ending December 31, 2020, but is paid on January 4, 2021, their payment should be included as part of the employee’s 2021 earnings, not 2020. The payroll deductions, tax formulas, and rates applicable will be those that apply to January 1, 2021, and beyond.

Employee Payroll Information

Province of Employment The province where the employee physically works dictates the provincial tax rates to be used for payroll tax deductions. The Province of Employment should be accurately identified, as each province has distinct tax rates. Here’s a list of provinces and territories in Canada:

• Alberta
• British Columbia
• Manitoba
• New Brunswick
• Newfoundland and Labrador
• Northwest Territories
• Nova Scotia
• Nunavut
• Ontario
• Prince Edward Island
• Quebec
• Saskatchewan
• Yukon
• Non-resident
• Canadian resident outside the province

Pay Periods The frequency with which an employee is paid is defined by the pay period, which indicates how many times the employee receives payment during the year. This affects the calculation of annual earnings and payroll tax deductions. Common pay periods include:

• Daily (240 per year)
• Weekly (52 per year)
• Bi-Weekly (26 per year)
• Semi-Monthly (24 per year)
• Monthly (12 per year)
• Annual (1 per year)

For example, bi-weekly employees will have 26 pay periods in a year, and monthly employees will have 12 pay periods.

CPP/QPP Pensionable Months The number of months during which Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions are required will remain consistent throughout the year. This is important to track for calculating pensionable earnings. Refer to the T4001 Employers Guide for more detailed guidelines.

TD1 Total Claim Code

The TD1 Total Claim Amount is the amount an employee claims on their completed federal TD1 Personal Tax Credits Return form. The personal amount claimed on the TD1 determines the applicable federal tax deduction. Federal claim codes correspond to specific income ranges:

• Claim Code 0: No claim amount
• Claim Code 1: Basic claim ($16,129.00)
• Claim Code 2: Income range ($16,129.01 – $18,907.00)
• Claim Code 3: Income range ($18,907.01 – $21,685.00)
• And so on, up to Claim Code 10.

If the employee’s total income for the year will be less than the Total Claim Amount on line 12 of their TD1, they may be exempt from federal tax deductions.

• Reduction in Annual Income Subject to Tax: If the employee has an approved reduction in income, such as tax credits for special circumstances, this must be documented and used to adjust the employee’s estimated taxable income.
• Requested Additional Tax Deduction: Employees can request an additional tax deduction for each period, which is added to the calculated federal and provincial tax withholdings. This is entered in the appropriate section on the back of the TD1 form.

TD1(P) – Provincial Tax Credits

TD1(P) Total Claim Code refers to the amount claimed on the provincial or territorial TD1(P) Personal Tax Credits Return. The claim code used here will determine how provincial tax deductions are calculated. As with the federal TD1, employees may claim additional tax credits that reduce their provincial or territorial tax liabilities.

Total Income Less than Claim Amount (No Provincial Tax Deducted) If an employee’s total income is below the claim amount on line 12 of their TD1(P), they may not have any provincial tax withheld from their pay.

Exemptions

• CPP/QPP Exempt: Certain employees may be exempt from CPP/QPP contributions. This exemption should be tracked and applied during payroll calculations.
• EI Exempt: Employees may also be exempt from Employment Insurance (EI) deductions.
• QPIP Exempt: In Quebec, certain employees are exempt from contributing to the Quebec Parental Insurance Plan (QPIP).

YTD (Year-to-Date) Payroll Information

YTD CPP/QPP Contributions Track the Year-to-Date (YTD) contributions for both CPP and QPP. These amounts reflect the total CPP/QPP contributions made throughout the current year. The YTD CPP/QPP deductions should be adjusted to reflect any prior contributions made.

YTD EI Insurable Earnings For Employment Insurance (EI), you must keep a record of YTD EI insurable earnings, which are capped at a maximum annual limit. The total EI contributions deducted must be updated throughout the year.

YTD QPIP Contributions (Quebec Only) For employees in Quebec, the total QPIP contributions need to be tracked. YTD QPIP deductions are calculated and updated on a regular basis.

YTD Prescribed Labor-Sponsored Fund Purchases If an employee participates in a labor-sponsored fund, their YTD prescribed fund purchases should be tracked. This amount may be used for calculating eligible tax credits.

Current Period Payroll Amounts

Pay Period Ending (YYYY-MM-DD)

The pay period ending date is the final date of the payroll period for which the employee is being compensated. Although this date is optional, it is displayed for informational purposes on the Calculator Results page. It does not affect the calculation of payroll withholding taxes. The payroll payment date (the date the employee receives their payment) determines which payroll withholding rates, limits, and calculations will apply. Therefore, the payment date is the key factor in applying payroll deductions, rather than the pay period ending date or the dates worked.

Do Not Claim CPP Annual Basic Exemption

The CPP Annual Basic Exemption is a set amount that employees can claim for their Canada Pension Plan (CPP) contributions. If this exemption has already been applied in a regular payroll calculation for the same payroll period, it should not be claimed again in subsequent payments within the same period. This ensures that the exemption is only applied once, preventing any over-deduction or errors in CPP calculations.

Income

• Gross Salary/Wages refers to the total amount of taxable salary or wages that an employee earns before any deductions are made. This amount is used as the basis for calculating all payroll tax withholding amounts. The gross salary entered should match the amount the employee will receive for a single pay period, as determined by the selected pay frequency (e.g., weekly, bi-weekly, or monthly). This figure does not account for any deductions like taxes, CPP, or EI, and represents the pre-tax earnings.
• Paid Vacation refers to the vacation pay that is being paid out in the current pay period. For example, if an employee’s vacation pay is calculated as a percentage of their gross earnings and paid regularly, this amount should be included in this field. However, vacation pay amounts relating to more than one pay period should not be included here, and vacation pay accruals should not be counted either. For lump-sum vacation pay calculations, such as for accrued vacation pay, a Bonus deduction calculator should be used for proper deductions.
• Taxable Cash Benefits include any cash payments provided to employees that are subject to payroll deductions, such as taxable auto allowances, living allowances, and similar payments. This field is optional and will default to $0.00 unless taxable cash benefits exist in the current pay period. Cash benefits are subject to Employment Insurance (EI) contributions and other payroll tax deductions.
• Taxable Non-Cash Benefits refer to non-cash payments or benefits provided to the employee, such as the use of a company car or housing allowances, that are subject to income tax but not to Employment Insurance (EI) contributions. This field is also optional and will default to $0.00 unless taxable non-cash benefits are being provided. Though these benefits are not insurable for EI, they are still considered when calculating the employee’s overall taxable income for other tax purposes.

Each of these fields plays an essential role in ensuring the accurate calculation of an employee’s payroll deductions, providing the necessary details for proper tax withholding and compliance with Canadian payroll regulations.

Deductions

• RPP/RRSP Contribution: The Registered Pension Plan (RPP) or Registered Retirement Savings Plan (RRSP) contribution refers to the amount that is deducted from the employee’s pay for their pension plan or retirement savings plan during the current pay period. The amount entered should reflect the employee’s contribution for the period, but it is an optional field that will default to $0.00 unless specified. The contribution to an RPP or RRSP helps employees save for retirement, with certain tax benefits.
• Alimony/Maintenance Payments: Alimony or Family Maintenance payments are deductions related to any legal obligations the employee has for paying spousal support or child support. If there is an applicable court order or agreement, the specified amount is deducted from the employee’s pay. This field is optional and defaults to $0.00 unless the employee is subject to such deductions.
• Union Dues: Union dues are the regular deductions made from an employee’s pay to support the union they are a member of. These dues go toward union activities, representation, and collective bargaining. The amount deducted depends on the specific union agreement. This field is optional and will default to $0.00 unless the employee is a union member and dues need to be deducted.
• Labour-Sponsored Fund Purchase: Labour-sponsored fund purchases refer to deductions made from an employee’s pay for the purchase of approved shares in labour-sponsored venture capital corporations. These types of funds are designed to encourage investment in Canadian businesses and may provide tax credits to the employee. This field is optional and will default to $0.00 unless the employee is participating in such a program.

Each of these deductions plays an essential role in the accurate processing of an employee’s payroll, ensuring compliance with legal obligations and specific programs related to retirement savings, support payments, and union memberships.

Pension

• Pension Income: The Pension Income refers to the amount of pension income being paid to the employee for the current pay period. This field is mandatory for pension calculations, and the value entered must be greater than $1.00. Leaving this field blank or entering a value less than $1.00 will trigger an application error. This field is important for calculating tax deductions and any applicable pension-related adjustments.
• Gross Salary/Wages: Gross Salary/Wages represents the total amount of salary or wages being paid to the employee before any deductions, which is used as the basis for payroll tax deduction calculations. The value entered should correspond to the salary or wages paid for a single pay period as selected by the user. The salary or wages entered will be used to estimate the employee’s taxable income for the year, helping to calculate the required tax deductions.

Bonus

• Current Bonus Payable: The Current Bonus Payable is the lump-sum bonus or non-periodic payment being made to the employee for the current pay period. This field must be filled with an amount greater than $1.00; if left blank or entered with an amount less than $1.00, the system will generate an error. If this bonus is paid separately from the employee’s regular pay, the gross salary/wages should also be entered to ensure an accurate estimate of annual taxable income and proper tax deductions.
• Total of Bonus Received in the Previous Year: This field refers to any bonuses paid to the employee during the current tax year, prior to the current pay period. This field is optional, and by default, it is set to $0.00. It can be useful for more accurate annual income reporting.

Retroactive Pay

• Total Retroactive Pay Amount: The Total Retroactive Pay Amount is the sum being paid to the employee as a retroactive pay increase. This field is required for retroactive pay calculations, and the amount entered must be greater than $1.00. If left blank or entered incorrectly, it will cause an application error. If the retroactive pay is paid separately from the regular pay, the Gross Salary/Wages should also be entered to properly calculate the tax deductions applicable to this retroactive payment.
• # of Retroactive Pay Periods: This field captures the number of pay periods over which the retroactive pay increase is calculated. This value must be greater than 0 for accurate calculations. If left blank or entered as 0, an application error will occur. The default value is set to 1, but this can be adjusted based on the retroactive pay structure.

Commission

• Gross Commission Payment: The Gross Commission Payment refers to the amount of commission earned by the employee for the current pay period. This field is mandatory for commission-based employees, and the entered amount must be greater than $1.00. If left blank or entered with an amount less than $1.00, an application error will be triggered.
• TD1X Total Annual Remuneration: The TD1X Total Annual Remuneration refers to the total annual remuneration (including salary/wages and commissions) as indicated on the employee’s TD1X form. This value is required for accurate commission-based tax deduction calculations and must be greater than $1.00.
• TD1X Total Annual Commission Expenses: This field refers to the annual commission expenses that the employee has claimed on their TD1X form. This is optional and, by default, will be set to $0.00. If applicable, it can be used to adjust the commission-related tax deductions based on the employee’s claimed expenses.