This guide explains how to configure payroll settings in Awditify — GL account mapping, addition types, deduction types, pay type configurations, and tax rate overrides.
Getting to Payroll Settings
- Open the client you want to work with.
- In the left sidebar, under Payroll, click Settings.
The Payroll Settings Page
The settings page is organized into tabs. Configure each section before processing your first payroll run.
CRA Information Panel
At the top of the page, a blue panel shows key CRA identifiers from the client's settings:
- Business Number (BN)
- Payroll Account (RP)
- GST/HST Number
- CRA Transmitter Number
If any are missing or incorrect, click Edit in Settings or Add in Client Settings to go to the client settings page.
⚠ Warning: The Business Number and Payroll Account number are required for T4 and CRA XML submissions. Make sure they are set correctly before generating tax forms.
General Ledger (GL) Settings Tab
This tab maps every payroll-related transaction to the correct GL accounts.
Default Accounts
- Default Wage Expense Account — where gross wages are expensed (typically a Wage Expense or Salary Expense account).
- Default Payroll Liability Account — where net pay is accrued before disbursement.
Tax Liability Accounts
Map each tax type to its liability account:
- CPP Liability Account — for employee and employer CPP contributions payable.
- EI Liability Account — for employee and employer EI premiums payable.
- Federal Tax Liability Account — for federal income tax withheld.
- Provincial Tax Liability Account — for provincial income tax withheld.
- State Tax Liability Account — for U.S. state tax (if applicable).
Employer Expense Accounts
Separate expense accounts for the employer portions of payroll taxes:
- Employer CPP Expense Account — the employer's matching CPP contribution.
- Employer EI Expense Account — the employer's EI premium (1.4× employee portion).
Vacation Pay Accounts
- Vacation Pay Expense Account — where vacation pay is expensed.
- Vacation Pay Liability Account — where accrued vacation pay is recorded as a liability.
Pay Type Expense and Liability Accounts
Assign specific accounts for each pay type if you want them separated from the default:
- Regular Pay — expense and liability accounts.
- Overtime Pay — expense and liability accounts.
- Sick Pay — expense and liability accounts.
- Holiday Pay — expense and liability accounts.
If left blank, each pay type uses the default wage expense and payroll liability accounts.
Bank Account
- Default Bank Account — the bank account from which payroll and remittance payments are made. This appears as the default when recording payments on a payroll run.
Rate Settings
- Annual Work Hours — the standard annual hours used to convert salary to hourly rates for calculations. Common values: 2080 (40 hrs × 52 weeks), 1950 (37.5 hrs × 52 weeks).
- Overtime Multiplier — the rate multiplier for overtime hours. Standard is 1.5 (time and a half).
ℹ Info: Annual Work Hours affects how the system calculates hourly rates from salaries for WCB, EHT, and other rate-based calculations. Set this to match your organization's standard work hours.
Saving GL Settings
Click Save GL Settings after making changes.
Addition Types Tab
Addition types define extra earnings that can be added to an employee's pay — such as car allowances, housing allowances, bonuses, or commissions.
The Addition Types Table
Each row shows:
- Name — the addition name (e.g., "Car Allowance," "Housing Allowance").
- Code — an optional short code.
- Category — Earnings, Allowance, Bonus, Commission, or custom.
- Calculation Method — Fixed Amount, Per Hour, Per Unit, or Percentage of Base.
- Default Rate — the default dollar amount or rate.
- Taxable / Pensionable / Insurable — yes/no indicators.
- T4 Box — which T4 box this addition reports to.
- Status — Active or Inactive.
- Actions — Edit and Delete.
Adding an Addition Type
- Click Add Addition Type.
- Fill in the form:
- Name (required) — a descriptive name.
- Code (optional) — a short code for reporting.
- Description (optional) — what this addition is for.
- Category (required) — Earnings, Allowance, Bonus, Commission, or Other.
- Calculation Method (required) — how the amount is calculated:
- Fixed Amount — a set dollar amount per pay period.
- Per Hour Worked — an amount multiplied by hours worked.
- Per Unit — an amount multiplied by units entered.
- Percentage of Base Pay — a percentage of the employee's regular earnings.
- Default Rate (optional) — the default dollar amount or percentage.
- Default Hours (optional) — default hours for per-hour calculations.
- Default Units (optional) — default units for per-unit calculations.
Tax Treatment
- Taxable — toggle on if subject to income tax.
- Pensionable — toggle on if subject to CPP/QPP.
- Insurable — toggle on if subject to EI.
- Vacation Pay Applicable — toggle on if vacation pay is calculated on this addition.
T4 Reporting
- T4 Box — enter the T4 box code where this addition should be reported (e.g., "40" for other taxable allowances).
- W2 Box — for U.S. employees, the W-2 box code.
GL Mapping
- Expense Account — the GL account for the expense side of this addition.
- Liability Account — the GL account for the liability side.
- Click Save.
Editing and Deleting
- Edit — click the edit action to modify any field.
- Delete — click the delete action to remove the type. You can only delete types that have not been used on any employee or payroll run.
Deduction Types Tab
Deduction types define amounts withheld from employee pay — such as union dues, RRSP contributions, health premiums, or garnishments.
The Deduction Types Table
Each row shows:
- Name — the deduction name.
- Code — an optional short code.
- Category — the deduction category.
- Calculation Method — how the amount is calculated.
- Pre-Tax — whether it is deducted before or after tax.
- Employer Match — whether the employer contributes and at what rate.
- T4 Box — which T4 box reports this deduction.
- Status — Active or Inactive.
- Actions — Edit and Delete.
Adding a Deduction Type
- Click Add Deduction Type.
- Fill in the form:
- Name (required) — a descriptive name.
- Code (optional) — a short code.
- Description (optional).
- Category (required) — Union Dues, RRSP, Pension, Health, Dental, Life Insurance, Garnishment, Charitable Donation, or Other.
- Calculation Method (required):
- Fixed Amount — a set dollar amount.
- Percentage of Gross — a percentage of gross pay.
- Percentage of Net — a percentage of net pay.
- Per Hour Worked — an amount per hour.
- Default Rate / Percentage (optional) — the default amount or percentage.
- Annual Limit (optional) — a maximum annual amount after which the deduction stops.
Tax Treatment
- Pre-Tax — toggle on if the deduction reduces taxable income (e.g., RRSP contributions). Toggle off for after-tax deductions (e.g., union dues).
- Reduces CPP — toggle on if the deduction reduces CPP-pensionable earnings.
- Reduces EI — toggle on if the deduction reduces EI-insurable earnings.
Employer Contribution
Some deductions have an employer matching component (e.g., RRSP matching, benefit premiums):
- Employer Match Type — None, Percentage of Employee, Fixed Amount, or Percentage of Gross.
- Employer Match Value — the percentage or dollar amount the employer contributes.
The employer portion appears as a separate expense on payroll runs and does not reduce the employee's net pay.
T4 Reporting
- T4 Box — the T4 box code for reporting (e.g., "44" for union dues, "20" for RPP contributions).
- W2 Box — for U.S. reporting.
GL Mapping
- Expense Account — for employer-matching expense.
- Liability Account — for the amount withheld (payable to the third party).
- Click Save.
Setting Up Payroll for the First Time
Follow this order when configuring payroll from scratch:
- Client Settings — set up the Business Number, Payroll Account (RP), and CRA Transmitter Number.
- Chart of Accounts — create the necessary GL accounts (wage expense, payroll liability, CPP/EI/tax liabilities, vacation accounts, etc.).
- Payroll Settings > GL Settings — map all payroll transactions to the correct GL accounts.
- Payroll Settings > Addition Types — create any custom earning types you need.
- Payroll Settings > Deduction Types — create any custom deduction types you need.
- Tax Settings — configure WCB rates and EHT settings.
- Pay Groups — set up your pay schedules.
- Employees — add your employees with their pay rates, tax settings, deductions, and additions.
✓ Tip: Use the GL validation feature on the Payroll Runs page (amber GL Issues button) to check your configuration before processing your first payroll run. It identifies missing accounts and warns about potential issues.