How to Use Payroll Tax Settings in Awditify - WCB & EHT Guide

This guide explains how to configure Workers' Compensation Board (WCB) and Employer Health Tax (EHT) settings in Awditify.

Getting to Tax Settings

1. Open the client you want to work with.
2. In the left sidebar, under Payroll, click Tax Settings.

The Tax Settings Page

The page has two tabs:

• WCB — Workers' Compensation Board settings by province.
• EHT — Employer Health Tax settings for Ontario and British Columbia.

Workers' Compensation (WCB) Settings

WCB premiums are employer-paid insurance that covers workplace injuries and illnesses. Rates vary by province and industry classification.

The WCB Table

Each row shows a WCB configuration for a specific province:

• Province — AB, BC, MB, ON, etc.
• Rate Group / Industry Code — the classification code for your industry.
• Rate per $100 — the premium rate per $100 of assessable payroll.
• Account Number — your WCB account number with the province.
• Effective Date — when this rate took effect.
• Status — Active or Inactive.
• GL Accounts — the expense and liability accounts linked to this setting.
• Actions — Edit and Delete.

Adding a WCB Setting

1. Click Add WCB Setting.
2. Fill in the form:

• Province (required) — select the province where employees work.
• Industry Code (optional) — the WCB classification unit or rate group code for your business.
• Industry Description (optional) — a description of the industry classification.
• Rate per $100 (required) — the premium rate. For example, if your rate is $1.50 per $100 of payroll, enter 1.50.
• Account Number (optional) — your WCB account or registration number.
• Effective Date (required) — when this rate takes effect.
• Active — toggle on to apply this rate to payroll calculations.
• Expense Account (optional) — the GL account where WCB premium expense is posted.
• Liability Account (optional) — the GL account where WCB premiums payable are accrued.

3. Click Save.

Editing a WCB Setting

1. Click the Edit action on the row.
2. Update any fields.
3. Click Save.

Deleting a WCB Setting

1. Click the Delete action.
2. Confirm the deletion.

⚠ Warning: Only delete WCB settings that have never been used in a payroll run. If the setting has been applied to payroll, deactivate it instead by toggling Active off.

Employer Health Tax (EHT) Settings

EHT is a payroll tax in certain provinces (Ontario and British Columbia) where employers pay a tax on total payroll once it exceeds a threshold.

The EHT Table

Each row shows:

• Province — ON (Ontario) or BC (British Columbia).
• Registration Number — your EHT registration number.
• Tax Year — the year this configuration applies to.
• Annual Payroll Estimate — your estimated total payroll for the year.
• Status — Active or Inactive.
• GL Accounts — expense and liability accounts.
• Actions — Edit and Delete.

Adding an EHT Setting

1. Click Add EHT Setting.
2. Fill in the form:

• Province (required) — ON (Ontario Employer Health Tax) or BC (British Columbia Employer Health Tax).
• Annual Payroll Threshold — the payroll amount above which EHT applies.
• Rate — the EHT rate as a percentage.
• Account Number — your EHT registration or account number.
• Active — toggle on to apply.
• Use Graduated Brackets — toggle on if EHT rates increase with payroll (Ontario's EHT uses graduated brackets).
• Use Notch Provision — toggle on if the notch provision applies (specific to certain Ontario EHT rules where the tax applies to the full payroll once the threshold is crossed).
• Expense Account (optional) — the GL account for EHT expense.
• Liability Account (optional) — the GL account for EHT payable.

3. Click Save.

Additional EHT Settings

If your business is associated with other employers for EHT purposes, or qualifies for special exemptions:

• Is Associated Employer — check if you are associated with other employers (affects the threshold calculation).
• Is Charity — check if the employer is a registered charity (may qualify for exemption).
• Is Eligible Employer — check if the employer qualifies for the EHT exemption.

How Tax Settings Affect Payroll

When you process a payroll run:

1. The system looks up the province of employment for each employee.
2. It finds the matching active WCB setting for that province.
3. It calculates the WCB premium as: (assessable earnings ÷ 100) × rate.
4. The WCB premium is added to the employer contributions on the pay stub.
5. For EHT, the system tracks cumulative payroll against the threshold and calculates the tax accordingly.

ℹ Info: WCB and EHT amounts appear as employer expenses on your payroll runs. They do not affect the employee's net pay.

GL Account Mapping

Both WCB and EHT settings allow you to specify:

• Expense Account — where the premium/tax expense is posted (typically a payroll tax expense account).
• Liability Account — where the amount payable is accrued until remitted (typically a payroll tax liability account).

If you do not specify accounts here, the system uses the default payroll expense and liability accounts configured in Payroll Settings.

✓ Tip: Setting up province-specific GL accounts for WCB lets you track premiums by jurisdiction, which is helpful for multi-province employers.