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Pension Adjustment Formulas

If your organization has an RPP or DPSP, you’ll need to include a Pension Adjustment in box 52 of your T4 tax slips. There are two ways to create the pension adjustment (PA) for your employee’s tax slips:

  • Create a formula that calculates the PA

  • Import the PA

This article will guide you through setting up a PA formula. For more information on importing, go to Import Tax Slip Pension Adjustments.

There are two steps to creating a PA formula:

  1. Add the variables that the PA formula will use from the deduction/benefit codes in Avanti. You’ll create the variables on the PA Codes tab of the tax slip group.

  2. Create the formula from the PA variables and the formula functions. You’ll create the variables on the PA Formulas tab of the tax slip group.

Add the PA Formula Variables

Create the variables from the deduction, benefit, or earning base of your deduction/benefit codes. You can use up to 15 variables in the PA formulas.

Additional Information 
You can only use the variables you create here in your PA formulas.

Step 1: In the Avanti Desktop Application, navigate to Modify Tax Slip Groups.
By default, this can be found in Canadian Payroll >> Tax Slip Processing.

Step 2: Select 2023 for Tax Year.

Additional Information
If you haven’t already created your 2023 tax slips, go to Create, Update, and Review Tax Slip Groups
 for more information.

Step 3: Select a tax slip group that requires a pension adjustment, then select Modify.

Step 4: Select the PA Codes tab.

Step 5: Select a deduction/benefit code to use in the formula in Deduction Codes.

Step 6: Select which portion of the deduction/benefit code will replace the variable in Source from:

  • Deduction

  • Benefit

  • Earning Base

Additional Information
The Source determines which portion of the deduction/benefit code will populate the formula during the tax slip extraction.

Step 7: Repeat Steps 5 and 6 for each variable you are using in the PA formula.

Nice work! You’re all set to add the PA formula.

Add the PA Formula

Create the P formula using the variables from PA Codes and formula functions. Formula functions are used with the variables to create each variable line. You can use up to nine lines in the PA formula.

For more information on Pension Adjustments, visit the CRA’s Pension Adjustment Guide.

Common Formula Functions For PAs

Before you start, you’ll want to learn more about the standard formula functions you may use in PA formulas.

  • Add the two values together

  • Subtract the second value from the first value

  • Divide the first value by the second

  • Multiply the two values

  • @Min() Uses the minimum value from the comma-separated list of values.

    Example @Min(V1,V2)
    If V1 is greater than V2, this becomes V2
    When V1 is less than V2, this becomes V1

  • @If() This uses three comma-separated values. The format is @If(argument, value if true, value if false)

    • The first value is the argument

    • This becomes the second value if the argument is true

    • This becomes the third value if the argument is false

      Example @If(V1>V2,1,0)
      When V1 is greater than V2, this becomes 1.
      When V1 is less than or equals V2, this becomes 0.

Create The PA Formula

Step 1: Select the PA Formulas tab.

Step 2: Enter the formula using the PA Codes and the Formula Functions in formula lines F1 - F9.

Additional Information
To use a variable in the formula, include the V# found to the left of the deduction code. In the example above, you would use V1 to include this variable in the formula.

Step 3: Enter the final formula line in PA.

Step 4: In Pension Plan, enter the Registration Number of the Pension Plan.

Step 5: Enter the formula details in the Comments.

Additional Information
To make it easier to maintain formulas, we strongly recommend adding the formula’s details in Comments, including any information about amounts that must be updated annually.

Step 6: Select Test to ensure the formula is correct.

Additional Information
Use the Test to try different variable amounts and confirm the formula produces the correct results.

Remember that pension amounts are rounded to the nearest dollar. Avanti will automatically do this for you on the T4s.

Step 7: Enter amounts for your variables, then select Calculate.

Additional Information
Pension adjustments are rounded to the nearest dollar, so there’s no need to include decimals in your values. Avanti automatically adjusts Box 52 to the full dollar amount on your T4s.

Step 8: Repeat Step 7 until you’re confident the formula works correctly.

  • If the formula doesn’t work correctly, select Exit and go to Step 2 to update the formula. If you’re still having issues, we’re here to help! Don’t hesitate to get in touch with Client Care.

Step 9: Select Exit to close.

Step 10: Select OK to save the PA Formula.

Congratulations! You’re all done updating the PA formula and you’re now ready for the next step in the Tax Slip Process, Extract Employee Tax Slip Data.

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