If you are reading this and a user of Microsoft Dynamics GP and Canadian Payroll, you’ll likely have already read my previous post where I’ve indicated that the Canadian Payroll module will not automatically calculate the Basic Personal Amount (Federal) for you.
If you are reading this and are not a user of Dynamics GP: don’t worry. The information in this post is generic and should be able to be used to calculate the Federal BPA for employees regardless of the payroll software you are using.
In this post, I’m simply going to outline a way to do the calculation and have included a spreadsheet for you to download if you want a quick starting point to manually determine what an employee’s Basic Personal Amount (Federal) should be, when they fall in the income range of $150,473 to $214,368.
Here’s a visual of what the spreadsheet contains. You can easily mimic what I’m showing here for your own purposes without downloading the spreadsheet itself.
The formula shows in words what the calculation is. I’ve simply given a name to each cell used in the calculation that will help visually identify where the data is coming from. The formula itself came from the T4127.
The amounts in here are current as of: January 2020.
The spreadsheet can be downloaded here. Use this file at your own risk, and please validate any results you get with the Canada Revenue Agency’s own tools to ensure it’s calculating per your specific requirements.