Recording a small business hiring credit (Employment Insurance refund)

You may receive a small business hiring credit (Employment Insurance (EI) refund) on your payroll accounts.

To enter the credit in AgExpert:

1. Open the Transaction Entry dialogue box and select Payable Charge in the Transaction type field.
2. Enter the date and select CRA – Payroll as the supplier. 
3. Enter the Total amount as a negative number.
4. Select the EI-Employer Expense (non-arms length) account.
5. Click Record.
6. Run the next payroll cycle normally. Everything will run for the full amount. This is necessary to be able to write the cheque correctly.
7. You don’t need to make any entries in the system until the next time you write a cheque to the CRA. At this point, you can apply the credit to any months of source deductions as necessary.

In this example, even though the full amount of the source deductions payable was $4,661.27, you can only cut a cheque for $4,026.27 because of the credit.

It’s important to note that even though the credit is for EI, the amount is applied to the total source deductions, including CPP and income tax.

Last updated on June 30, 2014 by FCC AgExpert