A Registered Retirement Savings Plan (RRSP) is a savings plan registered with the Canadian federal government.
Employees can contribute to a plan to help save for retirement.
RRSP contributions reduce taxable income and can reduce the amount of tax an employee has to pay.
RRSP plans can be set up with either:
Employee only contributions
Employee and employer contributions
How to set up RRSP in Sage Payroll
RRSP is set up in Sage Payroll as a deduction, with a contribution value entered into an employee record.
If you would like to view a video of this process, you can access that below:
Select Pay components.
In the Component type drop down, select Deductions.
You can now see all deduction pay components.
There are two existing pay components for RRSP:
▪️ RRSP (employee contribution)
Used to enter the employee's regular contribution in a pay run.
▪️ RRSP - non-periodic (employee contribution)
Used to record any additional contributions the employee would like to make to their RRSP plan.
For example, if they receive a bonus payment and want to add it to their RRSP.
Select RRSP (employee contribution).
In the Pay component window, choose if the employee contribution is a fixed amount or a percentage of income.
Select the Add employer contribution If you want to include employer contributions.
📌 Tip: Employer contributions can also be added as a fixed amount or a percentage of income.
▪️ Employer matching
Enter how much of the employee's contribution the employer will match.
▪️ Maximum employer contribution
Enter a limit of how much of the employee's gross pay the employer will match.
For example, the employer could match 100% of the employee's contribution up to a maximum of 4% of the employee's gross pay.
📎 Note: You can change the contributions at any time by repeating the steps above and entering new fixed amounts or percentages.
If you need to set up the RRSP - non-periodic (employee contribution) deduction, repeat the steps above and select RRSP - non-periodic (employee contribution) in step 4.
Next, add the RRSP amount or percentage to an employee record.
Add RRSP to an employee record
After you've set up the RRSP pay component, enter a deduction amount or percentage into an individual's employee record.
Select Employee from the left side of the Payroll window.
Select the employee you want to add the RRSP deduction value to.
Select Payslip values.
Scroll down to the deductions section and add the amount or percentage to the RRSP (employee contribution) field.
Select Save and close employee.
How RRSP appears in a pay run
Sage Payroll will generate employee and employer contributions based on how you set up the RRSP in the previous steps.
To view the RRSP contributions in the pay run:
Select Pay run, then Process pay run.
Select the employee to open the pay run values.
Scroll down to the Deductions section to view or change the RRSP (employee contribution) amount or percentage.
To view the employer contribution, scroll down to the Other expenses section.
📎 Note: The employer contribution will also appear as a taxable benefit in the Benefits and allowances section of the pay run.
Select Save and close.
Review the RRSP contribution amounts under the employee and employer contributions section, and select Confirm & complete pay run.