Shareholder did their own payroll and I caught a few unnecessary EI payments made during the year when paying themselves. They’ve been set to EI except, however, there is a nominal amount that needs to be corrected from employee and employer EI premiums.
-Subtract unnecessary amounts from employee and employer EI premiums (box 18 & 19).
- Unnecessary employee EI premium will be added to box 22
(Taxpayer will receive the amount as a refund on T1)
Box 80 will decrease by the unnecessary employer & employer EI premiums.
In the bookkeeping, I see no need to make an adjustment for unnecessary employee premiums because whether its an employee EI premium or income tax deducted it falls under payroll liabilities.
However, an entry will be necessary to correct the employer EI premium (expense)
DT Payroll Liabilities XXX
CT Payroll Expense XXX
Does anyone have any thoughts or anything they would like to add?