How to set up a custom earning type

1. When to use a system type vs a custom earning

1. Open the earning type reference and search for the payment.
2. If a supported system type matches (for example Bonus, Tips (Employer-Controlled), Cellular Service Allowance, Expense Reimbursement), use it. Do not rebuild it as custom.
3. If the payment belongs to a dedicated workflow (vacation pay, holiday pay, sick pay, group life), use that workflow.
4. If the concept is in Outside this earning catalog (direct tips, true WCB advances, severance, stock options, directors’ fees), stop — custom is not the right tool.
5. Otherwise, follow a custom earning recipe on the reference page, or the field guide below.

2. Create Custom Earning — field by field

Open the earning picker in a payroll draft and choose Create Custom Earning. Fill each field from the facts of the payment — not from a guess.

Name and category

Use a name your team will recognize on paystubs and year-end review (for example “Voting leave pay — 2026-10”). Category is for your own grouping; it does not rewrite CRA treatment.

CPP applicable / EI applicable

These are employer-owned classifications. They follow CRA treatment of this payment. There is no safe universal default for every top-up, award, or leave payment — check the facts (or your advisor) before you select Yes.

Income tax method

• Regular — ordinary remuneration taxed on the period.
• Bonus — irregular / bonus method for the payment (common for gifts, rewards, retro-style payments).
• Lump Sum — CRA lump-sum withholding method, for qualifying lump-sum payments such as a lump-sum back-pay settlement. Use it only when the payment facts match lump-sum treatment.
• None — only when the amount is not income-taxable (for example a qualifying non-taxable reimbursement).

Federal and provincial income-tax flags must agree with the selected method: regular, bonus, and lump sum need both tax flags on; none needs both off. Asymmetric combinations are not accepted.

Adds cash to this payroll

Checked: the amount increases employee net cash pay (a cash allowance, a cash gift, wages).

Unchecked: the amount is reportable but does not add cash again — for example a non-cash taxable benefit, or a taxable reclassification of cash that was already paid.

T4 reporting profile

Choose one of the four profiles that Create Custom Earning offers today:

• Employment income — Box 14 only.
• Taxable benefit — Box 14 and Other Information Code 40 (taxable benefits and allowances that CRA reports with Code 40).
• Taxable board and lodging — Box 14 and Other Information Code 30.
• Not on T4 — not reported on the T4 slip.

Do not pick a profile that “looks close.” If CRA needs Code 36 (loan interest benefits) or Code 66/67 (severance / retiring allowance facts), current custom profiles cannot express the slip — see Outside this earning catalog.

Vacationable and WCB

For custom earnings, you decide whether the amount enters the Vacationable Earnings base and whether it is WCB assessable. System earnings follow annual statutory rules automatically; custom earnings never inherit a system rule just because the name looks similar.

3. Worked recipes

Full recipes live on the earning type reference. Short versions for the most common cases:

Bereavement or voting leave pay

• T4 profile: Employment income
• Adds cash: usually yes
• CPP / EI / tax / VE / WCB: classify from the payment facts

Cash prize or long-service award

• T4 profile: Taxable benefit (Box 14 + Code 40) when that matches CRA treatment
• Prefer system Reward / Gift types when they match the business fact
• Qualifying multi-year award exemptions are not automated

Taxable phone or Internet (outside cellular system types)

• Prefer system Cellular Service Allowance (Cash, Taxable) or Cellular Service Taxable Benefit (Non-Cash) when they match
• Custom T4 profile: Taxable benefit so year-end includes Code 40 — do not use Employment income (Box 14 only)
• Cash-flow: check “Adds cash” for a cash allowance; uncheck for an employer-paid service benefit

Denied or unrepaid WCB advance (taxable reclassification)

• T4 profile: Employment income
• Uncheck “Adds cash to this payroll” — the cash was already paid; this entry only reclassifies
• Never create a true WCB advance as an earning

4. What custom earnings cannot do

• They cannot invent CRA codes outside the four T4 profiles (including Code 36).
• They cannot infer statutory severance / retiring-allowance eligibility (Codes 66/67).
• They cannot model true advances/loans, stock options, or directors’ fee calculations.
• They cannot impersonate a verified statutory system classification for Vacationable Earnings.

5. Year-end: the profile is frozen

When a custom earning is first approved in a payroll run, Beanflow snapshots the classification including the T4 reporting profile onto that record. Changing the type later does not rewrite approved history. Fix the setup before you approve the first run that uses it.

Frequently asked questions

When should I use a custom earning instead of a system earning type?

Use a system type whenever one matches — they are precise classifications Beanflow processes end to end across CPP, EI, tax, T4, Vacationable Earnings, and WCB. Use the dedicated workflow for vacation pay, holiday pay, sick pay, or group life. If the concept is listed under “Outside this earning catalog,” such as direct tips, true WCB advances, severance, stock options, or directors’ fees, stop: a custom earning is not the right tool.

Which T4 reporting profiles can I choose for a custom earning?

There are four: Employment income (Box 14 only), Taxable benefit (Box 14 plus Other Information Code 40), Taxable board and lodging (Box 14 plus Code 30), and Not on T4. Custom earnings cannot express CRA codes outside these four — if you need Code 36 for loan interest benefits, or Codes 66/67 for severance and retiring allowance facts, do not force a custom earning.

What does “Adds cash to this payroll” actually change?

Checked, the amount increases the employee’s net cash pay, as with a cash allowance, cash gift, or wages. Unchecked, the amount is reportable but does not add cash again — for example a non-cash taxable benefit, or a taxable reclassification of cash the employee has already been paid. It is a separate choice from the T4 profile; the two questions are not the same.

Can I change the T4 profile after the first payroll run is approved?

Yes, going forward. When a custom earning is first approved in a payroll run, the classification including the T4 reporting profile is snapshotted onto that record, so changing the type later never rewrites approved history — earlier approved runs keep the profile they ran with, while runs approved after the change use the new profile. Fix the setup before approving the first run that uses it if you want a clean history.

What can custom earnings not do?

They cannot invent CRA codes outside the four T4 profiles, infer statutory severance or retiring-allowance eligibility for Codes 66/67, model true advances or loans, stock options, or directors’ fee calculations, or impersonate a verified statutory system classification for Vacationable Earnings. For custom earnings you decide whether the amount enters the Vacationable Earnings base and whether it is WCB assessable; system earnings follow annual statutory rules automatically.