If you own a small business, it can be hard to figure out how payroll works. Trying to find the best payroll service, learning how to pay employees, and knowing the differences between each payroll program can be complicated and confusing. So your best bet as a business owner is to hire a professional payroll provider.
Businesses with less than 50 employees will benefit financially in a number of ways. Plus, you'll save time by outsourcing HR and payroll needs, because there will only be one report to approve and one invoice to pay.
When you work with a payroll processing system, they will work with you to set up the right payroll program for your business by doing the following steps:
1. Know Your Title
Before you can pay your employees, you must realize what title you fall under:
Employer: pays salaries, provides taxable benefits to employees.
Trustee: authorizes payments and/or deals with another person's property, business, or income.
2. Understand Deductions
Check which deductions through the Canada Pension Plan (CPP), Employee Insurance (EI), and the Canadian Revenue Agency (CRA) that must be made.
3. Obtain a Business Number
Ensure you have a Business Number (BN) set up ahead of time. This will make sure you are qualified and approved to own a business, and when filling out the paperwork you will need to supply:
- Your full name as it appears on your income tax return
- Your social security number
- Your phone number
- All details of your business
4. Organize Payroll Information
Compile all payroll program information including:
- Account name
- Figure out what date the employees will receive their first cheque
- Business address
- Mailing address if different from business address
- Months included in the payroll
- Pay-period, either weekly, bi-monthly, or once a month
- The number of employees
- If the business is a franchise, name of the franchisor and location of head office
- If it is a foreign-owned business, the country of the business affiliate
Register for a business registration either online, through fax or email, or by phone.
Online: Through the CRA, you can register for both a business number and a program account through their Business Registration Online (BRO) service. This is the best way to go if your business does not have any complex registration requirements.
Fax and email: You must complete form RC1, request a business number, and mail it to your nearest tax office.
Phone: Call the CRA's business inquires line at 1-800-959-5525. Before you call, it is important to know all pertinent information about each account you want to open.
As a business owner, you have many other things to worry about rather than dealing with the time consuming process of payroll. Outsourcing your payroll services to a professional provider will ensure your employees are always paid promptly and accurately. Call today for more information.