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Employing Canadian Workers? Our Business Taxes Can Be Quite the Pain!

Posted by Stacey Duggan

|

Aug 7, 2014 8:35:00 AM

Business and Payroll taxes can be a pain for U.S. based companiesEmploying Canadian workers and deducting the correct Canadian payroll taxes from their paycheques can be difficult if you’re an American or foreign company outside of North America. We’ve compiled a list of Canadian taxes a company employing Canadian workers should be aware of, if they are not engaging with an Employer of Record service.

Canadian Business Taxes

All Canadian businesses must file a corporate tax return with the Canadian government. This corporate tax return is due within the six months after the end of the company’s fiscal year.

If you are engaging with Canadian companies for the sale of your product or service you need to be aware of the sales tax for the province you are doing business in. For goods and services sold in Canada, every company must charge the applicable provincial sales tax. The same is true in the reverse, if you purchase goods and services in Canada, you will be charged the sales tax. You are then required to reconcile these debits and credits to pay or report to the Canada Revenue Agency. Every province has a different rate and the remittance schedule can vary as well based on company size. In Ontario, it is called the HST (Harmonized Sales Tax) and the rate charged is currently 13%, in Alberta that rate is 5% for their GST (Goods and Services Tax). For a full list of HST/GST rates by province, please visit the Canada Revenue Agency’s website.

Another tax to be aware of as a foreign company is the possibility of the 15% withholding tax. If a U.S. or foreign company chooses not to register a Canadian business presence but does engage in a sales transaction with a company in Canada, that company must withhold and remit 15% of any payments for services rendered in Canada.

Canadian Payroll Taxes

Some taxes are consistent for all employers across Canada such as the Canada Pension Plan (CPP), Employment Insurance (EI) and Worker’s Compensation.  These taxes may be consistently seen across all provinces and territories but the rate that they are charged can vary.

Other taxes are province or territory specific. For example, in Ontario employers must pay the Employer Health Tax (EHT) and in Quebec there are three additional taxes over and above the federal ones. Please visit the Canada Revenue Agency’s website for further information on provincial payroll taxes and rates.

If you have not engaged an Employer of Record here in Canada and have successfully registered your business, enrolled for the various government accounts and are up to date on your taxation responsibilities, you may be ready to hire your first employee.

If you’d prefer to have an Employer of Record handle the complexities of Canadian employment law, contact The Payroll Edge today and we’ll take care of the workforce compliance issues for you! 

7 Signs It's Time to Outsource Payroll

Topics: Payroll Tax, Payroll Tax in Canada, Employee Payroll Deductions, CRA Payroll Tax, Payroll Deductions, Calculating Taxes in Canada, Employee Payroll Tax, Small Businesses Payroll

How to Stay On-Top of Changing CRA Payroll Tax Rules

Posted by Stacey Duggan

|

Aug 4, 2014 9:30:00 AM

how to stay on top of changing cra payroll tax rulesChanging CRA payroll tax rules are a fact of doing business in Canada. These changes occur on at least an annual basis, with the potential for numerous other changes throughout the year. Changing CRA payroll tax rules can come about as the result of legislation, court cases, provincial changes, and even individual interpretations of different bureaucrats. Keeping up with changing CRA payroll tax rules is the responsibility of the individual business owner, and any penalties for mistakes will fall on them. There are a few ways to keep up with changing CRA payroll tax rules, some of which are easier than others.

Become a Payroll Specialist

If you have the time, money, and energy, you can take all of the necessary classes to become a payroll specialist yourself. It takes years of education, followed by years of experience to master Canadian payroll laws. Once you have the education and experience, you'll still need continuing education classes to keep up with recent and upcoming changes. All of this effort will take your attention away from your business, but you'll have a bright future as a payroll expert.

Learn as You Go

Another method to keep up with changing CRA payroll tax rules is by learning as you go. You can try to keep up with all of the changes while still maintaining all of your other business responsibilities. You'll pay for any mistakes you make along the way, but that should help motivate you to learn faster. The CRA will be happy to explain your errors to you during administrative hearings and, potentially, court cases.

In-House Help

One popular method managing changing CRA payroll tax rules is to hire an in-house payroll specialist. You'll need to pay for the latest software and training they need to do their job, along with continuing education classes and other expenses. Keeping up with the changing rules is a full-time job, so your payroll specialist won't be much help in managing other aspects of your business. It's truly a single-use position, and one with little margin for error.

Outsource Payroll Service Provider

If you're looking for a low-cost, no-hassle solution with little potential for errors, then a payroll service provider is your best option. Your account will be handled by a team of payroll experts who already have all of the necessary education, training, and experience. As an added benefit, you'll be sharing the costs of software and continuing education with all of their other clients--so you don't have a large capital investment in your payroll service.

To stay in business, payroll service providers must be up to date on the latest changes, knowledgeable about future changes, and aware of any differing interpretations. This in depth experience in all areas of payroll legislation is what sets them apart from any in-house payroll experts.

Canadian Payroll Tax Deduction Calculator

Topics: CRA Payroll Tax

What’s The Best Canadian Payroll Calculator?

Posted by Stacey Duggan

|

Jan 17, 2014 1:40:00 PM

What’s The Best Canadian Payroll CalculatorLike a personal income tax calculator, a Canadian Payroll Calculator, like the one here can be a handy tool for determining if you’re on the right track with exemptions and withholdings. However, like a personal tax calculator, a Canadian Payroll Calculator is no substitute for the assistance of an experienced professional. If an online calculator could replicate professional experience, there would be no more need for CPAs, accountants, or tax attorneys. As things stand, calculators are limited by the knowledge and experience of the person using them. If you make an incorrect entry, or don’t fully understand how to apply the thousands of different rules and laws, then the output will be inaccurate. With personal taxes, this could result in an audit, fines, and back payments of thousands of dollars. When handling payroll for dozens or hundreds of employees, the costs could increase exponentially.

No Substitute for Experience

Let’s face it – payroll laws are complicated, no matter what side of the US-Canada border you’re on. If you happen to operate on both sides, then the complications are doubled. Payroll professionals spend years learning all of the intricacies of the law, and even that robust knowledge can’t prepare them for everything. When new laws are adopted, there’s no way for the authors to foresee every possible situation. When unique situations arise, applying the law correctly requires experience with previous, similar, situations. You can’t get that experience from just an online Canadian payroll calculator.

Payroll professionals handle every conceivable situation, week in, and week out. Every day is spent gaining more experience in the application of payroll regulations. While you or your payroll department may spend a few hours each week on payroll, payroll providers do it every single day. This level of experience allows them to quickly and accurately handle the most complex payroll needs.

Get Additional Value from A Payroll Provider

For US businesses operating in Canada, payroll regulations are just one of many day-to-day issues that must be dealt with. Maintaining a physical business presence, government accounts, insurance, and workplace compliance are a few more. Trying to manage the legal requirements of a business on both sides of the border can tax your resources and exhaust your staff. And, if you make any mistakes, the costs can quickly offset any profits you’ve enjoyed. No Canadian Payroll Calculator can tell you if you're handling your legal compliance correctly.

Payroll service providers in Canada also operate as Employers of Record (EOR). Performing the same functions as a Professional Employer Organization (PEO) in the US, an EOR makes it easy to manage your business from a distance. Instead of paying to set up your entire business organization north of the border, you pay the EOR, which already has all the business resources you need in place. Instead of spending your valuable time jumping through legal hoops and dealing with multiple layers of bureaucracy, you actually spend your time running your business. The EOR has the expertise and experience to handle all of the legal requirements, while you focus on the things that make your business successful.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Service Provider, Outsourced Payroll Service, Canadian Payroll, Canadian Payroll Deductions, Payroll Tax in Canada, Canadian Payroll Regulations, Employer of Record, Payroll Calculator, CRA, CRA Payroll Tax, Canadian Payroll Calculator

What is the Best Canadian Payroll Calculator?

Posted by Ray Gonder

|

Dec 27, 2013 9:00:00 AM

What is the Best Canadian Payroll Calculator2Any business (including those based in the US) that needs to pay Canadian workers could benefit from a Canadian payroll calculator. These calculators can help you figure out basic withholdings for Canadian taxes, the national pension plan, and unemployment insurance (called employment insurance in Canada). For everyday withholdings and remittances, a Canadian payroll calculator can point you in the right direction. However, there are some limitations to a Canadian payroll calculator that you need to take into account. Failing to address those limitations can cause you to withhold too little or too much money from your workers’ checks. When that happens, you’ll be on the hook for back payments, repayments, fines, and more.

What it Does

A Canadian payroll calculator takes the information you enter, and gives you a quick overview of the most likely withholdings and remittances. It bases the output solely on the information you’ve entered, so be sure to double check what you enter. Using current laws and regulations, the calculator is able to predict the standard withholdings for your employees. This will help give you an idea of what you should be holding back from each paycheck. While it’s certainly not foolproof, it can show if your withholdings are currently way off.

What it Doesn’t Do

A Canadian payroll calculator can’t do advanced error checking, and it can’t offer legal advice. It assumes that you understand, and are correctly applying, all of the Canadian workplace regulations. If you misunderstand or misapply a regulation, the calculator will give you an erroneous result. If you misclassify a worker, or enter the wrong tax information for them, again, you’ll get a false result. The calculation is only as accurate as the data entered, so be sure you know what you’re entering.

The Best Calculator

Right now, the most reliable Canadian payroll calculator is a professional payroll service provider (like The Payroll Edge). They know and understand all of the relevant laws and regulations governing payroll withholdings and remittances. The staff spends every day dealing with every possible payroll scenario, so they don’t get tripped up by the subtleties of the law. They know how to appropriately classify employees, to make sure they’re being entered correctly into the payroll system. A professional payroll service provider can also offer advanced error checking, so simple arithmetical mistakes don’t end up costing you fines and back payments. While a payroll calculator can point you in the right general direction, a professional payroll service provider can ensure that you achieve, and maintain, full compliance with all applicable laws.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Service Provider, Outsourced Payroll Service, Canadian Payroll, Payroll Tax Calculations, Payroll Tax in Canada, Canadian Payroll Regulations, Canadian Payroll Service, Payroll Calculator, CRA Payroll Tax

Where to Find PEO Services in Canada

Posted by Stacey Duggan

|

Dec 24, 2013 9:00:00 AM

Where to Find PEO Services in Canada3In the States, businesses that are looking to ease their workforce administrative burden often turn to Professional Employer Organizations (PEOs) for help. PEO services cover everything from calculating payroll and issuing checks, to handling tax remittances and workplace safety compliance. Using PEO services, businesses are able to turn burdensome administrative tasks over to trained, experienced professionals. This allows the business to better focus their efforts on their core business objectives. If you’re looking for PEO services in the US, a simple Google search or old-fashioned telephone directory will point you in the right direction.

But what if you’re a US business looking to hire someone in Canada? In Canada, you’ll find the same services under a different name. Canadians use the term Employer of Record (EOR) to provide the services you would get from a PEO in the States.

A Rose by Any Other Name

In Canada, an EOR may use a variety of names to describe itself. Businesses providing EOR services may be payroll service providers, tax service providers, staffing agencies, and many others. Though they go by different names, EOR services are quite similar as PEO services in the states. Payroll and personnel administration is difficult enough for businesses with workers in a single country. Once you add in the complexities of managing a second, foreign payroll department, it can quickly become overwhelming. An EOR eliminates the need for a second payroll system, helping US businesses hire workers across the border as quickly as possible. For US businesses trying to expand their service reach across the border, these companies provide a vital service.

One-Stop Compliance

Without the services of an EOR, US businesses would have to establish government accounts, banking, insurance, payroll, and more according to federal and provincial law before a single employee could be hired. This process could take months, cost thousands, and the potential for mistakes is enormous. An EOR makes hiring north of the border seamless as they act as the employer in the eyes of the Canadian government. This mitigates the risks and ensures compliance when it comes to the rules and regulations in Canada. So when you’re ready to hire, you can.

Cross-Border Complexity

PEO services are incredibly popular in the US due to the difficulty of managing payroll on your own. Now, imagine trying to handle payroll laws in two different countries on your own. The complexities multiply exponentially. Keeping up with everything from Canadian payroll deductions to requirements for workplace signage can quickly exhaust the resources of a new expansion. Any mistakes, on either side of the border, could end up costing a fortune. Fortunately, EOR and PEO services make it easy to handle payroll administration with minimal difficulty, and minimal risk of errors.

12 Things an American Company Looking to Hire a Worker in Canada Needs to Know

Topics: Payroll Service Provider, Outsourced Payroll Service, Canadian Payroll, Canadian Payroll Deductions, Canadian Payroll Regulations, Payroll Service, EOR, PEO, Professional Employer Organizations, CRA Payroll Tax, Canadian Employer of Record, Full Service Payroll Provider, PEO Services

A Payroll Calculator that Calculates Canadian Payroll Deductions

Posted by Stacey Duggan

|

Dec 20, 2013 11:30:00 AM

A Payroll Calculator that Calculates Canadian Payroll DeductionsIf you’re a Canadian employer, you may be looking for a payroll calculator to help you determine the appropriate withholdings for your workers. To avoid the expense of fines and back payments, deductions must be accurately withheld and remitted to the proper government agencies. Using a payroll calculator is a quick, easy way for employers to calculate basic deductions. Of course, not all deductions will be basic, and no calculator can fully replace the expertise and guidance of an experienced payroll professional. And, like all payroll calculators, the results will only be as accurate as the data that you enter. Any mistakes, omissions, or regulatory misinterpretations entered by the user will create erroneous results. While a payroll calculator can be a useful tool, it cannot, nor is it intended to, serve as a standalone solution for determining the proper deductions for every employee in every situation.

More than Just the Math

Like all calculators, a Canadian payroll calculator takes the information you give it, does the math, and generates a result. Unfortunately, Canadian payroll regulations are about much more than some simple math. There are complexities and subtleties to the law that only the most experienced payroll professionals are equipped to deal with. A payroll calculator can’t tell you if you’ve properly classified your employees, or if new positions or jobsites have caused changes to their status. It also can’t tell you if you’ve applied the correct payroll regulations in every situation. The calculator assumes that you have entered all of the information correctly, and creates its results based on that information. If you don’t have a firm understanding of all of the applicable laws and regulations, then the results from the payroll calculator can be misleading.

Learning the Ropes

For businesses that try to manage their own payroll, there are quite a few obstacles that can’t be overcome with a calculator. Learning, understanding, and properly interpreting Canadian payroll regulations is just one of these obstacles. There are also government accounts to create and maintain, establishing banking and insurance accounts, and making sure that employees and workplaces adhere to health and safety regulations. Trying to manage everything by yourself can be time consuming and expensive. In the event that any mistakes are made along the way, the costs and time involved can increase exponentially. While a payroll calculator can help you with some very basic needs, you’ll still have a lot of work left before you can start hiring and paying employees.

A Tool, not a Solution

A payroll calculator, like the one found here can be a great addition to your toolbox. However, no calculator can replace the guidance of a qualified payroll professional. Only they can tell you if you’re understanding and interpreting all of the regulations correctly. And, while a calculator can only calculate, a payroll service provider can do so much more. They can manage and administer all of your payroll and personnel needs, freeing you and your staff to focus on your core business pursuits.

They can monitor employees and job sites to ensure continuing compliance with all federal and provincial regulations. And, when it comes time to pay your employees, they have all of the necessary personal, equipment, and training to calculate withholdings, make remittances, and issue paycheques. Use the calculator for the basic needs it was meant to address—for your more complex payroll issues, you need to trust the professionals at a qualified payroll service provider.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Tax, Payroll Service Provider, Outsourced Payroll Service, Payroll Tax Calculations, Payroll Tax in Canada, Canadian Payroll Regulations, CRA, CRA Payroll Tax, Payroll Regulations

Manage Your Payroll the Right Way with an Outsourced Service Provider

Posted by Ray Gonder

|

Nov 20, 2013 9:00:00 AM

describe the imagePayroll processing is an important part of any business. Making sure everyone is paid accurately, and on time, is critical. Making sure all of your reporting and remittance obligations are met is equally critical. Mistakes in any part of your payroll processing can lead to labour issues, audits, and expensive legal entanglements. There are several ways to handle your payroll processing, some more difficult than others. Handling your payroll the right way will save you time, effort, and money. Handling it the wrong way can end up costing you way more than you bargained in the long run.

DIY Payroll Processing

You always have to option of just doing it all yourself. Most businesses start out this way, with the owner handling payroll until it becomes too large to manage. You can take the time to learn all of the regulations, attend conferences to learn about new legislation, and even buy yourself some expensive software. Of course, then you have to learn to use the software, and keep up with updates and changes to the software. Once you have the knowledge and the software, you can spend hours every week handling all of the paperwork for payroll processing, as well as addressing any employee issues with payroll. As your business grows, you’ll spend more and more time on payroll, and less time focused on your business.

Pass it Along

Often, when payroll processing gets too complex for the owner, it gets handed down to the growing HR department. They inherit the responsibility of keeping up with changing legislation, learning new software, and dealing with employee issues. They often have little or no previous experience with payroll processing. They get to start from scratch, and learn the ins and outs of payroll service as they go. Of course, they aren’t liable for any mistakes they might make along the way. That burden still falls directly on the company. Incorrect payments or improper remittances can trigger a visit from the CRA. If they find problems with compliance, the fines and penalties go to the company, not to the HR staff.

Amateurs vs Experts

Payroll processing is a lot like other business services. It’s best to leave it in the hands of agencies that specialize in making sure it’s done right. Most businesses use accountants for taxes, shipping companies to deliver goods, and service agencies to repair equipment. Why do they outsource all of those needs? Because smart owners know that no business can do everything. Letting trained, experienced experts handle your tangential business needs just makes sense. When you try to do everything, you end up putting too much stress on your personnel, and pulling their focus away from your core business pursuits. By outsourcing some of your needs, you allow your staff to maintain laser-focus on growing and improving your business.

An outsourced payroll service relieves pressure on your staff, and relieves you of the stress of worrying about potential audits and penalties. They have years of experience interpreting and applying new and existing legislations, allowing them to easily navigate the complex payroll requirements. They undergo frequent, rigorous training, and have access to the latest and best software. Using their services is just like engaging a tax professional or repair service. If you want the best service, you hire someone who specializes in the service you need, and who has a proven track record of success.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing, Payroll Service Provider, Outsourced Payroll Service, Canadian Payroll, Canadian Payroll Deductions, Payroll Tax Calculations, Payroll Tax in Canada, Canadian Payroll Regulations, Canadian Payroll Service, Payroll Calculator, CRA, CRA Payroll Tax, CRA Compliant

Canadian Payroll Tax Calculations - What You Need to Know

Posted by Stacey Duggan

|

Nov 18, 2013 1:20:00 PM

Canadian Payroll Tax Calculations   What You Need to KnowIn an effort to save money, it can be tempting to try to handle as many tasks as possible in-house. Many businesses are asking their personnel to handle a growing list of responsibilities, regardless of their training or expertise. While some tasks afford a margin of error, and allow for time to learn the responsibilities, handling Canadian payroll tax responsibilities isn’t one of those tasks. If you’re considering handling Canadian payroll tax compliance in-house, there are a few things you should know beforehand.

It’s Not Easy

Canadian payroll tax laws are complex and difficult to learn, let alone master. To make matters worse, the application of those laws can change from one situation to the next, and may not be applied the same way by every agency. Learning which laws apply in which situation takes time and experience. During that time, any mistakes can cost the business dearly. The CRA, and other agencies, won’t accept ignorance or inexperience as an excuse for non-compliance. At best, mistakes will result in back payments, along with the associated costs of processing and distributing new cheques. At worst, fines and criminal penalties can be imposed for any errors in reporting or remittances.

It’s Not Constant

Learning Canadian payroll tax laws is a constant process. The laws, at all levels, change frequently. These changes can be in the form of new legislation, changes to existing legislation, or differences in application from year to year. Staying on top of these changes requires constant vigilance on the part of your personnel. They’ll have to attend seminars, training sessions, and read up on proposed and actual changes. This investment of time and effort will come directly out of their overall productivity. If they make any mistakes with the new legislation, any savings you enjoy by handling Canadian payroll tax in-house will quickly disappear.

It’s Not Without Risk

All of the time, effort, and money invested in training your personnel can vanish after a single CRA audit. Government agencies have stepped up their compliance checks, meaning more agents looking for more mistakes. The fines and penalties for first-time offenders have risen steadily in recent years, making any errors more costly. Even the best training, and intentions, aren’t a substitute for experience. While your personnel are trying to develop that experience, the CRA will be watching for any slip-ups.

There’s an Easier Way

Using your in-house personnel to handle Canadian payroll tax compliance may appear to save you money on upfront costs. You’re already paying your personnel, so why not add to their responsibilities? However, when you add in the cost of training, the lost productivity, and the potential fines and penalties, it becomes a losing proposition. There are ways to cut expenses that don’t put your business at greater risk of a government audit. Using an outsourced payroll provider saves you the expense of constant training, and keeps your personnel focused on tasks that directly benefit your business pursuits. A payroll provider also minimizes the risk of a government audit, saving you money on fines and legal representation during government actions. When you do the math, it just makes sense to let a payroll provider handle your Canadian payroll tax obligations.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Service Provider, Outsourced Payroll Service, Canadian Payroll, Canadian Payroll Deductions, Payroll Tax Calculations, CRA Audit, Canadian Payroll Regulations, Employee Payroll Deductions, Payroll Calculator, CRA, CRA Payroll Tax, Payroll Deductions

How to Avoid Staying Educated on Always Changing CRA Payroll Tax Rules

Posted by Stacey Duggan

|

Nov 11, 2013 9:00:00 AM

How to Avoid Staying Educated on Always Changing CRA Payroll Tax RulesMany businesses still choose to handle payroll using in-house personnel. This is usually done either out of habit, or out of the belief that it saves the business money. Whatever the reason, it’s becoming increasingly expensive and risky to handle CRA payroll tax compliance using your own staff. As the CRA payroll tax rules continue to evolve and change, it’s becoming more difficult to keep up with all of the complexities. Any money saved by using your own staff can be instantly wiped out by a single error.

A Better Use of Time

Keeping up with CRA payroll tax legislation requires in-depth training and retraining. Even with all of that training, it still takes constant practice to meet all of the legislative requirements quickly and efficiently. Unless you have a dedicated payroll staff, your personnel probably only deal with CRA payroll tax requirements on a weekly or semi-weekly basis. This leaves gaps in their experience that can allow mistakes to creep in. With all of the other daily tasks your HR personnel are responsible for, it can be difficult for them to find the time to keep up with all of the payroll requirements. When they’re focused on payroll, they aren’t as productive in their other tasks. When they’re focused on their other tasks, they’re not gaining experience in CRA payroll tax compliance.

Employee Issues

Part of handling payroll involves handling employee questions and concerns. Employees always have questions about insurance and tax withholdings, overtime pay, missing hours, and myriad other concerns. Addressing these issues will consume even more time that your staff could be spending on more productive pursuits. Any mistakes must be corrected, CRA documentation must be changed, and new checks must be issued. The hours lost fixing minor errors can quickly add up to far more than the company is saving by using in-house personnel to handle payroll.

Convoluted Compliance

Even if your personnel have the right training and adequate experience to handle most payroll needs, that’s no guarantee that they’ll understand all of the nuances of the CRA payroll tax requirements. Worker classifications, insurance requirements, reporting documents, and more, can all change without notice. Something as simple as a trip to another work site can change the reporting requirements for a worker. If your staff isn’t familiar with the triggers that can cause these changes, they can fail to comply with the most current legislation. When that happens, fines, penalties, and back pay can quickly add up to tens of thousands of dollars.

Expensive Errors

Over the past year, the CRA has drastically increased their compliance efforts. This means more audits, more time spent navigating bureaucracy, and more potential for fines and penalties. Once you’re involved in a CRA payroll tax audit, you’ll probably want to engage legal counsel. At current hourly rates, it won’t take long for a labour attorney to cost far more than a payroll service.

Payroll Peace of Mind

Engaging a payroll service can eliminate all of these problems and concerns. Their dedicated staff is focused on payroll, and payroll regulations, every single day. They have the education, training, and experience to maintain compliance with the most recent legislation. Many of them are involved in shaping upcoming legislation, so they can be prepared for changes before they even happen.

Using a payroll service allows your personnel to focus on tasks for which they are better suited, and which are more productive for your business. The payroll service can handle everything from employee queries to CRA audit preparation. With their professional CRA payroll tax services, you save time, aggravation, and avoid compliance issues.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Service Provider, Outsourced Payroll Service, Payroll Tax Calculations, Payroll Tax in Canada, CRA Audit, Payroll Service, Payroll Calculator, CRA, CRA Payroll Tax, Payroll Deductions, CRA Compliant

Can You Afford to Hire a Full-Time Payroll Clerk?

Posted by Stacey Duggan

|

Nov 4, 2013 9:00:00 AM

Can You Afford to Hire a Full Time Payroll ClerkMany businesses employ a full-time payroll clerk to handle all of their payroll needs. They believe that an in-house clerk offers more benefits, and lower prices, than an outsourced payroll provider. On its face, this can seem to be true. However, looking at all of the hidden expenses of an in-house payroll clerk reveals just how costly they are. When you compare that cost to the advantages you get from a payroll provider, you’ll see just how affordable they really are.

In-House Advantages

Having a full-time payroll clerk on staff does offer some advantages. They can be 100% dedicated to payroll issues, instead of juggling multiple responsibilities. This gives them the time and freedom to keep up with changing regulations, and to focus entirely on handling your payroll needs accurately. Often, payroll is simply one of many responsibilities handled by a staff member. This can lead to inaccuracies, as they can’t be focused on payroll at all times. A full-time payroll clerk is much less likely to run into issues.

At What Cost?

Figuring out what an employee costs per year seems like a simple process. Add up the costs of their salary, benefits, and vacation days, and you have your answer, right? Wrong. This is what you’re paying them, not necessarily what they’re costing you. A full-time clerk will have sick days, vacations, and other absences. The time they spend away from your business will have to be covered by another employee. The time that employee spends on payroll will have to be covered by yet another employee. This cycle can drag down productivity throughout your administrative departments.

A full-time payroll clerk typically gets paid for the hours they’re at work, not necessarily the hours they’re working. There are times when they may have nothing to do. You’ll still be paying them for that time. During any periods of downtime, you’ll still be paying them for their presence.

One overlooked expense is training for the payroll clerk. The payroll laws are constantly changing and failing to keep up with them can lead to expensive fines and penalties. To avoid this, your clerk will need to undergo continuing education, attend conferences and workshops, and train on the latest software. The money for all of that training has to come from somewhere.

Even with all of the money you spend on training, there are no guarantees that your payroll clerk won’t make a mistake. Even though it’s their mistake, you’re still on the hook for all of the legal penalties. You could spend a lot of money hiring, training, and retaining a full-time payroll clerk, just to end up paying fines as well. As the laws and issues surrounding payroll become more complex, the chances of an error increase.

Professional Help

An outsourced payroll service provider offers all of the advantages of a full-time clerk, without the hidden expenses and risks. Instead of a single employee dedicated to your payroll needs, you can have an entire agency full of payroll professionals. You don’t need to worry about finding a replacement when your clerk is out of the office, or the effect their absence will have on your other employees. You pay the service provider for the services they render, not the time they spend in the office. The cost of their training is distributed across hundreds of clients, meaning that you get the best training for you payroll service at a fraction of the cost. Best of all, with their training, experience, and expertise, the chance of costly errors occurring is reduced to almost zero.

What Are You Leaving to Chance by Handling Payroll on Your Own

Topics: Payroll Processing, Outsourced Payroll Service, Canadian Payroll, Payroll Tax in Canada, Canadian Payroll Service, Payroll Calculator, CRA, CRA Payroll Tax, Payroll Deductions, Payroll Clerk

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