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7 Ways to Achieve Better Payroll Efficiency

Posted by Karen McMullen

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Jun 21, 2017 9:00:00 AM

7 Ways to Achieve Better Payroll Efficiency--.jpgBusiness owners have a lot on their plate. They’re managing employees and tracking business goals, all while handling any curve balls that come their way. Owners want to spend as much time as possible on their principle tasks, and dedicate the smallest amount of time to their administrative duties. This has never been more evident than in the payroll department, which is known to be notoriously tedious and time-consuming.

There are solutions. Below are 7 ways businesses can improve payroll efficiency.

Download our free guide on what US companies need to know about paying  employees in Canada.

1. Get Your Employees Involved

Staff can offer valuable opinions and new ideas to improve payroll efficiency. Communication with employees pinpoints areas of confusion to specifically outline where improvement is needed. Ask for feedback, weak spots, and areas that are working. Consider training employees in different aspects of payroll and administering minor responsibilities that are easy to do, and ease the burden on the payroll department.

Payroll directly effects everybody in the company. When the whole team has a say in the process, it’s easier to know how to enhance payroll efficiency.

2. Software

Payroll software works wonders by automating the repetitive tasks so it’s easier to calculate wages. A software platform means less time spent on manual data entry, and less chance of error from hand calculations. Businesses can even use the payroll software concurrently used with other relevant office programs and integrate a less complicated technological solution. Adding payroll technology eases the process of entering hours, benefits, tax deductions, and other matters in this department.

3. Hire A Payroll Clerk

Employ an in-house bookkeeper trained to handle any emergencies, questions, and other issues that arise. Duties in that department won’t have to be divided among staff with a payroll clerk managing it. Companies’ payroll efficiency increases with a knowledgeable expert who understands compliance, calculations, deductions, and anything else thrown their way.

4. Simple Policies

Miscommunication happens easily with hard-to-read policies. When the rules regarding submitting timesheets, expenses, and claiming vacation pay aren’t clearly outlined, more time will be spent cleaning up errors that could’ve been avoided in the first place. Transparent, easy to understand policies won’t have staff confused about how their pay is determined.

Don’t assume all employees know the ins and outs of payroll. A straightforward policy outlining responsibilities for pay, vacation earnings, classification, and the process itself, will have everyone on the same page.

5. Classification

If employees are misclassified, the wrong taxes are deducted, the wrong salaries paid, and the incorrect benefits or expenses are distributed. Employers will then be stuck fixing these errors and readjusting salaries.

On top of these problems in-house, it causes problems with the Canada Revenue Agency (CRA). The CRA doesn’t take worker classification lightly, and errors here result in fines and penalties. Business owners do not want to be responsible for back wages, so ensure employees are labeled correctly at the start.

6. Know the Rules

Payroll compliance is complex and includes a lot of information, which needs to be clearly and fully understood to distribute wages and deduct taxes correctly. On top of comprehending legislation, business owners need to be aware of its amendments, alterations, and new ones created. It’s vital to keep up with to ensure it’s handled properly.

Noncompliance is an even bigger headache. While it’s a pain and time-consuming, it’s worth it for payroll efficiency. The CRA is strict about following government regulations. Employers need to be aware of all their obligations to ensure compliance.

7. Outsource

There’s no need to struggle through it alone with trained professionals willing and available to handle this process for you. Outsourcing to a payroll provider provides business’ relief and eases the burden of payroll duties as related to compliance, regulatory agencies, and other aspects. Outsourcing provides peace of mind for companies knowing experts have this department under control.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

How to Make Sure Your Payroll Outsourcing is Successful

Posted by Karen McMullen

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Jun 14, 2017 9:00:00 AM

How to Make Sure Your Payroll Outsourcing is Successful---1.jpgEspecially for businesses employing citizens of other countries, outsource payroll processing and hr management is a smart idea. By outsourcing this tricky task, you are ensuring that your company is complying with all foreign payroll tax rates and other regulations. Follow these tips to make sure that your outsourced HR and payroll service is running smoothly.

Communicate Frequently

Be sure to stay in contact with your payroll provider on a regular basis. This will ensure that you are both informed on any changes or mistakes that need to be addressed. By establishing a professional relationship early on, you are holding each other accountable to best practices.

Hire An In-House Expert

Designate an employee in your local office to be the point person on outsource payroll processing and HR management. This employee will be in charge of understanding all regulations and laws for managing international employees.

Know Labour Laws

When employing people in other countries, be sure to understand their local labor laws. You will need to follow different standards than you do for your local employees. Check in with your outsourced HR specialists, as well as the employees themselves, to make sure that you are complying.

Keep Employees Informed

When expanding your business into another country, be sure to keep your in-house employees in the know. These changes may or not affect them, but this open communication and transparency is part of best management practices regardless. For your international employees, get to know them and inform them that you are outsourcing their payroll.

Ask Questions

Hiring internationally can be complicated, so don't be afraid to ask your payroll and HR company plenty of questions. They are the professionals, so they will have the answers to clear up your doubts.

Don’t Risk It

By following the above tips, you can make sure that your outsourced payroll is running efficiently and without oversight. If any problems do arise, be sure to communicate with the payroll and HR company immediately. They are there to assist you and ensure that all issues are resolved.

Many U.S. companies hesitate to expand into Canada because of the different rules and jurisdictions between the two countries. Here at The Payroll Edge, we are available to assist you with hiring and paying your Canadian employees. Contact us today to learn how we can work with you. 

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

5 Big Payroll Mistakes That Are Actually Easy to Avoid

Posted by Karen McMullen

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Jun 2, 2017 9:00:00 AM

5-Big-Payroll-Mistakes-That-Are-Actually-Easy-to-Avoid.jpgPayroll can leave most employers running for the hills, hoping it will justsort itself out. But this is one department where you can’t stick your head in the sand and hope the numbers add up. 

While payroll seems daunting, it’s not the worst, and many concerns can be handled smoothly. Here are five big payroll mistakes that are easily avoidable.

1. Poor Management of the Bare Necessities

Forgetting to total the basic numbers in a salary happens when poor bookkeeping practices are combined with inaccurate calculations. Additional payments, such as expense reimbursements, tips, commissions, and bonuses, have to be calculated before the rest of the pay, or else the total tax won’t be accurate. Keep track of these payments and leave time to add them in to avoid making tax mistakes. 

You should also maintain regular records to show you comply with payroll regulations bycreating a reference point in case a future dispute arises. Should something happen, you’ll be able to quickly rectify any payroll mistakes. Accurate recordkeeping is good practice.

2. Failing to Remit

Failing to remit government reports by the specified deadline is a common mistake that can be easily avoided. 

Employees have three source deductions from each paycheque, depending on their income and status.To deduct the correct tax amount, you need to know when to add benefits, expenses, and other non-salary monies that affect deduction. Then, you must remit these deductions. 

Failing to submit remittance reports by the required deadline can result in fines and penalties from the Canada Revenue Agency (CRA). The CRA doesn’t tolerate delays, so stay on schedule to avoid unnecessary consequences. Timely remittances and the right deductions keep you in the clear, keep employees happy, and keep you on the CRA’s good side.

3. Misclassification

Employee classification is an easily avoidable payroll mistake. Classify your employees correctly at the start. Its detrimental effects on payroll create a headache when your independent contractor is actually a regular employee. When misclassification occurs, you’ll be stuck paying back the right taxes and redistributing owed benefits.

Employees are classified in two ways. An independent contractor works with little supervision, and generally is not limited to one employer. An employee works directly under the employer,havingtheir salary, work objectives, and outcomesdetermined by said person.

The CRA imposesserious consequences as a result of misclassification, so it’s crucial to label workers correctly. If you’re unclear, talk to a third party or visit the CRA’s website to learn more.

4. Following the Law

Noncompliance is a problem easily avoided by knowing and adhering to the regulations in place. There’s a range of issues within payroll law: wage rates, pay period stipulations, reporting administration, and more.

As laws change and revisions are made, the best way to avoid compliance mistakes is to stay on top of them and make changes to your business practices as necessary. As a business owner, this is your responsibility, and while it may seem like a nuisance, compliance now keeps you out of harm in the future.

5. Doing It All on Your Own

Sometimes you want to do it all yourself, thinking you can handle it no problem. Don’t let this be your demise. While you may want to keep it all inhouse, it just might not be possible alongside all of your other day-to-day duties.Improve payroll efficiency by outsourcing payroll.

Outsourcing provides you with a team of trained experts who work to keep your payroll error-free and compliant. Give yourself peace of mind andavoid payroll mistakes with the help of a third-party payroll company.

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

Topics: Payroll Processing

5 Things Top Payroll Companies in Canada Can Offer

Posted by Shannon Dowdall

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May 31, 2017 9:00:00 AM

5-Things-Top-Payroll-Companies-in-Canada-Can-Offer.jpgIf you’re still doing payroll inhouse, you might be living in the past. With so many options available, why are you still handling payroll on your own? Let the professionals take care of this for you, so you can work on improving your business. 

Still unsure about what top payroll companies in Canada can offer? Here are five things they’ll take care of.

1. Tax Expertise

Tax law is complicated, and correctly deducting taxes gives many business owners and HR employees a headache. If you’re currently handling it yourself, you may be unclear of the deduction amounts or misunderstand the intricate laws involved. Payroll companies in Canada know what to deduct in order to calculate your payroll accurately. 

Tax laws change, remittance deadlines vary, and payroll companies are on top of it to guarantee your business complies and remits on time. They know when to add in additional payments on top of salary—benefits, expenses, commission—to confirm the correct tax amounts are deducted. They’ll ensure tax forms, from T4s to other documents, are distributed as necessary. 

Payroll companies provide expert staff who understandthe federal and provincial tax laws. This guarantees your business stays compliant with both levelsto avoid penalties and fines.

2. Correct Payroll Processing

Employees expect to be paid correctly.In addition to receiving the right pay, they need to be paid on time, as scheduled periods indicate. Payroll processing means accounting for the right hours, benefits, statutory or holiday pay, and more.Every amount has to be included for employees to be paid accurately. 

In addition to processing payroll, payroll companies will take care of direct deposit, envelope stuffing and mailing, and related administration, depending on how your business operates.Should you need payroll reports or related documents, payroll companies in Canadawill generate them for in-house review.

3. Compliance and Liability

Payroll companies go beyond calculating employee payroll to ensureit also meets the provincial and federal standards. This worthwhile investment helps save your business time and money,while verifying you’re following the letter of the law.

Payroll companies can help with the HR side of a business, such as claims processing and investigation, to reduce your overall liability by implementing the correct business procedures. Their services will help you meet all the necessary legal obligations to comply with the right payroll, tax, and labour laws.

In-house staff won’t have to spend time ensuring the right payroll regulations are met.With experts readily accessible, you can be confidentregulations are followed.

4. HR Solutions

Depending on how much you want to take off your plate, some payroll companies also offer HR services. With a variety of packages available, outsourcing HR could be beneficial if it’s just too much to handle in house.

As payroll and HR are related, it’s an additional servicesome payroll companies include.They’ll help with incoming employees, negotiations, employment issue support, hiring selection, company manuals, and other related tasks. With the two departments linked, it may be easier to have both handled by experts.

5. Extra Perks

Payroll companies in Canada provide access to additional benefits your small business may not have access to alone. Their groupbuying power allows you to get in on better packages and insurance rates you wouldn’t otherwise receive.

Small and medium-sized businesses may find it harder to get strong benefit deals, but a payroll company has the connections to supply this. With their group rates, they can bundle offers to get better packages for health insurance, RRSPs, and other benefits.

Check to see if this is something you want covered to find the right payroll company thatalso meets this requirement.

 7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

Canadian Payroll Providers Can Take Your Business to the Next Level

Posted by Stacey Duggan

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May 29, 2017 9:00:00 AM

Canadian-Payroll-Providers-Can-Take-Your-Business-to-the-Next-Level-1.jpgBusiness owners are always looking to develop their companies,whether by strengthening brand reputation or discovering new marketing trends and strategy. More businesses have become aware ofthe advantage that outsourcing payroll leads to business improvement

You’ve no doubt noticed the time this department takes and the tedious tasks involved. If you’re looking for a way to take your business up a notch, consider Canadian payroll providers.

Download our free guide on what US companies need to know about paying  employees in Canada.

Industry Expertise and Innovative Technology

The world changes, the markets change, and new trends can be hard to stay on top of while trying to make sure you also meet your business goals. With Canadian payroll providers handling payroll, you can get back to doing the best job. 

Accurately and efficiently handling payroll is their livelihood, which means they stay in the know and remain ahead of the curve for new payroll methods and changes. Their expertise will increase your department’s efficiency and give you insights into the latest HR and payroll trends. Payroll providershave a full understand of new laws, along with cutting-edge information, which are passed on to improve your business.With this information available to you, your business isalways up to date. 

Communication and technology are always changing, and to do their jobs properly these providers must have the latest information available. With their state-of-the-art software and technology to calculate payroll, you don’t have to worry about mistakes or worry aboutregularlybuying andupdating software. 

Canadian payroll providers are always trained with the latest information, tools, software, and payroll methods to make your businessas efficient as possible.You’ll get the upper hand on industry knowledge without spending additional time or money on payroll—a win for everybody.

Navigate Compliance

Tricky, complex, and time consuming, compliance is hard to navigate and comprehend if you don’t have a full legal team that knows the ins and outs of the business. Each territory comes with its own regulations, and if you’re operating or expanding into multiple places, you need to comply with each individual province’s rules. 

Wages, benefits, employment standards, human resources—your business has to meet all of these guidelines to avoid penalties, audits, and lawsuits. Canadian payroll providers minimize the risk of error with experts whose job it is to successfully navigate these waters and ensure your business is, and remains, error-free. From tax filing to work conditions, this team is in the loop to do their jobs effectively. 

You’ll have security in knowing they’re keeping your business compliant.You can eliminate mistakeswith the help of a knowledgeable team that knows how to correctly calculate payroll, file remittance reports, and generate end-of-year paperwork. These payroll professionals handle all of your payroll and tax law, human resources, and associated matters to ensure your business is compliant.

Time for Core Tasks

Payroll is tedious and time consuming. Time spent here takes time away from your core duties. With the legwork handled by Canadian payroll providers,time is freed up so you can get back to improving and expanding your workforce.With a team that’s nolonger dedicated to in-house payroll processing, you can delegate your staff to principal matters.

With the tricky aspects of payroll covered, your HR employees can get back to business. Canadian payroll providers increase your company’s efficiency and cut down on waste.

With a single team handling the peripherals of the job, removing payrolloff your plate gives you the time to focus on branding, marketing, and other company duties. Get back to focusing on your employees and meeting your business goals.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Processing

How You’ll Benefit from Canadian Outsourcing Payroll Services

Posted by Anna Mastrandrea

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May 24, 2017 9:00:00 AM

How-You’ll-Benefit-from-Canadian-Outsourcing-Payroll-Services.jpgThe number of hats you wear in your company could be a strong indicator of whether or not you should consider handling your payroll department inhouse. Payroll is a job that never really ends. You may be better off outsourcing payroll services to professionals This will allow you to spend more time operating your business. 

Canadian outsourcing payroll services will benefit your business in a number of ways. Here’s how.

 

Download our free guide on what US companies need to know about paying  employees in Canada.

Save Time

Payroll is one of those tasks that’s incredibly timeconsuming, as it must account for every single employee. You need to total hours, add expenses, deduct taxes, keep track of vacation pay, and more. Outsourcing payroll instead of handling it inhouse helps you save time, so you can focus on the revenue-generating tasks that grow your business. 

The necessary attention to detail that comes with payroll demands a lot of time and careful review. Each pay period means more data entry and more review to ensure it’s all error-free. With Canadian outsourcing payroll services, it’s taken care of,so all you need to do is regularly check in.

Reduced Costs

Compared to in-house bookkeepers and technology costs, fees are lowered with a Canadian outsourcing payroll service.The time saved calculating, deducting taxes, distributing pay,and generating in-house reports indirectly savesmoney.

Outsourcing also reduces associated software fees regarding new technology or recurring updates and maintenance. While many outsource primarily to save themselves the time and hassle, saving money is also a significant benefit of outsourcing.

Compliance Expertise

The dangers of careless payroll processing have big consequences. From paying the right wages, calculating the correct source deductions, and classification—these are just a few compliance issues you need to be in line with. Mistakes lead to audits, and penalties—situations no business owner wants to face. It can be challenging to take all this on yourself, and unless you have a legal team inhouse, you can’t be sure you’re 100-percent compliant. 

Canadian payroll services are on top of tax law and employment regulations to ensure your business is compliant. You don’t have to worry about keeping up with changes to legislation, withholding rates, remittance reports, and various government forms. It’s taken care of by professionals.

Security

Security issues can arise in a number of ways: Employees could be snooping,servers could have inadequate encryption, or you could have a lack of storage for your employees’ confidential information, for example.

Canadian outsourcing payroll services increase security of your data and lower your risk. They provide top-notch software onhighlyencrypted servers to prevent private information from leaking. Your companies’ payroll information will be protected and securely backed up. An outsourced payroll service is a safe haven for protecting payroll information, relieving you of any worry of information being toyed with inhouse.

Avoid Technology Headaches

Payroll software isn’t stagnant. New software is constantly developed, and time is required for training and regular updates. Canadian outsourcing payroll services guarantee the latest technology because they need it to do their jobs effectively. You’ll avoid missing any updates or training periods for smooth sailing.

Payroll Knowledge Always Available

An outsourced payroll service allows you to you have payroll expertise available at your fingertips.In-house payroll clerks bring with thema risk of eventually leaving the company, taking their payroll knowledge with them.

Payroll services eliminate this risk because they’re readily available for any questions you have,and they offer you direct access to experts.

Assurance and Overall Experts

Canadian outsourcing payroll services provide quality assurance and peace of mind you just can’t get on your own. You won’t have to second guess whether or not you’re meeting the required regulations because these trusted services provide them.

Knowing it’s taken care of by experts will keep you and your staff happy. Payroll services staff know the ins and outs of payroll. This will save you time and money, and put you in a better position for success.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

Payroll Processing in Canada: 5 Things to Know

Posted by Corinne Camara

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May 22, 2017 9:00:00 AM

Payroll-Processing-in-Canada-5-Things-to-Know.jpgPayroll processing is an integral part of any business. All companies have to pay their workers correctly and comply with payroll regulations. While it’s not exactly everyone’s favourite job, it’s a necessary department to keep operations running smoothly. 

To ease the process, here are five things business owners should know about payroll processing in Canada.

 

Download our free guide on what US companies need to know about paying  employees in Canada.

1. Collect Employee Information

Without the necessary employee information, you won’t get too far in payroll processing. Employee information is needed to actually pay employees, submit tax reports, and meet other compliance issues. If it’s not done properly, you’ll run into problems. It’s best to collect this information as soon as the employee has been hired. This will help you avoid mistakes later on and ensure you’re in line from the start. 

Youneedtwo pieces of information: the employee’s social insurance number and a completed TD1 form. Pay attention to the SIN number—anything starting with a “9” indicates the employee is not a Canadian citizen or permanent resident. You’ll have to verify the person’s employment status in Canada. TD1 forms records employees’ income and help you ensure you know the correct tax amount to deduct from their pay.

2. Source Deductions

Employers have three source deductions to record and remit: the Canada Pension Plan (CPP), Employment Insurance (EI), and income tax. These are based on the amounts paid to employees, as determined from their completed TD1 forms. Employee classification will also play a part in calculating deductions. 

Any benefits, expense reimbursements, holiday pay,and other amounts all have to be added to the gross pay prior to deducting taxes.This ensuresworkers’ pay is calculated correctly, and the correct tax amounts are deducted. Payroll processing in Canada is managed by the Canada Revenue Agency (the CRA), and its website lists tax rates for employers, provides tax charts and payroll deduction calculators for assistance, and states any exemptions that may apply.

3. Remittance Reports and Filing

These reports link employee tax deductions and your calculations.Payroll processing in Canada requires submittingremittance reports at year-end. These reports indicate how much tax was withheld by your employees and your business.

If you miscalculate or fail to remit on time, you could face fines and audits from the CRA. The CRA’s website outlines the remittance schedule period and businesses’ remittance classifications so you know when your report is due.

When you first register your business with the CRA, find out about your schedule to stay ahead and avoid future legal problems.

4. Employee Classification

Getting this right at the start will avoid problems down the road.When employees are initially hired, their role needs to be clear from the start. Misclassifying employees can have serious repercussions down the line because it means the wages they’ve earned, the benefits received, and the taxes deducted are incorrect.

All of these calculations are based on the worker’s status (employed or self-employed). Clarifying at the beginning the type of worker employed will steer you clear of problems later on.

5. Get Help!

You can handle payroll processing in Canada all by yourself and hope you’re getting it right, or you can consider outsourcingpayroll duties to professionals who guarantee you’re in line. You provide your business’ employee and payroll information, and they take care of the rest. They’ll calculate your payroll accurately and submit it on time; handle tax matters, like filing and remittance reports; and handle other payroll duties you need covered.

You won’t have to worry about errors or missed deadlines with experts handling the department for you. Having third-party support ensures you’re registered with the right government bodies, maintain the correct accounts, and are compliant with regulations.

If you lack time, resources, and knowledge, payroll processors provide assurance and reliability to handle this for you.

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

Topics: Payroll Processing

Why You May Need to Outsource Payroll

Posted by Ray Gonder

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May 12, 2017 9:00:00 AM

Why-You-May-Need-to-Outsource-Payroll.jpgAs your business grows, you may find it’s getting difficult to manage payroll. Payroll is a complex and time-consuming task, and it doesn’t get any easier as your company starts hiring more employees. Since payroll is a non-revenue-generating activity, spending time and money on it can be frustrating. After all, you want to spend your efforts on activities that will grow your business, like getting leads and making sales.

If you’re feeling frustrated with your company’s current payroll processes, it may be time to outsource these tasks. Here are some reasons why you might want to outsource payroll. 

Download our free guide on what US companies need to know about paying  employees in Canada.

You’re Worried about Dependability

Payroll always needs to be completed on time. Your employees need to get their paycheques on schedule, and if they aren’t paid, they’ll start looking for work elsewhere. The Canada Revenue Agency needs to receive your remittances on time, and if it doesn’t, you’ll have to pay interest fees and late-deposit penalties. When payroll is managed inhouse, it may not always be completed on time. This is a huge risk.

Your payroll clerks will get sick occasionally, and when they can’t come to work, payroll won’t get done. When they go on vacation, tasks may slip between the cracks. Worse, when your clerks quit, the payroll department will grind to a halt until you can recruit, hire, and train their replacements.

When you outsource your company’s payroll duties, you don’t need to worry about dependability. Payroll companies have a lot of employees, so if one person is sick or on vacation, a colleague can take over the duties. You can rest assured paycheques will get sent out on time, and all remittances will be paid on time.

You Want to Reduce Your Overhead

An in-house payroll department can be expensive, and outsourcing is a way to reduce your overhead and make your business more profitable. Wanting to save money is the number-one reason companies decide to outsource their payroll functions.

Outsourcing reduces your overhead because you no longer need to staff your payroll department inhouse. The costs of staffing the department aren’t limited to the salaries and benefits you pay your employees. There’s also the cost of hiring, which includes everything from reading resumes to conducting interviews to training your new hires. Plus, when employees quit, you need to spend money and time looking for their replacements.

Other costs associated with having your own payroll employees include computers, phones, office space, and software. When you outsource payroll, a third-party company is responsible for those types of costs. With a smaller workforce, you may even be able to downsize to a smaller office with less expensive rent.

You’re Expanding into Canada

If your business is based in the United States and you’re planning to hire Canadian workers, you may feel overwhelmed about handling payroll. While you may feel confident about managing payroll for your American workers, the rules and regulations in Canada are much different, and it’s easy to run afoul of the regulations if you’re not careful.

There’s a lot that US companies need to know about paying employees in Canada. American employers who want to hire Canadian employees need to establish a Canadian administrative presence. This means that you need to get a Canadian address, register as a Canadian corporation, and establish a banking infrastructure. You’ll also need to register accounts with various Canadian agencies, like the Canada Revenue Agency (the Canadian equivalent of the IRS).

Feeling overwhelmed? When you outsource payroll, the third-party company will deal with all the regulations for you. You’ll still get to recruit, train, and manage your new Canadian employees on your own, but you won’t need to deal with all the red tape that usually comes with a northward expansion.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

Your Top 7 Payroll Questions, Answered

Posted by Anna Mastrandrea

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May 10, 2017 9:00:00 AM

Your-Top-7-Payroll-Questions,-Answered.jpgWhen you start a new business, you need to learn to perform many business tasks quickly. Business owners need to wear a lot of hats, and it can be overwhelming to learn how to handle tasks as varied as human resources, accounting, and payroll. For new business owners, the latter can be especially frustrating due to its time-consuming nature and the number of rules and regulations that need to be followed.

If you’re not quite sure how payroll works, you’re not alone. Many new business owners have questions about this essential activity. Here are the answers to your top seven payroll questions.

Download our free guide on what US companies need to know about paying  employees in Canada.

1. How Does Payroll Work?

When you have employees, you’re responsible for paying their wages on time. You’re also responsible for calculating the appropriate deductions from your employees’ wages. In Canada, there are a lot of deductions that need to be calculated. You’ll be responsible for deducting income tax, employment insurance premiums, and Canada Pension Plan (CPP) contributions from your employees’ paycheques.

2. How Do You Get Started?

To get started, you’ll need to get a business number if you don’t already have one. You’ll also need to register for a payroll program account. This 15-digit account will be used to identify your business with the government. You need to register for this account before you can send remittances to the government.

If you’ve already hired employees but don’t have a program account yet, you’re still responsible for calculating and remitting deductions. If you don’t meet these requirements, you could get fined, so sign up for your account and calculate deductions right away.

3. How Do You Calculate Deductions?

If you only have a couple of employees, you may have time to calculate deductions manually. The Canada Revenue Agency provides a calculator on its website that you can use to calculate deductions for your employees.

When your business grows and you hire more employees, manual calculations will take up too much of your precious time. As you grow, you may want to invest in software to simplify your process.

4. What Is a Remittance?

On a regular basis, you need to send the money you’ve deducted from your employees’ paycheques to the government. In most provinces, this includes CPP contributions, employment insurance premiums, and income tax.

In Quebec, you may have to deduct additional funds, like the Quebec Parental Insurance Plan, and remit them to the government as well.

5. What Records Do You Need to Keep?

When you have employees and are calculating deductions, you need to keep many records to back up your claims. You need to keep track of how many hours each of your employees worked, as well as the amounts you withheld for each deduction type.

You also need to keep the tax forms your employees filled out when they were hired. These records need to be stored in Canada, and you need to hang on to them for six years in case the Canada Revenue Agency asks to see them.

6. What Happens If You Don’t Comply?

It’s very important to stay on top of your deductions and remittances. If you don’t follow all the rules and regulations regarding payroll, the Canada Revenue Agency can impose serious penalties on your business. You can be fined as much as $25,000, and you could spend as long as 12 months in prison. Since these penalties are serious, you need to be very careful to follow the laws.

7. What If You Own a US-Based Company?

If your new business is based in the United States and you want to pay employees in Canada, you still need to follow Canadian payroll regulations. You need to follow additional rules like establishing an administrative presence in Canada and establishing a banking infrastructure. This makes your expansion more complicated, so you may want to outsource the process to minimize your risk.

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

Topics: Payroll Processing

When Should Businesses Turn to Payroll Outsourcing?

Posted by Corinne Camara

|

May 8, 2017 9:00:00 AM

When-Should-Businesses-Turn-to-Payroll-Outsourcing.jpgHandling the payroll department in-house worked in the beginning, but over time and as a business grows, it’s no longer the best option. There’s plenty of reasons why businesses should outsource payroll, but it’s also about knowing when they should. 

If more and more time is devoted to the intricate tasks of payroll instead of the money-making responsibilities of a company, it may be time to consider payroll outsourcing.Download our free guide on what US companies need to know about paying  employees in Canada.

Falling Behind on Principle Tasks

Consider how much time is currently dedicated to the payroll department. Not just tallying hours, but deducting taxes, adding in additional compensation, managing direct deposit, generating in-house reports, et cetera. Those tiny chores add up, and if that doesn’t leave the time desired to complete core tasks, there’s a problem. 

Even with an in-house team, small businesses are always fighting the clock to get tasks done. As a business grows, so do its payroll obligations, meaning more time is needed to calculate and ensure it’s administered correctly. Internally managing payroll is a huge commitment, and any errors create more problems, tacking on additional time to be resolved. Employees’ duties can be better spent on business growth, strategy, and branding.

Not Understanding the Law

Payroll legislation is a tricky topic for most people. It’s more than paying employees correctly, they have to be paid in certain increments according to provincial periods, the right statutory pay needs to be included on the right holidays–and that’s just the tip of the iceberg. Payroll outsourcing guarantees correct calculation in line with all provincial and federal rules, which is good for business reputation and overall employee satisfaction. 

Tax regulations go hand-in-hand here, and have to be deducted correctly each pay period from the employees and employer, to be submitted in remittance reports according to the appropriate schedule. Late remittanceslead to fines, audits, and penalties from the government. If a business can’t keep a legal team in-house to manage this, payroll outsourcing is the next best option.

Improper Staff Knowledge

The in-house team may lack the right skillset. There’s software training, generating reports, knowing how to effectively deduct taxes, pay overtime, and distribute other non-salary monies. While staff may have the software under control, it’s still subject to manual human error, and there’s no guarantee staff is on top of changesand amendments.

If it feels like the team currently handling the department simply lacks the experience and knowledge to handle any payroll problem thrown at them, it may be time to consider payroll outsourcing. For expertise in dealing with all problems under the payroll sun, outsourcing is a viable solution.

Can’t Ensure Security

In-house encryption servers and highly-protected firewalls don’t protect businesses from snooping employees, the possibility of tampered records, and cloud-based payroll software breaches. Current staff could leave for another opportunity or other possibility, and they’ll walk out with knowledge of your business’ confidential information.

Even when only a few can access payroll, there’s still risks of leaks or editing of information. Payroll outsourcing services use top-of-the-line encryption servers to ensure sensitive data and staff payroll recordsare well protected.

Rising In-House Costs

Studies continue to show that the total cost to pay in-house staff to calculate payroll ismore than the cost of outsourcing.Payroll outsourcing reduces direct labour costs, such as salary and benefit pay because businesses only have to pay a flat monthly fee (plan-depending). With a variety of packages to choose from, companies can find the best solution to meet their payroll needs.

Software and technology costs are eliminated when a business no longer has to include that expense in the budget. Payroll outsourcing services provide the latest technology and continuous updates to calculate payroll correctly. With SMBs already on a tight budget,allow payroll outsourcing to free up a little more room.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

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