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Your Top 5 Canadian Payroll Tax Questions Answered

Posted by Karen McMullen

|

Sep 21, 2015 9:00:00 AM

Your_Top_5_Canadian_Payroll_Tax_Questions_AnsweredHiring employees in Canada comes with certain risks and responsibilities, especially when it comes to Canadian payroll tax. Payrolling your first employee can be stressful: there’s a lot to know, many regulations to follow, and many processes and procedures to go through to ensure you’re following Canadian law and paying your Canadian workers correctly.

Here are answers to the top five questions you might have about Canadian payroll tax, so you can feel confident about hiring your first employee and handling payroll and taxes in Canada for the first time.

1. What are my responsibilities regarding Canadian payroll tax as an employer?

To begin, you’re going to have to get a business number if you do not already have one, and then you’re going to have to register with the CRA for a payroll account. Next, you will need to have the employees you hire provide you with their SINs and fill out the necessary information forms that will determine how much income tax they will pay.

Once employees start to work and accumulate pay, it will be your responsibility to calculate their salaries and their mandatory deductions, including federal and provincial taxes, employment insurance premiums, and Canada pension plan contributions, along with any other deductions that need to be made.

Once these calculations have been correctly made and your employees have been paid, it is also your responsibility as an employer in Canada to remit the workers’ deductions as well as your own employer contributions to the CRA regularly. You will also have to file taxes annually.

2. How can I easily calculate Canadian payroll tax and deductions?

It might seem pretty straightforward to calculate Canadian payroll tax and deductions, but it can become increasingly complex. The amounts will vary according to the TD1 forms your employees filled out as well as the year of operation and the location you’re operating in. Specific rules and exceptions for tax, CPP, and EI deductions can be found in the Income Tax Act, Canada Pension Plan and Employment Insurance Act. The easiest way calculate deductions is to check out the CRA’s tax tables and use an online deductions calculator.

3. What do I need to know about preparing T-4 Slips?

You are responsible for preparing T-4 slips for all of your company’s past and current employees who received income that year. You must send these slips out by February 28 of each year, and keep records of all income paid as part of your Canadian payroll tax obligations.

4. How do I remit deductions to the taxation center?

You will need to send remittances to the government on a regular basis, by the required deadlines, by cheque or money order. The first time you do so you will also need to add a letter stating that you’re a new remitter and provide your business number, company name, address, and phone number, and the period the remittance is for. The deadlines you will have to follow will vary depending on your average monthly withholding amount. Penalties for missed deadlines are 10 to 20 percent of the money owing.

5. Can anyone help?

Absolutely. If your payroll needs do not warrant a full-time, permanent payroll clerk, you can either outsource your Canadian payroll tax needs to a payroll provider or engage an employer of record (EOR). In both cases, you will hand over the responsibility to a third party.

Both the provider and the EOR will ensure that your employees are paid accurately and on time, ensure that all appropriate taxes and other deductions are withheld, that your remittances are filed on time, and that your company is processing payroll in compliance with Canadian regulations. The only difference is that with a payroll provider, you are still the employer of your workers and have full responsibility towards them while an employer of record takes over as the legal employer and you enter into a co-employment relationship.

Learn What Makes Us Unique

Topics: Payroll Tax, Canadian Payroll, Payroll Service, Payroll

How to Choose the Best Payroll Service

Posted by Stacey Duggan

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Mar 2, 2015 9:00:00 AM

HowtoChoosetheBestPayrollServiceTaking care of payroll responsibilities for your company requires more than just keeping track of your employees’ hours. It’s a time consuming and often confusing process. This is especially true for small business owners who don’t have the experience or expertise needed to process payroll legally and effectively. If you’re overwhelmed by your agency’s payroll service and are considering outsourcing the task to an outside payroll provider, here are some tips on choosing the best service for your agency.

Do You Need a Payroll Service?

The first thing you should ask yourself when you’re considering taking the leap to outsourcing is whether or not you really need it. If you have a background in accounting, or someone in your firm does, you may not need to outsource.

However, even if you understand the ins and outs of payroll, you must also consider if you have enough time to continuously research legislature, keep on top of deadlines, withhold taxes, file quarterly reports, issue tax forms, and handle unemployment, leave, and disability assessments. If you’ve decided that you’re out of your element or simply don’t have the time to process your own firm’s payroll, your next step is finding the best service for your company.

Payroll Financing

If your cash flow is often in the red or unpredictable, you should consider engaging a payroll service that also offers payroll financing. Staffing agencies have an upside down cash flow cycle—having to pay employees before being paid for their services. That’s why agencies can greatly benefit from payroll financing. Your provider will finance your payroll so you can always have enough cash on hand to pay your employees on time, every time. With some providers, your investment can be protected with client credit checks and receivables insurance.

Canadian Expertise

If you have an established firm in Canada, are considering expanding your foreign business into Canada, or you’re just starting out, you should choose a payroll service with Canadian expertise. The employment laws and tax requirements in the country are unique and it takes a provider that truly understands the intricacies of Canadian law to ensure that you’re always compliant. A provider with Canadian expertise can keep up with changing government policies and market fluctuations for you, so you can focus on your sales and service.

HR Administration

If you’re having trouble handling your HR administration tasks—either due to lack of time or lack of experience—you should consider outsourcing to a payroll service that also provides HR administration. Taking care of your employees requires more than just cutting pay cheques every other week. Onboarding, termination, policies and procedures, health and safety, the employment standards act, and many other HR responsibilities will need to be taken care of. This entails a lot of paperwork and know-how. Luckily, if you choose to engage a back office service provider that can take care of your HR administrative tasks for you, you won’t have to worry about any of it.

Budget

Before you choose a payroll service, consider how much you’re willing to spend. You’ll likely save costs by outsourcing your payroll since you’ll be saving yourself the time from doing it yourself or saving money from hiring a full-time bookkeeper. The back office service provider you choose should only charge you for the work that’s completed, so there are no hidden costs. However, costs and service options will vary, so you should consider your budget before making a decision.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Service, Back Office Service Provider

Where to Find PEO Services in Canada

Posted by Stacey Duggan

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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

Make Sure You Don’t Miss Any Canadian Tax Withholding

Posted by Stacey Duggan

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Nov 27, 2013 9:15:00 AM

Payroll Service Providers Ensure You Don’t Miss Any Canadian Tax WithholdingMissing Canadian tax withholdings can be an expensive mistake for your business. The fines and penalties for improper withholdings can easily exceed the cost of hiring a Canadian payroll service provider to do it right the first time. In the event of an audit or formal hearing, you’ll also have to factor in the expense of legal representation. Of course, you also have to consider the amount of time you’ll spend dealing with multiple levels of government bureaucracy. In the end, the services of a Canadian payroll service provider would end up saving you a lot of money, time, and aggravation. Whether you’re a Canadian employer or a US-based employer paying employees in Canada, a Canadian payroll service provider can make sure that your withholdings are accurate and timely.

Canadian Businesses

Payroll regulations in Canada are incredibly complex. They also change frequently, and with little notice. To make matters worse, the application of those regulations can change depending on your situation. Filing deadlines may change, depending on your previous withholdings. The necessary withholdings may change, if the nature or place of employment for a worker changes. Keeping up with changes to the regulations, and changes to the way they apply to your business, can be more than a full-time job. If you get it wrong, even once, the fines and penalties can be staggering. Engaging the services of a Canadian payroll service provider helps ensure that you never get it wrong.

US Businesses

If you’re a US-based business paying Canadian employees, things are even more complicated. You have to deal with all of the same rules and regulations that govern Canadian businesses. You also have to deal with all of the issues inherent in running a business across international borders. And you have to do it all while still dealing with all of your payroll issues in the States. You will essentially be running two separate, and incredibly complex, payroll departments. Mistakes on either side of the border can cost you dearly.

Using a Canadian payroll service provider as an Employer of Record (EOR) offers you some key advantages. Similar to a US Professional Employer Organization (PEO), an EOR acts as your administrative presence in Canada. They can handle all of your payroll needs, including withholdings and remittances. They can also help you establish a business infrastructure, meet insurance requirements, and other practical and legal necessities. With their help, you don’t have to worry about missing withholdings, managing multiple payroll departments, juggling international legal compliance, or other issues.

Work More, Worry Less

Using a Canadian payroll service provider allows you to spend more time focused on mission-critical tasks. You don't have to spend time managing multiple payroll departments, learning international payroll requirements, or dealing with bureaucrats from two separate countries. Instead, you can let a Canadian payroll service provider handle all of those issues for you, while you remain focused on more important business pursuits.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Tax, Payroll Service Provider, Outsourced Payroll Service, Canadian Payroll, Canadian Payroll Deductions, Payroll Tax Calculations, Payroll Tax in Canada, Canadian Payroll Regulations, Payroll Service, Canadian Payroll Service, U.S. Companies operating in Canada

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

Posted by Stacey Duggan

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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

3 Ways Payroll Processing Can Be Made More Efficient

Posted by Ray Gonder

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Oct 4, 2013 4:18:00 PM

3 Ways Payroll Processing Can Be Made More EfficientProcessing payroll adds a thick layer of administrative work to your already hectic days. Payroll is complicated, ever-changing, and annoyingly details-oriented. In an effort to streamline operations and be more efficient, Canadian employers generally opt for one of the following three methods.

1. Forget About It.

Sure, you'll still pay your employees, but you won't bother with all that troublesome CRA stuff. Think about it: if you didn't have to maintain your CRA account, calculate deductions, take care of payroll remittance, and mess with those troublesome T4 Slips and year-end reports, you'd be as free as a bird. You could get so much more done. You could actually focus on the exciting and profitable parts of your business.

There's just one problem with this method of processing payroll . It's so illegal that your business will probably not last very long. The first month or two that you fail to deduct and remit payroll taxes from your employees' pay cheques, the CRA will levy fines, penalties, and interest on your company. If you still persist in ignoring your legally obligated payroll duties, you may be prosecuted, fined again, and possibly even imprisoned. Clearly, this is not a good option for streamlining your company's payroll processing.

2. Hire a Full-Time Payroll Clerk.

If you've decided that the first option is not for you, you might consider hiring a full-time payroll clerk. A full-time payroll clerk would have time to take care of all the details for you so you would be free to manage your business and do what you do best. Essentially, you'd be hiring an employee to take care of administrative work that doesn't directly benefit your business. And you'd have to pay for benefits for this employee, including employer contributions to benefits and Employment Insurance.

This gets to be quite expensive, and although you'd have a person on your staff to manage the day-to-day headaches incurred by processing payroll, you're still ultimately responsible for this person's job performance. If your full-time payroll clerk doesn't have the experience to manage complicated payroll issues, or if the laws change and your clerk is unaware of the changes, you're still responsible for any problems. So while this option is better than the first option, it still comes with some drawbacks. Is there a better way?

3. Outsource Payroll Processing.

Wise employers know better than to neglect payroll responsibilities or to hire a full-time, on-staff worker to handle them. They know that forming a partnership with a payroll processing service provider can get them expert service at a reasonable price, leaving them time to focus on running and growing their businesses.

Payroll service providers like The Payroll Edge can guarantee that your payroll will be processed correctly every time, and they have experts on-staff who can answer tricky questions and find solutions to unusual circumstances. They have contacts at the CRA, so it's easier for them to reach governmental agencies to get specific answers than it would be for you or for one of your employees. Best of all, a reputable payroll processing firm will understand the details of your payroll, ensure its accuracy, and know how your payroll affects your company's legal compliance. A partner like this is an incredible asset to your company.

If processing payroll has become a heavy burden for you and for your company, do yourself the favor of investigating the third option: outsourcing payroll processing. To learn more about how outsourced payroll processing can benefit your company, contact us at The Payroll Edge.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Service Provider, Payroll Service, Payroll, Employee Payroll Deductions, Government Compliance, Best Payroll Calculator, CRA, payroll solution, Dependable Payroll Service

How to Do Small Business Payroll in Canada

Posted by Ray Gonder

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Jul 26, 2013 10:30:00 AM

Small Business Payroll in CanadaSetting up a small business requires an incredible amount of attention to detail. You need a business development program, a place to work, a marketing strategy, and financing. Each of these tasks will affect the way your business runs and whether or not it will be successful. As soon as you hire employees, you also need to learn how to set up systems and policies for your payroll. Although payroll may seem like a simple, relatively unimportant task in the big picture of your business, it's critical to your business' functionality and compliance with the law.

To break down the intricacies of Canadian payroll, let's take a look at small business payroll in six steps.

1. Opening your CRA payroll account.

One of your first orders of business as a new small business owner is to acquire a Business Number and open an account with the Canada Revenue Agency (CRA). You can open your account by going to CRA's Business Registration Online or by sending an application to the CRA by mail or fax. After you've finished your registration, the CRA will mail you a confirmation letter that contains your business and payroll account number, and you can commence operating your payroll.

2.  Opening up a Worker’s Compensation account.

Different from the US, every Canadian worker is covered under the government worker’s compensation program.  Each province has their own premiums and rules surrounding these accounts as well as different remittance cycles from the schedule set up for your payroll account. What rate group your workers fall into depends on the type of work and province as well. A small business owner should have an understanding of these rules, rate groups and remittance schedules so they can be assured that they are not over or under paying premiums.

3. Calculating Deductions.

One of the more mundane jobs as a small business owner is calculating deductions from your employees' paycheques. Each time you run payroll, you will calculate CPP contributions, EI premiums, and income tax deductions based on the amounts you pay your employees. In addition, you also must calculate your (employer's) share for each of these deductions. As well as the payroll deductions, you must calculate your worker’s comp premiums to be paid based on each employees pay.  To further complicate the calculating of deductions, certain tax groups have minimums and maximums that you must track.  For example in Ontario you do not have to remit Employer Health Tax until you have reached a payroll of $400,000. For the Canada Pension Plan you no longer deduct this tax once the employee has reached the maximum to be deducted.

4. Remitting Payroll Deductions.

Based on the schedule assigned to you by the CRA and the provincial Worker’s Compensation Board, you must remit these taxes on time or face the accrual of interest and fines for late payments. Don’t forget that these schedules can be very different and forgetting a deadline is not an excuse the various government bodies will accept.

5. Providing Employee’s Paystubs.

Each time you pay an employee you must provide them with a paystub outlining the gross amount, deductions taken broken down by tax type, and any other additions or deductions taken from their pay.  Most employers also show the ongoing year to date totals of gross pay, taxes paid and net pay.  As well as all of these, most paystubs will show the employee their vacation accrual as well.

6. Filing Information Returns.

Each February, you have a responsibility as an employer to complete and file T4 Summaries and T4 Employee Slips for income tax purposes. Each of your employees should receive a T4 Slip from you that accurately states the total amount of CPP contributions, EI premiums, and income tax deducted from their paycheques for the entire previous year. The T4 Summary is a total of all the amounts reported on your employees' T4 Slips, and it's submitted either electronically or physically to the CRA.

As you can see, payroll is an important part of any small business' operations. If you're overwhelmed with the meticulous, ongoing nature of payroll, or if you are a US company unfamiliar with Canadian payroll rules and regulations, consider outsourcing payroll processing to a third party to save you time and allow you to focus on other aspects of your business.

7 Signs It's Time to Outsource Payroll

Topics: Outsourced Payroll Service, Canadian Payroll, Canadian Payroll Deductions, Payroll Service, Worker's Compensation, Canada Revenue Agency, Small Business Operations, Small Business Payroll

Why You Could Be on Your Own Interpreting MOL Regulations and Rulings

Posted by Ray Gonder

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Jul 5, 2013 9:00:00 AM

Ministry of Labour RegulationsThe last thing any business wants is to be visited by a Ministry of Labour inspector and be found non-compliant with any of the hundreds of MOL (Ministry of Labour), ESA (Employee Standards Act) or OHSA (Occupational Health and Safety Act) regulations. Especially if it results in an order or a fine.

But sometimes, despite best efforts, employers may find themselves being called out for being non-compliant, even in the face of there being no specific regulation.

A recent Ontario Labour Relations Board case illustrates how employers can sometimes face confusing direction from the Ministry of Labour. An Ontario book distributor received a compliance order from a Ministry of Labour inspector, stating that the "push forces" necessary for moving a wheeled cart up an eight-foot ramp put employees at risk for developing a musculoskeletal problem.

Wanting to comply with MOL regulations, the company sought out the ergonomic thresholds in the Occupational Health and Safety Act (OHSA). Was the ramp too steep? Was the cart too heavy? But there were no specifications in the Act stating any ergonomic threshold requirement, making complying with the order next to impossible. How much would the angle of the ramp need to be adjusted, or how much lighter would the cart need to be, to be compliant? And would either of these modifications be enough to satisfy the MOL – maybe there was something else they should be looking at? It also made them wonder how the Inspector could claim non-compliance in the face of there being no specific regulation about the matter.

When they contacted the MOL for further guidance, they were needless to say surprised when the Inspector refused to identify ways or means for the company to comply with the order.

So the company went to the OLRB (Ontario Labour Relations Board) to complain that the MOL inspector wouldn't help them, arguing a MOL inspector ought to offer guidance to help them properly comply with MOL regulations. The OLRB ruled "the Inspector was under no obligation to do so" and stated that it was the employer's responsibility to "derive a compliance plan that is the most sensible for its operations," and upheld the Inspector’s order.

Any responsible employer is clearly always trying to make plans that are "the most sensible for its operations." That's what responsible employers do. The problem comes when you're told by a government agency that you're not in compliance, but then not given any guidance as to how to comply.

How does a company proceed under such ambiguity? How do you know when you're complying with MOL regulations and when you're not? If you can't ask the MOL questions about your company's ESA/MOL compliance, where can you turn for support?

Like the book distributor, you could hire an expensive HR consultant and a lawyer, and hope they can make such bureaucratic insanity disappear. But you could spend a fortune having them second-guess every possible non-compliance scenario.

But if you were a member of The Payroll Edge, though, you could quickly get the answers you needed without the huge expense. More than just payroll processing, The Payroll Edge has experts on staff who study and work with the practical applications of MOL regulations all the time. They can help you decipher ambiguous calls for compliance and give you peace of mind regarding your company's standing with the Ministry of Labour. You can pick up the phone anytime and benefit from the years of experience helping all kinds of Canadian businesses all across the country.

Contact us at The Payroll Edge for more information about how we can assist you with deciphering MOL regulations and rulings.

7 Signs It's Time to Outsource Payroll

Topics: Ministry of Labour, Payroll Service Provider, Payroll Service, Payroll Calculator, MOL, Payroll Deductions, Dependable Payroll Service, Compliance

Three Top Reasons to Consider an Outsourced Payroll Service

Posted by Ray Gonder

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Jun 27, 2013 9:00:00 AM

Three Top Reasons to Consider an Outsourced Payroll ServiceDepending on how many roles you play in your company, there could be dozens of reasons to outsource to a payroll service. Payroll is a job that never really ends, so handing it off to professionals allows you to spend more time on running and operating your business. When you are less concerned about government compliance and making sure everyone gets paid correctly and on time, you have less stress and can focus on the more important aspects of your work.

1. Save Time

From the moment you hire an employee, you have payroll responsibilities to manage. As part of the hiring process, you must collect information on your new employees and fill out tax forms in their behalf. At the end of each calendar year, you will fill out T4 forms and send year-end summaries to government reporting agencies. And that doesn't include your ongoing payroll responsibilities.

Each time you process payroll, you will calculate benefits and deductions from each employee's pay cheque, figure out payroll amounts based on tables published for the province or territory in which each employee reports for work, and send remittances to several different government agencies, each of which has its own due date throughout the month.

As you can guess, all of these tasks can take a great deal of your precious work time, time which could be much better spent in the service of managing and growing your company.

2. Reduce Stress

Not only is payroll time-consuming, but it can also be highly stressful. When you handle payroll yourself you must open and operate a payroll account with the Canada Revenue Agency (CRA). Of course, this involves time and energy setting up the account initially, but the real stress comes in your day-to-day operations. Each time you run payroll, you'll have to check contribution rates, maximums, and exemption charts for income taxes, CPP contributions, and EI premiums.

If employees have questions or if the rules and regulations change (which they inevitably do), you have to make adjustments, possibly mid-payroll cycle. If you're not an expert in Canadian payroll, these adjustments can be quite stressful, especially when you consider that if miscalculate, you could face fines.

3. Stay Compliant

And that leads us to a third reason to consider outsourcing payroll service: to stay compliant. When you take care of your payroll yourself, you run the risk of non-compliance. The laws, rules, and regulations surrounding payroll can be confusing, and to make matters worse, they change as laws and guidelines change. The following is an example of why it's important (and difficult) to stay compliant.

A recent minor change could make a big difference for your employees, but many Canadian employers simply don't know about the finer points of payroll tax deductions. If an employer chooses to pay for third-party short-term and long-term disability benefits, the insurance benefits will be taxable. This rule also applies if an employer funds their own disability program. If you choose to fund such a program, as the employer you will claim a deduction on line 229 of your T1 premiums, and you may do so for all premiums paid since 1968 that you haven't previously claimed.

Such fine points of payroll taxes are known only to those who are experts in the field or who spend an enormous amount of time keeping up on all the latest changes to payroll rules and regulations.

If you want to save time, reduce your stress, and stay compliant with Canada's payroll tax laws, it's time to consider outsourcing your payroll service. For more information, contact us at The Payroll Edge. We're ready to help.

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

Topics: Payroll Service Provider, Outsourced Payroll Service, Payroll Service, Best Payroll Calculator, payroll solution, Payroll Deductions, Dependable Payroll Service, Great Payroll Service Provider

Five Ways to Increase Payroll Efficiency

Posted by Ray Gonder

|

Jun 19, 2013 9:00:00 AM

Five Ways to Increase Payroll EfficiencyAre you ready to spend less time on payroll and more time running your business? Maybe what your business really needs is reorganization in your warehouse or the hiring of a few new employees. Make no mistake about it, these tasks will consume a great deal of your time and energy. But if you're constantly concerned about processing payroll, you may not have the resources you need to accomplish them.

If you find yourself in this situation, it may be time to find ways to increase payroll efficiency. By increasing efficiency, you'll find yourself with more time on your hands to take care of the tasks that will really make a difference to your business. Let's take a look at five ways to increase payroll efficiency at your firm.

1. Delegate Payroll Processing

Payroll must be processed year round, and this continual drain on your time and resources saps your company of much-needed attention. Ongoing payroll processing involves attention to detail. Each employee's deductions including Canada Pension Plan and Employment Insurance must be calculated correctly along with their taxable and non-taxable benefits. Employer deductions including payroll taxes, workers compensation and the Employer Health Tax in Ontario, must also be calculated correctly based on the rules of the Province the work is being performed in.  These deductions must then be remitted to the various government agencies often with different payment deadlines.  By having a payroll service handle this ongoing work, your company will run much more efficiently.

2. Outsource year-end tax reporting

The end of the year can be a particularly trying time for a company. You may be wrapping up final reports and recovering from a busy season, and this is not the time of year to add extra payroll duties to your already busy schedule. Assign a payroll service to handle direct reporting to the proper tax authorities and to file statements on your behalf. You can wash your hands of tax responsibilities by hiring a payroll service to handle them for you.

3. Guarantee Compliance

The last thing you need is to have a government agency questioning the accuracy of your payroll reports and remittances, but this happens when businesses handle payroll without a firm grasp on the details and ramifications. You can operate more efficiently when you hire a payroll service that guarantees on-time, accurate employee payroll that is handled by certified payroll professionals.

4. Outsource Payroll Complications

Having employee’s means much more than just paying them.  It means trying to answer questions about payroll that just aren’t black and white to something more serious like calculating termination and filling out a Record of Employment correctly. When you have a Certified Payroll Professional only a phone call away you can be guaranteed that the questions are answered correctly by someone who understands the intricacies and nuances of Canadian tax law.

5. Rely on Human Resource Professionals

Let’s face it, being an employer comes with much more responsibility than just payroll and scheduling.  There are other things to consider such as employment agreements, training, performance issues and terminations.  Then there are the bigger issues such as workplace injuries and government audits. With a payroll service provider who also has expert and ongoing knowledge of these ever-evolving key areas, your payroll and HR management are taken care of seamlessly.

By increasing payroll efficiency in one or all of these ways, you'll gain time to improve your business and run your firm the way you want to. You'll also find yourself much less frustrated when you don't have to deal with excessive paperwork and details. Working with government agencies can be difficult, especially if you're unfamiliar with their policies and procedures. Turn these tasks over to professionals who have years of experience in both payroll and HR. You may discover that you've never enjoyed your work more. Contact us to learn more about our services.

Topics: Payroll Service Provider, Canadian Payroll, Payroll Service, Canadian Payroll Service, Best Payroll Calculator, payroll solution

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