The hardest part about Canadian payroll tax calculations is not knowing that there are things you don’t know. There are so many subtleties to the law that are impossible to learn strictly by reading the statutes. Different situations can arise that completely change the way certain regulations are interpreted and applied. For many of these situations, experience is the only teacher. Unfortunately, experience can also be a harsh mistress. With Canadian payroll tax calculations, your first indication of a mistake could come in the form of an audit, along with fines and back payments. There’s a steep learning curve, and trying to go it alone can lead to costly errors along the way.
Even the Basics Aren’t Basic
On its face, one of the simplest parts of Canadian payroll tax calculations is determining the appropriate withholdings. There are even payroll tax calculators that can be of great assistance in making these calculations. Unfortunately, no calculator can tell you if you’ve classified your employees correctly, if all of their paperwork is in order, or if any circumstances exist that could change the necessary calculations. Figuring out what to enter in the calculator is entirely up to you. If you get it wrong, the resulting figures will also be wrong.
Knowing the Law is Different from Understanding the Law
Reading a statute doesn’t tell you anything about how it’s being applied in the field, during audits, and in courtrooms. Once the dry text hits real life application, a world of different interpretations come into play. If you’re not dealing with these laws every day, you won’t be developing the experience necessary to understand the complex interplay between legislation and application. To compound this problem, the way the laws interact with each other can be equally complex. Knowing which law to apply in a particular situation can only be learned through experience.
Constant Change Requires Constant Vigilance
The laws governing Canadian payroll tax calculations change, at a minimum, on an annual basis. Extreme situations or legal interpretations can bring about sudden changes to the law at any time. Keeping up with current and proposed changes is difficult enough—having an ear to the ground for sudden, unexpected, changes can be impossible for someone who doesn’t deal with payroll regulations on a daily basis. Some changes have a grace period to give you time to adjust; others will require immediate changes to the way you handle Canadian payroll tax calculations.
Asking for Help when You Need It
One of the hardest parts of Canadian payroll tax calculations can be admitting that you need help. Business owners tend to want to handle as many processes as possible in-house. That’s admirable—until it jeopardizes the company. Handling Canadian payroll tax calculations on your own can spread your staff too thin, cause unneeded stress, and open you up to fines, back payments, and lawsuits. Using a payroll service provider is a quick, easy way to relieve the burden on your staff, while also minimizing your exposure to legal problems. With their experience in the payroll industry, they can give you the peace of mind that comes from knowing that you’re in full compliance with all applicable payroll regulations.