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Keep Your Small Business out of Trouble by Outsourcing Your Payroll

Posted by Ray Gonder


Aug 17, 2015 9:00:00 AM

Keep_Your_Small_Business_out_of_Trouble_by_Outsourcing_Your_PayrollManaging payroll for small companies can be a daunting and time-consuming task for any small business owner. Managing employee payroll in-house requires totaling employee hours, performing gross-to-net calculations for each employee, calculating and depositing payroll taxes, and preparing and filing tax returns accurately and on time. 

If all of that sounds stressful or completely confusing to you, you're better off outsourcing your employee payroll to a payroll processing company. This way, the experienced professionals can handle all of your payroll responsibilities, while you are free to focus on your business. You'll be surprised by how much time you will save, now that you're not handling all the payroll responsibilities on your own. Over 85% of certified public accountants recommend small businesses outsource employee payroll responsibilities to professional payroll processing companies. 

Online payroll services are an even more convenient alternative. Online services provide a simple, secure way for businesses of any size to submit payroll. All it takes is the click of a button, and the work is done for you. You can even set automatic settings so that the payroll process will happen without you, if you're going on vacation. With an online system, employees are even able to access copies of their pay stubs, and necessary tax forms, so that you don't have to worry about distributing hard copies of that information. 

One payroll issue that many employers run into is difficulties paying their Canadian employees. A payroll processing company can be very helpful if you are a U.S. company with Canadian employees. You must be in Canadian compliance when paying your Canadian employees, and many companies in this situation unfortunately rely on misinformation, and end up making very costly mistakes. Hiring a company to navigate the differences between American and Canadian payroll and tax law can save you a lot of time and money, and make it much easier to hire qualified employees from Canada. 

As a small business owner, you have enough responsibilities on your plate already. Let a qualified payroll service with years of experience and know-how take the responsibility and stress of processing payroll off of your shoulders. This will allow you time you never had before to not only focus on the rest of your business responsibilities. Not only that, but the additional free time can also be spent with family and friends, which is oftentimes a luxury that many small business owners are deprived of, working long hours. Let a payroll processing company do the work for you.

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


Topics: Payroll, Small Business Payroll

5 Ways Using a Payroll Service Makes Sense

Posted by Stacey Jones


Nov 6, 2013 9:00:00 AM

5 Ways Using a Payroll Service Makes SenseMany small business owners start out handling payroll on their own. As their company grows, it becomes increasingly difficult and time consuming to keep up with payroll. By that time, the company usually has some kind of HR manager or administrator, and they often inherit the payroll responsibilities. They become a default payroll manager, regardless of whether they have the training and experience to handle the needs of a growing company. This takes away from their HR responsibilities, and puts your payroll in the hands of someone who may not be able to dedicate the necessary time to do it right.

Instead of handing off your payroll needs from one employee to the next, it makes more sense to hire a payroll service. Payroll providers have the training, experience, and knowledge to handle the payroll needs of any size company. A payroll provider lets you and your staff stay focused on the business at hand, while your payroll needs receive the attention they deserve. Here are five ways that hiring a payroll service makes sense for your company:

Counting the Minutes

Every minute you spend on payroll is a minute that’s not focused on your core business activities. As the hours add up, and you answer employee queries, and read up on the latest legislative changes, more productive pursuits are being delayed.

A payroll service deals with payroll needs every single day. They don’t have other responsibilities that consume their attention. They can handle your payroll needs quickly, efficiently, and accurately. You will be able to spend more of their time focused on growing your business.

Time is Money

By saving you time, a payroll service saves you money. They also save you money by ensuring that your payroll is handled right the first time. Mistakes in payroll can be expensive. Cutting new cheques, making back payments, and government fines can quickly add up. The easiest way to avoid all of these potential expenses is by using a payroll service provider.

Focus on Service

When someone in your company handles payroll, they can’t always give immediate attention to questions or concerns. If you have a problem, you either have to interrupt the payroll manager, or wait for them to get back to you.

With a payroll service, they’re always working on payroll. When you call with questions or concerns, that’s just another part of what they do every day. Since they handle customer queries all the time, they can have the right answer for you right away. 

Get it Right

A lot of payroll mistakes can be traced to ignorance of changing legislation. Even when the legislation doesn’t change, it can be incredibly complex. Your payroll manager may not have the time to research all of the intricacies of the law, let alone keep up with the constant changes.

A payroll service understands the laws, as well as their application. They often participate in crafting new laws, so they have a deep understanding of the issues. Keeping up with changes is part of their day-to-day routine. This makes it easy for them to avoid mistakes that can lead to fines and back payments.

Expert Guidance

As your business grows and changes, you’ll need advice on future payroll issues. It’s unlikely that your payroll manager will have the experience to help guide that growth.

A payroll service handles clients of all sizes and stages of growth. This gives them unique insights into the challenges faced by businesses. This insight can prove invaluable in helping you steer your company into the future.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Service Provider, Outsourced Payroll Service, Best Payroll Calculator, Payroll Deductions, Dependable Payroll Service, Payroll Tax Laws in Canada, Great Payroll Service Provider, Small Business Operations, Small Business Payroll

5 Reasons Businesses Dread Processing Payroll

Posted by Stacey Jones


Aug 27, 2013 10:00:00 AM

Reasons Businesses Dread Processing PayrollIt's no surprise that processing payroll is toward the bottom of the list of tasks that business owners like to do. In fact, it wouldn't be a stretch to say that most business owners dread processing payroll. On the surface, processing payroll seems like a fairly simple and straightforward business responsibility, but anyone with payroll experience knows that there are reasons to dread it. Here are five.

1. Paperwork.

There might be a few people out there who enjoy paperwork, but if you feel that there are never enough hours in the day, paperwork can be a real thorn in your side. And with payroll processing, the paperwork is endless.

From the moment you hire an employee, you have to start keeping track of paperwork for that person. Not only do you have to stay on top of deductions, taxes, and contributions for each employee every pay period, but you also need to keep accurate enough records to complete end-of-year reports for the CRA. It takes an organized person with solid systems to keep all of this paperwork straight.

2. Deductions.

It's the employer's responsibility to deduct Employment Insurance premiums, Canada Pension Plan contributions, and income taxes from the employees' paycheques. Each of these deductions has its own formula and its own rules, and the employer is responsible for correctly figuring out each amount.

The CRA has an online calculator to help employers with these calculations, but pay close attention to the disclaimers: "You assume the risk associated with using this calculator," and "The reliability of the calculations produced depends on the accuracy of the information you provide." Therefore, you can't use the online calculator as an excuse if you end up with mistakes in your deductions.

3. Remitting.

Once you've finally figured out how much to deduct from each of your employees' paycheques, it's time to face the next dreaded task: remitting the deductions to the CRA. Monthly payroll deductions are due the 15th of each month, and your remittance needs to arrive on time. If it's just a day late, you'll face a fine, which we'll talk about next.

4. Fines.

If the CRA finds that your business is not properly remitting CPP contributions, EI premiums, and income tax, your business will be fined. If this happens more than once in a calendar year, the CRA will levy an additional fine. These fines can be a huge hit to your company's bottom line as well as to your morale as an employer.

5. Changing laws and regulations.

Many small business owners find that over time they can get the hang of payroll processing. It can become part of their daily, weekly, and monthly routines. But then, as new laws are passed, the rules change, and they find themselves back at square one. Laws related to payroll processing change frequently, and it can be quite difficult for harried business owners to keep on top of all the changes.

One solution to handling these dreaded payroll processing tasks is to turn your payroll tasks over to a third-party payroll service provider like The Payroll Edge. These services are experts in the details. They know the laws and rules, and they have systems in place to keep your business running smoothly.

7 Signs It's Time to Outsource Payroll

Topics: Payroll, Employee Payroll Deductions, hire payroll service, Payroll Calculator, CRA, Payroll Deductions, Great Payroll Service Provider, CPP, EI, Employee Payroll Tax, Small Business Payroll

How to Do Small Business Payroll in Canada

Posted by Ray Gonder


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

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