Everything you need to know about payroll in Canada

Are you ready to hire your first employee, or to start providing benefits and salary to someone who started out as a contractor? Taking care of your payroll correctly from the beginning will save you a lot of headache later on.

First you need to get your business number from the CRA. This allows you to remit the necessary deductions, including income tax, employment insurance, and the Canada Pension Plan (CPP).

You'll also now be able to access your online payroll account for ease of use.

How often do you want to pay your employees?

Keeping a consistent schedule is the simplest way to keep both your employees and bookkeeper happy. The most common frequency of payment is biweekly, although some opt to do monthly or semi-monthly.

When you're selecting your payroll schedule, consider your cashflow and select an option that works best for both you and your team.

Payroll Processing

Now that you've chosen a schedule, it's time to get your money from your account into your employees, with the proper deductions and contributions. This is not a task to be taken lightly -- there can be legal implications for mistakes and can cause employee dissatisfaction. Also consider whether or not your employees will be sharing costs for things like benefits, which are taxable deductions.

Companies like Onyx Accounting can take care of all aspects of payroll processing for you, handling more than just paying your employees. We'll equip you with payroll journals, statistics, T4s, year-end reports, and ROEs - everything you need to handle your payroll in a timely manner and most importantly, with accuracy.

What's a taxable benefit?

Since we mentioned it, let's dive in a little deeper on this. A taxable benefit is anything that your company provides to an employee in addition to their wages. This can be a vehicle, a cell phone allowance, a health spending account, and more.

Determining which of these you will offer to your employees can help you attract better talent and retain your best people.

Remitting Deductions to the CRA

In most cases, you will have to remit deductions so that the CRA receives them on or before the month's 15th day of the month after you made your deductions. We will help you calculate your deductions so you can do this efficiently and accurately with no paper or printing required.

As you become more established, the CRA may choose to move you into a new classification as a quarterly or accelerated remitter, meaning less paperwork on your end.

T4 Slips and Information Returns

Once a year, your obligation as an employer involves filing a T4 slip for all employees and completing the T4 summary form. You must file the T4 information return and provide the T4 slips to your employees.

Keep Every Record

As always, it's important to keep a detailed record of all your payroll information, remittances, and employee records either at your place of business or primary residence. We advise keeping all paperwork for a minimum of seven years when it comes to anything to do with the CRA.

Happy bookkeeping! Reach out to us with any questions you may have, or to get a quote to have Onyx help you manage your bookkeeping and payroll. Send us a note at info@onyxaccounting.ca.