Preparation of payroll and payment of government taxes requires time and expertise to keep employees happy and stay in compliance with labour laws, mandatory taxes and more.
An experienced bookkeeper will look after all aspects of your payroll preparation and government compliance. From accurate raw information (hours worked, pay rates, etc) the payroll for your employees is prepared including the government filings for employee tax deductions, CPP (Canada Pension Plan), EI (Employment Insurance), WorkSafe BC (workers compensation) and other deductions such as payroll advances or union dues.
Key Steps in Payroll Preparation and Bookkeeping
These are the important steps in setting up and managing your payroll.
- Determine the pay period for your employees – weekly, semi-monthly or monthly.
- Determine the pay method – salary, hourly and/or commissions
- Register with CRA (Canada Revenue Agency)
- Get TD1 forms completed by each employee which determines their deductions from their pay
- Calculate the gross pay (pay before deductions)
- Calculate the deductions for tax, CPP and EI
- Pay the employees – cheques or direct deposit
- Remit the payroll taxes – employee and employer portions
- At the end of the year, report each employees’ earnings and deductions on appropriate T4 or T4A
- File returns for Workers Compensation
There are affordable software options such as Quick Books or Sage to process your payroll and compile the payroll tax returns.
Government Compliance is Vital
Businesses can remit payroll deductions using paper remittance vouchers or electronically.
We recommend electronic filings via your online My Business Account. That way you can see your transactions and balances online.
There are also options to pay using:
- My Payment – a service provided by CRA that allows you to make payments directly to CRA using your bank debit card. For credit card payments, payment is made using Pay by credit card or PayPal.
- Internet Banking
- At your bank but must have an original remittance voucher
- Mailing a cheque or money order
Software and Services to the Rescue
Accounting software and/or payroll services offer many features and conveniences from payroll calculations to employee payment and tax filings.
These services such as ADP are cost effective come with time saving features including paying your employees by direct deposit, auto payment of the payroll deductions to the CRA (Canada Revenue Agency), filing of T4s and preparation of ROEs (ROE is the form, electronic or paper, that employers complete for employees receiving insurable earnings who stop working and experience an interruption of earnings.)
The goal of your payroll system should be to get your employees and government filings paid accurately and on time. All the while keeping the business owner free to run their business.
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