- Setting up Payroll Account
- Process Payroll
- File Payroll Remittance
- Prepare and File T4, T4A
- Prepare ROE (Record of Employment)
Many of our clients are small business owners and passionate entrepreneurs who dove into their ideas head on and full speed ahead. This is an amazing mindset to have when launching, owning, and maintaining a successful small business; however, it is not the only mindset you need to take ownership of. Passion, initiative, the willingness to learn and ensuring the necessary resources are in place are all important factors when ensuring a successful launch and overall performance.
We are here to provide you with the necessary guidelines and parameters required in operating a successful and legally sound business in the province of Ontario. Whether you are a mega company with over 500 employees, or a small business with only 5 co-workers within your team, it is imperative that you establish and provide the necessary financial documentation and organize your method of reimbursement. Small Businesses with a limited number of employees still fall under the category of a functioning business in Canada, therefore the parameters are essentially quite similar.
It is not enough to simply have a vague understanding of the financial aspects of your business, but it is enough to ask for professional advice and mentorship in this area. We know that ensuring the prosperity and overall profit of your business is one of your top goals, but did you know that it is also one of our top priorities? Providing you with the most current and educated information, you can trust us to walk you through the entire process of your business’s finances - specifically that of your payroll services. This can be an exhaustive and confusing process to undertake, but we can provide you with the necessary steps and resources to make it easier than counting sheep!
Step One - Hire an Employee
The hiring process in itself can be quite the daunting task - making sure you are bringing on the right skills, character, and growth for your business can be intimidating to say the least. Setting up payroll for your business is a crucial part of owning a business.
Step Two - Gather Employee Information
Once you have hired the employee, ensure that you clearly outline the employment details and sign any outstanding forms (ie. employment contract, wage information etc.). Once the paperwork has been signed, it’s time to gather information from your employee:
- TD1 Forms (Federal and Provincial)
- Mailing Address
- SIN (Social Insurance Number)
- Date of Birth
- Banking Information
- Contact Information
Step Three - Choose Your Payment Method
There are many different apps that provide payroll and direct deposit services, but it can be difficult to know which of these softwares is best for your company. Some are easier to navigate than others, some come more highly recommended and some are more thorough. If you are struggling with choosing which option is the correct choice, contact us and we can help you decide the best fit for your business.
Step Four - Payroll Frequency
There are so many options in terms of payroll frequency. Some businesses prefer weekly, some bi-weekly, some semi-monthly and so forth. The preference for pay period can depend on numerous factors, however it is helpful to put the situation in terms of whether the employee works hourly or salary as well. Try to incorporate what is best for your employee(s) as well as what is best for your business (ie. is cash flow reduced or increased with your chosen pay period?).
Step Five - Register Your Business for Payroll
Ensure that you have registered and received your Business Number (BN). This number is provided to you by the Canada Revenue Agency (CRA) and essentially acts as a tax ID. Thankfully, you only need one BN in order to be recognized locally, provincially or federally.
If you have not registered for a BN, we would be happy to walk you and your business through this process.
Step Six - Launch Payroll
When launching payroll, keep in mind the process time from submission to release/deposit. Ensure that you create a clear payment schedule and communicate any payment delays to your employee(s).
Step Seven - Payroll Remittance
What are payroll remittances? These are the source deductions withheld from your employees pay. These include CPP, EI and Income Tax.
CPP - Canada Pension Plan
CPP is paid in two parts, one being a deducted amount from the employee, and the second a deducted amount from the business.
EI - Employment Insurance
Ei is also paid in two parts, by both the employee and the employer of the business.
Income tax is only paid by the employee.
It is imperative that businesses organize their payroll remittance properly, otherwise you are risking late payroll remittance penalties. It is also important to note that these late penalties are not tax deductible - thus they can add up fast!
- 3% of the amount owed if payment is 1-3 days late
- 5% of the amount owed if it is 4-5 days late
- 7% of the amount owed if it is 6-7 days late
- 10% of the amount owed if it is beyond seven days late
Step Eight - File T4s / T4As Each Year
What are T4As? This documents includes other income types and reports on the following:
Filing T4s and T4As can be quite a time hassle and hiring a professional to organize your bookkeeping and accounting will be a huge weight off your shoulders. Preparing T4s and T4As is a job requiring ample attention to detail. If that attention is not given, the error penalties can be extensive.
Step Nine - Prepare ROE (Record of Employment)
What is ROE? As an employer, you may be required to issue a Record of Employment to one of your employees. This could be because of an interruption of work or termination of employment.
Included in an ROE are specific details, such as the number of hours/years your employee worked within a specific time period.
The process of preparing an ROE can be very tedious and daunting, but we can take care of this for you, so that you can focus primarily on the growth of your business.
Contact Us Below To Learn More About Our Payroll Services: