Are You Confident (or a teeny bit uncertain) with Payroll Processing?
There are many stressors that come with running a small business, payroll being one of the biggest. Keeping up with the Ministry of Labour’s Employment Standards is very important. Understanding employer/employee rights is key to helping you run a successful business and build a healthy work environment.
It is considered best practice to create a written job description when hiring an employee. The description can be used to clarify the details of company policies regarding vacation pay, statutory holiday pay, time off and even sick days. This will help to avoid any future miscommunication.
There is more to running payroll than simply inputting hours. Here are a few things to keep in mind when preparing payroll for your company.
- Do you know all the paid statutory holidays in a given year? Do you know when an employee is entitled to stat pay and when they are not? Statutory pay is based on the regular wages earned in the four weeks prior to the public holiday.
- Do you know the difference between accruing vacation pay or paying it out each pay period? Employees are entitled to 2 weeks of vacation time after a year of working with your company. Vacation pay is calculated based on 4% of gross wages earned that year.
- What about taxable benefits? Are you aware of taxable allowances or benefits that employees may be entitled to, or which codes to use for taxable benefits when processing T4’s? Here’s a great starting point related to Gifts, Awards and Social Events.
- Does your current payroll system update CPP/EI/Income Tax rates on regular basis? Do you know the current rates? It is important that your payroll software be updated in December and June to ensure that you are compliant with CRA regulations. QuickBooks is the software of choice for us at The Art of Accounting. We have been QuickBooks ProAdvisors since 2008 and delight in showing clients how to leverage the power of Canada’s #1 selling small business software so they can be better and do better.
- Are you confident that your payroll remittances are accurate each month? Do you remit source deductions on-line and on time? Monthly source deductions are due the 15th of the following month. See important remittance dates for businesses.
- Are you confident in preparing T4’s at the end of the year? T4’s are due to CRA no later than February 28th of the following year. Are you certain that the correct amount of CPP and EI has been submitted to CRA within the year?