If you are thinking of…or have already hired your employee, you might be thinking did I do this right? Payroll does not have to be complicated if you have the correct software or the correct bookkeeper/accountant.
A Business Number
Your first step should be to register your business for payroll. If you are incorporated, you already have a business number (a nine-digit number). You can find that easily on any of your tax return. However, if you are a sole proprietor, you may or may not have a business number. If you are registered for GST, it is the nine digits prior to RT0001 listed on your GST return. If none of this apply, you need to apply for a business number here or call 1-800-959-5525.
After you have a business number, you can then apply to open a payroll account online here or by phone at 1-800-959-5525.
Your next step is to collect your employees’ information. It is highly recommended to have all of their information prior to running your payroll because if some of this information is lacking at the end of the year, it may get you into some hot water with CRA…and no one wants that.
The bare bones minimum requirements are:
-Get your employees to fill out theFederaland Provincial TD1 forms -Social Insurance Number -Date of Birth -Mailing address -A signed contract
Source Deductions and Paystubs
You are required by law to provide each employee with a pay statement (aka paystub) at the end of every pay period. We recommend paying for a good software (or get a pay a great payroll provider) so that your payroll is done correctly. If you offer benefits, I would strongly suggest soliciting professional advice because there are tax consequences to some benefits.
There is a little gem on CRA’s website that allows you to double-check your payroll calculations.
Equally important is to pay CRA on time – most often, payroll remittances are due on the 15th of every month for the month prior (e.g. January’s remittances are due February 15th). However, you may not be required to remit on a monthly basis. The bad news is that you will owe some penalties if you pay late. Click here for more information on remittance frequency and due dates.
We are happy to offer free one-hour consultations, so if you have more questions regarding payroll, please feel free to contact us.