Payroll – What are your options?
It’s a pretty big step to start hiring staff. I equate having employees to having kids. You have a lot of responsibilities to meet and you will invest time and effort. However, good employees will help your business grow and be a representative of your business.
Paying them properly is important, and I’m talking about more than just fair compensation. You need to follow all CRA guidelines for payroll. However, this can be hard to navigate alone if it is your first time jumping into having employees.
One way to cover payroll compliance is to outsource it for your business. Even if you don’t need a full-time payroll administrator, you have many other options available to you.
Most bookkeepers have the knowledge to run a payroll with a good understanding of CRA compliance and how to calculate payroll deductions. They can ensure that vacation pay, statutory holidays, taxable and non-taxable benefits are all calculated properly. They will also take care of less frequent tasks, such as T4s and ROEs, eliminating the need for an in-house payroll administrator.
Bookkeepers usually have access to payroll systems through their desktop accounting software which enables them to provide your employees paystubs with year to date amounts. This is a cost-effective option for companies with 20 or less employees.
Your bookkeeper may not be able to pay the employees directly unless you also use a third party payroll company. They would provide you with the numbers each payroll and then you would be responsible for issuing the payment to the employee.
TelPay is a service that small businesses to submit payroll and make other payments electronically instead of writing cheques. It has the capability to integrate with QuickBooks and Sage, making the processing of payroll very easy to do. One downside is that TelPay does not submit paystubs. It is used primarily for automated transfer of funds. Paystubs would still need to be created and payroll to be calculated first and then the transfer of the funds from the businesses bank account to the employee’s bank account happens.
It is inexpensive and takes the pain out of getting your employees paid on time.
Third Party Payroll Agencies
Third party payroll agencies will take care of your source deduction calculations, submit the payroll source deductions on your behalf to the CRA, pay your employees by direct payment to their bank accounts, provide the paystubs and also complete T4’s at the end of the year and take care of any ROE’s that need to be done.
In speaking with a representative are Ceridian, she advised me that they can also provide clients with job costing. This is a huge benefit when you are tracking expenses by job. This is a relatively low cost solution to provide your business with piece of mind.
There is still a need for you, the business owner, to enter the hours into their system. They have a great online system that you can access anytime to do the entry of hours. You will also need to know how to calculate statutory holidays.
The last option for a small business is to access the CRA Payroll Calculator. I use this as a last option because it can be time consuming, depending on how many employees you have, and it does not provide any of the benefits listed in the other examples. The site will not provide you with year-to-date amounts for your employees, it will not total up your monthly source deductions automatically and it will not give you the ability to pay your employees automatically. You will have to ensure that you are aware of the payroll details of each employee.
The advantage of using it is that it’s free and you can still ensure that you are calculating source deductions correctly. It’s a great option when you are getting started. It also provides you with a link to an online tool to calculate automobile benefits for employees.
Managing your payroll doesn’t have to take all of your time as a business owner. Invest in the right option to outsource these tasks to free up your valuable time to do the things that will help you grow your business!