Once you hire an employee, you will need their Social Insurance Number (SIN) and have them fill out the federal and provincial TD1 forms. Of course, your payroll system can only be set up once you have a registered number from the CRA. The CRA will need to be sent your recorded tax collection.
The CRA also determines how much tax to collect from employees based on their classification. For example, you’ll collect different amounts of tax from full-time employees versus a contractor.
How to Avoid Payroll Errors
It is crucial to avoid any potential remittance errors on your payroll accounting in order to prevent issues from sprouting up. Calculation errors could easily lead the CRA to penalize your business.
Deductions need to be collected every pay period. This means that each employee’s pay stubs will need clearly indicated deductions from their individual income source. If any of your employees earns a base salary as well as commission, you will need to indicate the deductions you’ve made from each source.
Account for Exceptions
It’s important to be aware of the CPP requirements when doing your payroll accounting. Employees under the age of 18 aren’t eligible for CPP. The same goes for employees over the age of 70. You may also need to factor in possible exceptions with regard to employment insurance.
We are an Edmonton-based accounting firm that offers expert payroll accounting services to all kinds of businesses. Our comprehensive payroll services include setting up payroll structure, generating pay stubs, providing monthly Source Deduction report for CRA payment, T4 slip printing, payroll audit, WCB filing, and more.
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