The Canadian Business Owners Guide to Setting Up Payroll

Author profile picture
Jamie Fryar

Setting up payroll for your business for the first time can be quite daunting, and the penalties of failing to do it right could be financially and legally costly.

On top of all that, a cursory Google search wouldn't help much either. 
It is for this reason that we have prepared this detailed business owners' guide to set up Payroll.

We have done our best to anticipate the specific hurdles you might encounter as you go about setting up payroll for your business.

Let's start with the basics.


What is Canadian payroll?

Payroll refers to the aggregated compensation structure and procedure that your organization follows when paying employees for the work they have done for the business. 


To pay your employees, you need to have specific systems and protocols in place.
For instance, who are the employees? How much does each of them earn? How often are they to be paid? All these and more are the business of Payroll.

Canadian payroll means that you are going to be dealing directly with the Canadian Revenue Agency, as opposed to any other govermnent body.


How do I go about setting up payroll for the first time?

Setting up payroll can be long, tedious and quite costly if you get it wrong.
It can also be very inconvenient for your employees if they don't get their pay on time or the right amount in the right account.

Studies have found that 6% – 13% of employees have payroll related issues in every pay period, let's make sure you aren't part of that demographic!

There are five easy steps to follow when setting up payroll and compensating employees.

  1. How to open a payroll account with the Canadian Revenue Authority (CRA).
  2. How set your Employees up on payroll and what you need from them (SIN and TD1 forms).
  3. How to calculate and setup payroll remittances.
  4. How to calculate and set up payroll deductions.
  5. What software to use to automate the process.



1 - Setting up payroll with the CRA in 2 steps.

  1. If you already have a business number (BN), then this is relatively straightforward.
    All you have to do is add a payroll deductions account to your existing program accounts.
  2. If you don't have a BN, then you need to get one first. You can do this in a few different ways. These include;


Three ways to get a BN or business number.

  1. Register online via the Business Registration Online service (BRO)
  2. Call the CRA directly at 1-800-959-5525 for further instructions.
  3. Mail or fax Form RC1, Request for a Business Number, to your nearest Tax Service Office (TSO) or Tax Center.


Once you have your BN, you can now use the BRO service to register for the various program accounts relevant to you, including the payroll deductions account.

However, to register for the payroll deductions account, you will need to provide critical information on your business and employees. This required information is the next question we answer below.




How to set up your payroll account through BRO.

  1. The date that the employees received their first wages. You can leave this field blank if you do not know.
  2. The months covered for Payroll of the employees' wages
  3. The type of payroll period. Employers prefer two main types; once every two weeks and twice a month. The choice between which one to choose depends on whether you have either hourly or salary employees.
  4. The number of employees in your organization
  5. The payroll service you are using if any
  6. The country of the parent company if your business has foreign ownership
  7. The name of the franchisor (if any)
  8. The country of origin of the franchisor (if any)

 

You're all set! 
Once you are done providing this information accurately, you can register your Payroll program account. Now you may hire employees and pay them legally through the law.


 

2 -Setting up payroll for employees.

Once you hire some employees, you will need to set each of them individually on your payroll account.

To do this, you will need some information from each of them individually and make some policy decisions regarding how you will pay your employees. 

Below is how to go about registering employees on your company's payroll account.

Get their personal information.

When hiring new employees to set them up on the payroll account, you need to get some information from them as part of the onboarding process. information you need to get includes;

  • Federal and Provincial TD1 forms that have been filled out and signed.
  • A TD1 form is a form that is used to determine the amount of tax that is to be deducted from an individual’s employment income or other revenues. Here is a list of the various forms required for the different provinces.
  • A mailing address as proof of residence
  • Social Insurance Number (SIN)
  • Date of birth
  • Bank account information in case of a direct deposit
  • The contact information like email and phone number
  • Employment terms like compensation and contract duration

Decide on the pay period.

To register your employee on your payroll account, you need to decide the employee's pay period. Most companies have a standard pay period policy that is not unique for every employee. If you already have a pay period policy, then you can use that.

However, if you don't, then now is as good a time as any to decide your business's pay period frequency. There are two main pay periods used by most startups and small businesses in Canada which are;

  • Bi-weekly (every two weeks)
  • Semi-monthly (twice a month)

While the two pay period types seem very similar to each other, they differ somewhat. The best way to decide which one to use is to figure out whether you will be paying employees on a monthly salary or per hour of work. If you are paying per hour, then the bi-weekly format is the best for you. The twice a month format is better for employers paying on a monthly salary.

After you have gathered the relevant information from your new hire and decided which pay period you are using for them, you can now complete the new employee form on your payroll account.


Set up payroll direct deposit.

Many employees opt for the direct deposit option. With direct deposit, employees get their payments deposited directly into their accounts, minus the deductions that were supposed to be withheld and remitted. Direct deposit is fast, convenient and entirely secure.


How to qualify for direct deposit.

To qualify for a direct deposit from the CRA, you need to have a Canadian bank account first of all. Beyond that, you need to be a recipient of one of the following payments from the CRA to qualify;

  • Income tax refund
  • Canada child benefit or any provincial child benefit substitutes
  • Canada workers benefit
  • Goods and services tax/ harmonized sales tax credit or a similar provincial payment
  • Tax overpayment or rebate

If you qualify for a direct deposit, you can sign up in one of two main ways. You can either sign up online on the CRA portal or sign up through a financial institution.


Online payroll signup option.

As an individual, your employees can sign up individually via MyAccount. My account is a secure portal that lets you view your personal income tax and benefit information and manage all your tax affairs conveniently online.

Therefore if some of your employees don’t already have MyAccount set up, you should encourage them to do that before they can register for a direct deposit online.

You can also sign up online via the mobile application; MyCRA to conveniently apply for and edit your direct deposit applications.


Offline signup option.

You can sign up for a direct deposit using any one of the many financial institutions that can now sign up people. You need to give your consent to the financial institution to access your information, and once that happens, your CRA direct deposit information will be updated the next day. You should visit your financial institution website for more information on how they could help you sign up for a direct deposit.


How to sign up for direct deposit over the phone.

You can also sign up for direct deposit via mobile phone. You can call CRA at 1-800-959-8281. Before you call, please make sure you have the following;

  • Your social insurance number
  • Full name, current address, including the postal code
  • Date of birth
  • Most recent income tax and benefit return information about the most recent payments you received from CRA
  • Your bank and account details


3 - How do I set up payroll remittances?

To set up payroll remittances for workers compensation for your business, you should follow these steps, which were taken directly from the support website;


Create a vendor.

  1. From the home window, select Vendors to bring up the Vendor list.
  2. If it does not exist, it must first be created. Follow Article ID 44123: How do I create a vendor record?
  3. Using Sage Simply Accounting 2011 or prior versions: In the Vendor Records Window, put a checkmark in the box beside Payroll Authority.
  4. Select Save & Close.


Set up linked accounts.

Part 1: Setting up Remittance

  1. Select Setup, Settings, Payroll, then Remittance.
  2. Link the EI, CPP and Tax to the Receiver General for Canada vendor by clicking on the magnifying icon (or double-click in the empty box). This will display the Select vendor screen.
  3. Select the Receiver General for Canada and click Select.
  4. Enter the remitting frequency and the last day of your next remitting period.
  5. Select the OK button to save

Part 2: Ensure the correct accounts are being used (Linked accounts for the remittance accounts)

  1. To confirm the amounts that need to be remitted, check the GL report through Reports, Financials, then General Ledger Report.
  2. Go to Setup, Settings, Payroll, Linked accounts; Taxes.
  3. Confirm the correct accounts are linked to every field
  4. Select OK

  

 

4 -How do I set up payroll deductions?

To set up payroll deductions, you have to take inventory of all the benefits and rewards that you are offering your employees, making sure to include the tax-deductible ones. There is a list of all the taxable benefits and allowances here that you can use to identify the various benefits and allowances.

Once you have all the taxable benefits and allowances accounted for, you can then make payroll deductions.

There are three main government program deductions that employers have to make. These programs include the following;

  1. Income Tax: You need to use the provincial tables to find the amount deductible from each province under income tax. There is an easy way to calculate the income tax, and that is by using CRA’s online payroll deductions calculator.
  2. Canadian Pension Plan: Employers have to deduct CPP if an employee is between 18 and 69, has a pensionable job and isn't disabled. You should visit CRA's Canada Pension Plan page to find more information on contribution rates, exemptions, and other useful information.
  3. Employment Insurance Premiums: Insurance premiums are deducted from each dollar of insurable pay that your employees earn. As the employer, you are also required to contribute 1.4 times the value being withheld from the employees, so you need to make sure those funds are also available. To determine the EI deductions for a given year, you should refer to the CRA's chart of EI premium rates and maximums.

 

5 -Should I use a payroll system or software?

Now that you have seen the level of detail and the amount of work required to set up Payroll for your company, you are in abetter placed to decide whether to use payroll software or to do it manually by yourself.

We would advise you to use a payroll system to manage your employee payroll because it is easy to make a costly mistake when doing payroll manually and iut is time consuming and inconvenient for both employers and employees.

There are many more benefits offered by payroll software beyond just payroll management.

Companies like Push offer a myriad of services like time tracking, hiring and onboarding, scheduling, and payroll, and can save you hundreds of hours a week by using an integrated software solution.


We hope this guide was helpful on your journey as a business owner! See you next time.

setting up payroll


The Canadian Business Owners Guide to Setting Up Payroll

Author profile picture
Jamie Fryar

Setting up payroll for your business for the first time can be quite daunting, and the penalties of failing to do it right could be financially and legally costly.

On top of all that, a cursory Google search wouldn't help much either. 
It is for this reason that we have prepared this detailed business owners' guide to set up Payroll.

We have done our best to anticipate the specific hurdles you might encounter as you go about setting up payroll for your business.

Let's start with the basics.


What is Canadian payroll?

Payroll refers to the aggregated compensation structure and procedure that your organization follows when paying employees for the work they have done for the business. 


To pay your employees, you need to have specific systems and protocols in place.
For instance, who are the employees? How much does each of them earn? How often are they to be paid? All these and more are the business of Payroll.

Canadian payroll means that you are going to be dealing directly with the Canadian Revenue Agency, as opposed to any other govermnent body.


How do I go about setting up payroll for the first time?

Setting up payroll can be long, tedious and quite costly if you get it wrong.
It can also be very inconvenient for your employees if they don't get their pay on time or the right amount in the right account.

Studies have found that 6% – 13% of employees have payroll related issues in every pay period, let's make sure you aren't part of that demographic!

There are five easy steps to follow when setting up payroll and compensating employees.

  1. How to open a payroll account with the Canadian Revenue Authority (CRA).
  2. How set your Employees up on payroll and what you need from them (SIN and TD1 forms).
  3. How to calculate and setup payroll remittances.
  4. How to calculate and set up payroll deductions.
  5. What software to use to automate the process.



1 - Setting up payroll with the CRA in 2 steps.

  1. If you already have a business number (BN), then this is relatively straightforward.
    All you have to do is add a payroll deductions account to your existing program accounts.
  2. If you don't have a BN, then you need to get one first. You can do this in a few different ways. These include;


Three ways to get a BN or business number.

  1. Register online via the Business Registration Online service (BRO)
  2. Call the CRA directly at 1-800-959-5525 for further instructions.
  3. Mail or fax Form RC1, Request for a Business Number, to your nearest Tax Service Office (TSO) or Tax Center.


Once you have your BN, you can now use the BRO service to register for the various program accounts relevant to you, including the payroll deductions account.

However, to register for the payroll deductions account, you will need to provide critical information on your business and employees. This required information is the next question we answer below.




How to set up your payroll account through BRO.

  1. The date that the employees received their first wages. You can leave this field blank if you do not know.
  2. The months covered for Payroll of the employees' wages
  3. The type of payroll period. Employers prefer two main types; once every two weeks and twice a month. The choice between which one to choose depends on whether you have either hourly or salary employees.
  4. The number of employees in your organization
  5. The payroll service you are using if any
  6. The country of the parent company if your business has foreign ownership
  7. The name of the franchisor (if any)
  8. The country of origin of the franchisor (if any)

 

You're all set! 
Once you are done providing this information accurately, you can register your Payroll program account. Now you may hire employees and pay them legally through the law.


 

2 -Setting up payroll for employees.

Once you hire some employees, you will need to set each of them individually on your payroll account.

To do this, you will need some information from each of them individually and make some policy decisions regarding how you will pay your employees. 

Below is how to go about registering employees on your company's payroll account.

Get their personal information.

When hiring new employees to set them up on the payroll account, you need to get some information from them as part of the onboarding process. information you need to get includes;

  • Federal and Provincial TD1 forms that have been filled out and signed.
  • A TD1 form is a form that is used to determine the amount of tax that is to be deducted from an individual’s employment income or other revenues. Here is a list of the various forms required for the different provinces.
  • A mailing address as proof of residence
  • Social Insurance Number (SIN)
  • Date of birth
  • Bank account information in case of a direct deposit
  • The contact information like email and phone number
  • Employment terms like compensation and contract duration

Decide on the pay period.

To register your employee on your payroll account, you need to decide the employee's pay period. Most companies have a standard pay period policy that is not unique for every employee. If you already have a pay period policy, then you can use that.

However, if you don't, then now is as good a time as any to decide your business's pay period frequency. There are two main pay periods used by most startups and small businesses in Canada which are;

  • Bi-weekly (every two weeks)
  • Semi-monthly (twice a month)

While the two pay period types seem very similar to each other, they differ somewhat. The best way to decide which one to use is to figure out whether you will be paying employees on a monthly salary or per hour of work. If you are paying per hour, then the bi-weekly format is the best for you. The twice a month format is better for employers paying on a monthly salary.

After you have gathered the relevant information from your new hire and decided which pay period you are using for them, you can now complete the new employee form on your payroll account.


Set up payroll direct deposit.

Many employees opt for the direct deposit option. With direct deposit, employees get their payments deposited directly into their accounts, minus the deductions that were supposed to be withheld and remitted. Direct deposit is fast, convenient and entirely secure.


How to qualify for direct deposit.

To qualify for a direct deposit from the CRA, you need to have a Canadian bank account first of all. Beyond that, you need to be a recipient of one of the following payments from the CRA to qualify;

  • Income tax refund
  • Canada child benefit or any provincial child benefit substitutes
  • Canada workers benefit
  • Goods and services tax/ harmonized sales tax credit or a similar provincial payment
  • Tax overpayment or rebate

If you qualify for a direct deposit, you can sign up in one of two main ways. You can either sign up online on the CRA portal or sign up through a financial institution.


Online payroll signup option.

As an individual, your employees can sign up individually via MyAccount. My account is a secure portal that lets you view your personal income tax and benefit information and manage all your tax affairs conveniently online.

Therefore if some of your employees don’t already have MyAccount set up, you should encourage them to do that before they can register for a direct deposit online.

You can also sign up online via the mobile application; MyCRA to conveniently apply for and edit your direct deposit applications.


Offline signup option.

You can sign up for a direct deposit using any one of the many financial institutions that can now sign up people. You need to give your consent to the financial institution to access your information, and once that happens, your CRA direct deposit information will be updated the next day. You should visit your financial institution website for more information on how they could help you sign up for a direct deposit.


How to sign up for direct deposit over the phone.

You can also sign up for direct deposit via mobile phone. You can call CRA at 1-800-959-8281. Before you call, please make sure you have the following;

  • Your social insurance number
  • Full name, current address, including the postal code
  • Date of birth
  • Most recent income tax and benefit return information about the most recent payments you received from CRA
  • Your bank and account details


3 - How do I set up payroll remittances?

To set up payroll remittances for workers compensation for your business, you should follow these steps, which were taken directly from the support website;


Create a vendor.

  1. From the home window, select Vendors to bring up the Vendor list.
  2. If it does not exist, it must first be created. Follow Article ID 44123: How do I create a vendor record?
  3. Using Sage Simply Accounting 2011 or prior versions: In the Vendor Records Window, put a checkmark in the box beside Payroll Authority.
  4. Select Save & Close.


Set up linked accounts.

Part 1: Setting up Remittance

  1. Select Setup, Settings, Payroll, then Remittance.
  2. Link the EI, CPP and Tax to the Receiver General for Canada vendor by clicking on the magnifying icon (or double-click in the empty box). This will display the Select vendor screen.
  3. Select the Receiver General for Canada and click Select.
  4. Enter the remitting frequency and the last day of your next remitting period.
  5. Select the OK button to save

Part 2: Ensure the correct accounts are being used (Linked accounts for the remittance accounts)

  1. To confirm the amounts that need to be remitted, check the GL report through Reports, Financials, then General Ledger Report.
  2. Go to Setup, Settings, Payroll, Linked accounts; Taxes.
  3. Confirm the correct accounts are linked to every field
  4. Select OK

  

 

4 -How do I set up payroll deductions?

To set up payroll deductions, you have to take inventory of all the benefits and rewards that you are offering your employees, making sure to include the tax-deductible ones. There is a list of all the taxable benefits and allowances here that you can use to identify the various benefits and allowances.

Once you have all the taxable benefits and allowances accounted for, you can then make payroll deductions.

There are three main government program deductions that employers have to make. These programs include the following;

  1. Income Tax: You need to use the provincial tables to find the amount deductible from each province under income tax. There is an easy way to calculate the income tax, and that is by using CRA’s online payroll deductions calculator.
  2. Canadian Pension Plan: Employers have to deduct CPP if an employee is between 18 and 69, has a pensionable job and isn't disabled. You should visit CRA's Canada Pension Plan page to find more information on contribution rates, exemptions, and other useful information.
  3. Employment Insurance Premiums: Insurance premiums are deducted from each dollar of insurable pay that your employees earn. As the employer, you are also required to contribute 1.4 times the value being withheld from the employees, so you need to make sure those funds are also available. To determine the EI deductions for a given year, you should refer to the CRA's chart of EI premium rates and maximums.

 

5 -Should I use a payroll system or software?

Now that you have seen the level of detail and the amount of work required to set up Payroll for your company, you are in abetter placed to decide whether to use payroll software or to do it manually by yourself.

We would advise you to use a payroll system to manage your employee payroll because it is easy to make a costly mistake when doing payroll manually and iut is time consuming and inconvenient for both employers and employees.

There are many more benefits offered by payroll software beyond just payroll management.

Companies like Push offer a myriad of services like time tracking, hiring and onboarding, scheduling, and payroll, and can save you hundreds of hours a week by using an integrated software solution.


We hope this guide was helpful on your journey as a business owner! See you next time.

setting up payroll


Table of content

Setting up payroll for your business for the first time can be quite daunting, and the penalties of failing to do it right could be financially and legally costly.

On top of all that, a cursory Google search wouldn't help much either. 
It is for this reason that we have prepared this detailed business owners' guide to set up Payroll.

We have done our best to anticipate the specific hurdles you might encounter as you go about setting up payroll for your business.

Let's start with the basics.


What is Canadian payroll?

Payroll refers to the aggregated compensation structure and procedure that your organization follows when paying employees for the work they have done for the business. 


To pay your employees, you need to have specific systems and protocols in place.
For instance, who are the employees? How much does each of them earn? How often are they to be paid? All these and more are the business of Payroll.

Canadian payroll means that you are going to be dealing directly with the Canadian Revenue Agency, as opposed to any other govermnent body.


How do I go about setting up payroll for the first time?

Setting up payroll can be long, tedious and quite costly if you get it wrong.
It can also be very inconvenient for your employees if they don't get their pay on time or the right amount in the right account.

Studies have found that 6% – 13% of employees have payroll related issues in every pay period, let's make sure you aren't part of that demographic!

There are five easy steps to follow when setting up payroll and compensating employees.

  1. How to open a payroll account with the Canadian Revenue Authority (CRA).
  2. How set your Employees up on payroll and what you need from them (SIN and TD1 forms).
  3. How to calculate and setup payroll remittances.
  4. How to calculate and set up payroll deductions.
  5. What software to use to automate the process.



1 - Setting up payroll with the CRA in 2 steps.

  1. If you already have a business number (BN), then this is relatively straightforward.
    All you have to do is add a payroll deductions account to your existing program accounts.
  2. If you don't have a BN, then you need to get one first. You can do this in a few different ways. These include;


Three ways to get a BN or business number.

  1. Register online via the Business Registration Online service (BRO)
  2. Call the CRA directly at 1-800-959-5525 for further instructions.
  3. Mail or fax Form RC1, Request for a Business Number, to your nearest Tax Service Office (TSO) or Tax Center.


Once you have your BN, you can now use the BRO service to register for the various program accounts relevant to you, including the payroll deductions account.

However, to register for the payroll deductions account, you will need to provide critical information on your business and employees. This required information is the next question we answer below.




How to set up your payroll account through BRO.

  1. The date that the employees received their first wages. You can leave this field blank if you do not know.
  2. The months covered for Payroll of the employees' wages
  3. The type of payroll period. Employers prefer two main types; once every two weeks and twice a month. The choice between which one to choose depends on whether you have either hourly or salary employees.
  4. The number of employees in your organization
  5. The payroll service you are using if any
  6. The country of the parent company if your business has foreign ownership
  7. The name of the franchisor (if any)
  8. The country of origin of the franchisor (if any)

 

You're all set! 
Once you are done providing this information accurately, you can register your Payroll program account. Now you may hire employees and pay them legally through the law.


 

2 -Setting up payroll for employees.

Once you hire some employees, you will need to set each of them individually on your payroll account.

To do this, you will need some information from each of them individually and make some policy decisions regarding how you will pay your employees. 

Below is how to go about registering employees on your company's payroll account.

Get their personal information.

When hiring new employees to set them up on the payroll account, you need to get some information from them as part of the onboarding process. information you need to get includes;

  • Federal and Provincial TD1 forms that have been filled out and signed.
  • A TD1 form is a form that is used to determine the amount of tax that is to be deducted from an individual’s employment income or other revenues. Here is a list of the various forms required for the different provinces.
  • A mailing address as proof of residence
  • Social Insurance Number (SIN)
  • Date of birth
  • Bank account information in case of a direct deposit
  • The contact information like email and phone number
  • Employment terms like compensation and contract duration

Decide on the pay period.

To register your employee on your payroll account, you need to decide the employee's pay period. Most companies have a standard pay period policy that is not unique for every employee. If you already have a pay period policy, then you can use that.

However, if you don't, then now is as good a time as any to decide your business's pay period frequency. There are two main pay periods used by most startups and small businesses in Canada which are;

  • Bi-weekly (every two weeks)
  • Semi-monthly (twice a month)

While the two pay period types seem very similar to each other, they differ somewhat. The best way to decide which one to use is to figure out whether you will be paying employees on a monthly salary or per hour of work. If you are paying per hour, then the bi-weekly format is the best for you. The twice a month format is better for employers paying on a monthly salary.

After you have gathered the relevant information from your new hire and decided which pay period you are using for them, you can now complete the new employee form on your payroll account.


Set up payroll direct deposit.

Many employees opt for the direct deposit option. With direct deposit, employees get their payments deposited directly into their accounts, minus the deductions that were supposed to be withheld and remitted. Direct deposit is fast, convenient and entirely secure.


How to qualify for direct deposit.

To qualify for a direct deposit from the CRA, you need to have a Canadian bank account first of all. Beyond that, you need to be a recipient of one of the following payments from the CRA to qualify;

  • Income tax refund
  • Canada child benefit or any provincial child benefit substitutes
  • Canada workers benefit
  • Goods and services tax/ harmonized sales tax credit or a similar provincial payment
  • Tax overpayment or rebate

If you qualify for a direct deposit, you can sign up in one of two main ways. You can either sign up online on the CRA portal or sign up through a financial institution.


Online payroll signup option.

As an individual, your employees can sign up individually via MyAccount. My account is a secure portal that lets you view your personal income tax and benefit information and manage all your tax affairs conveniently online.

Therefore if some of your employees don’t already have MyAccount set up, you should encourage them to do that before they can register for a direct deposit online.

You can also sign up online via the mobile application; MyCRA to conveniently apply for and edit your direct deposit applications.


Offline signup option.

You can sign up for a direct deposit using any one of the many financial institutions that can now sign up people. You need to give your consent to the financial institution to access your information, and once that happens, your CRA direct deposit information will be updated the next day. You should visit your financial institution website for more information on how they could help you sign up for a direct deposit.


How to sign up for direct deposit over the phone.

You can also sign up for direct deposit via mobile phone. You can call CRA at 1-800-959-8281. Before you call, please make sure you have the following;

  • Your social insurance number
  • Full name, current address, including the postal code
  • Date of birth
  • Most recent income tax and benefit return information about the most recent payments you received from CRA
  • Your bank and account details


3 - How do I set up payroll remittances?

To set up payroll remittances for workers compensation for your business, you should follow these steps, which were taken directly from the support website;


Create a vendor.

  1. From the home window, select Vendors to bring up the Vendor list.
  2. If it does not exist, it must first be created. Follow Article ID 44123: How do I create a vendor record?
  3. Using Sage Simply Accounting 2011 or prior versions: In the Vendor Records Window, put a checkmark in the box beside Payroll Authority.
  4. Select Save & Close.


Set up linked accounts.

Part 1: Setting up Remittance

  1. Select Setup, Settings, Payroll, then Remittance.
  2. Link the EI, CPP and Tax to the Receiver General for Canada vendor by clicking on the magnifying icon (or double-click in the empty box). This will display the Select vendor screen.
  3. Select the Receiver General for Canada and click Select.
  4. Enter the remitting frequency and the last day of your next remitting period.
  5. Select the OK button to save

Part 2: Ensure the correct accounts are being used (Linked accounts for the remittance accounts)

  1. To confirm the amounts that need to be remitted, check the GL report through Reports, Financials, then General Ledger Report.
  2. Go to Setup, Settings, Payroll, Linked accounts; Taxes.
  3. Confirm the correct accounts are linked to every field
  4. Select OK

  

 

4 -How do I set up payroll deductions?

To set up payroll deductions, you have to take inventory of all the benefits and rewards that you are offering your employees, making sure to include the tax-deductible ones. There is a list of all the taxable benefits and allowances here that you can use to identify the various benefits and allowances.

Once you have all the taxable benefits and allowances accounted for, you can then make payroll deductions.

There are three main government program deductions that employers have to make. These programs include the following;

  1. Income Tax: You need to use the provincial tables to find the amount deductible from each province under income tax. There is an easy way to calculate the income tax, and that is by using CRA’s online payroll deductions calculator.
  2. Canadian Pension Plan: Employers have to deduct CPP if an employee is between 18 and 69, has a pensionable job and isn't disabled. You should visit CRA's Canada Pension Plan page to find more information on contribution rates, exemptions, and other useful information.
  3. Employment Insurance Premiums: Insurance premiums are deducted from each dollar of insurable pay that your employees earn. As the employer, you are also required to contribute 1.4 times the value being withheld from the employees, so you need to make sure those funds are also available. To determine the EI deductions for a given year, you should refer to the CRA's chart of EI premium rates and maximums.

 

5 -Should I use a payroll system or software?

Now that you have seen the level of detail and the amount of work required to set up Payroll for your company, you are in abetter placed to decide whether to use payroll software or to do it manually by yourself.

We would advise you to use a payroll system to manage your employee payroll because it is easy to make a costly mistake when doing payroll manually and iut is time consuming and inconvenient for both employers and employees.

There are many more benefits offered by payroll software beyond just payroll management.

Companies like Push offer a myriad of services like time tracking, hiring and onboarding, scheduling, and payroll, and can save you hundreds of hours a week by using an integrated software solution.


We hope this guide was helpful on your journey as a business owner! See you next time.

setting up payroll


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