It’s easy for Canadian small business owners to get caught up in payroll complexity. According to a recent government report, approximately 90,000 small businesses shut down every year in Canada — as a result, effectively managing payroll is critical to ensure long-term business success. We’ve put together a guide the tells you all you need to know in order to effectively calculate payroll tax in Canada.
So let’s dive in: What are your specific obligations as an employer? What steps are required for calculating payroll tax Canada? Do you need a bookkeeper or accountant to ensure payroll accuracy? Let’s start with a quick definition.
What is payroll?
Your payroll lists all employees, their wages and the deductions taken from those wages. Most small businesses now use in-house software or cloud-based applications to streamline the process of paying staff and ensure deductions are correctly calculated.
Deductions cover everything your business is required to remit. This includes employment insurance (EI), Canada Pension Plan (CPP) contributions along with federal and provincial income tax. For EI and CPP, deductions follow specific contribution frameworks, while taxes follow schedules set out by the federal government and each individual province. Deduction amounts vary year-to-year and depending on your employees’ primary place of residence… Click on the following link to read more: