When you run a small or medium-sized business, many tasks require your expertise, including developing strategy, growing sales, and managing your staff. Payroll usually isn’t one of them. Most business owners are not experts in paying staff and are likely to drive through some big potholes if they try to do it themselves.
Fortunately, there are some great alternatives. Accounting firms can leverage automated payroll software like Wagepoint to ensure that your payroll is handled accurately and efficiently. Or there is a range of payroll outsourcing companies in Canada.
Here are some of the key reasons why it makes sense to outsource your payroll:
Avoid CRA penalties with automated payroll
When you do your payroll, you must comply with several Canada Revenue Agency (CRA) rules. These include deducting the appropriate income tax, CPP and EI amounts from each employee’s salary. At the end of the year, you must issue T4 slips and create a T4 summary for your entire staff. These must be delivered to CRA on time and with accuracy.
How to remit payroll deductions to the CRA: Once you have made all the deductions, you remit the appropriate amount to the government. Again, it’s your responsibility to make sure that this is accurate and in the government’s hands before the deadline.
What if something goes wrong? You can be hit by a late payroll remittance penalty. If the amount is incorrect, the CRA will demand that you pay the difference and may charge you interest or penalties.
Not only does this hit your company in the pocketbook, but it can also be frustrating and stressful. When you outsource payroll, you no longer have to worry about missed CRA payroll remittance deadlines. Your service provider ensures that your remittances are accurate and on-time.
Save time and money by outsourcing and automating payroll
Let’s face it. When you are a business owner or manager, you have plenty on your plate. You may be working to build revenue, developing a new online strategy, or hiring new team members. You probably don’t have time to handle payroll. Payroll is one of the most obvious items to take off your plate because it’s routine and time-consuming.
Yes, you could hire an employee to handle this task for you. However, that’s likely to cost you more than outsourcing and automating payroll. Since payroll is usually processed twice a month, you would need to ensure that this staff member had other tasks to keep them busy the rest of the time.
The cost of outsourcing payroll in Canada is usually a lot less than doing it yourself!
Keep your employees happy with automated payroll
It’s important to treat your employees well to retain them for the long term. One of the simplest – and most important – steps that you can take is to make sure that they are paid the right amount and on time. The last thing you want is to have one of your staff members storms into your office, complaining that they could not make their rent or mortgage payment because you made a payroll error.
Employees can track their own time using Wagepoint Track on their smartphones
When you outsource payroll with Wagepoint, you get your employees to do the work for you. Staff can clock in/out on their laptop, tablet, or smartphone. Managers are notified when time sheets are available for approval.
Wagepoint’s automated payroll system then calculates employee pay and deductions. Wagepoint integrates with the accounting software such as Xero, so that wage payments are automatically reconciled with the bank payments.
It’s quick, easy, and low cost.
Online Payroll Software is always up to date
Yes, it’s possible to do your own payroll from your desktop accounting software. However, one of the challenges is that the Canadian government adjusts EI, CPP and income tax rates on a regular basis. Therefore, you need to make sure that you download any software updates prior to calculating your payroll deductions.
When you outsource payroll, your provider will automatically apply the latest rates for payroll deductions by using smart online payroll software such as WagePoint. That way you don’t have to worry about being penalized by the CRA for remitting an incorrect amount.
The payroll company will also take care of these finicky (but important) tasks:
- Tracking of time and attendance
- Issuing Records of Employment when an employee leaves your company
- Recording statutory holiday and vacation pay
- Calculating and paying workers compensation premium
- Remitting Employer Health Tax (if applicable)
- Issuing T4 slips and T4 summary at the end of the yea
- Making other deductions, such as for retirement contributions or charitable donations
Outsourcing payroll offers direct deposit and employees love it
Some businesses are still issuing old-fashioned pay cheques to their employees. Staff need to take the extra step to deposit them in their bank (although at least now they can use mobile deposit rather than having to go to the bank).
When you outsource your payroll to an online payroll service provider, the funds will automatically flow into each employee’s account through direct deposit. Each person receives a statement outlining their pay and related deductions. It’s simple and employees like the fact that the money arrives in their account directly without any effort on their part.
Ways of outsourcing payroll in Canada
So, you’re ready to reduce your headaches by outsourcing payroll. Basically, there are two options:
- Work with an accounting firm like Bronte Bay, which partners with Wagepoint, a fully automated online payroll platform serving thousands of small businesses across North America. This can be a great option even if you are a small company with a few employees. Wagepoint will secure your payroll data, which is vital since no company wants to see their employees’ personal information leaked online.
- You can deal with one of the big payroll processing companies such as ADP or Ceridian. Hiring a huge payroll company to handle the payroll for a small business is like buying a $500 nailing gun because you need to tap in a single nail. You just don’t need all that firepower.
For most small- and medium-sized businesses in Canada, outsourcing payroll to an accounting firm that uses Wagepoint is a great solution. At Bronte Bay, we’d love to chat with you about your payroll needs and discuss how we can help. Simply send us an email at firstname.lastname@example.org