PAYROLL ACCOUNTING Services
Every employer in Canada, whether a sole proprietor or a Corporation, who is paying salaries to its employees has to register for a Business Number and Payroll Account number.
The Payroll Account number is a unique 15-character number which starts with your 9-digit Business number followed by ‘RP’ and 4 digits of your reference number.
Responsibilities / Obligations under Provincial Acts – As an employer, you may have obligations under the prevailing employment related acts of the province for e.g.
- Employment Standard Act (ESA) - If you are having an establishment in Ontario then you have certain obligations under Employment Standard Act (ESA) w.r.t. minimum wages, Hours of work, public holidays, termination, pregnancy or parental leaves, vacation pay etc.
- Occupational Health and Safety Act (OHSA)– The OHS Act makes it obligatory for various categories of employers, including companies engaged in construction, manufacturing etc. to take necessary steps to ensure the overall occupational health and safety of their employees.
- Employer Health Tax (EHT) payments – EHT is a tax on remuneration paid to their employees by the employer. The EHT payment are required to be made ranging between 0.98% to 1.95% depending upon the total remuneration paid. The Employee Health Tax (EHT) is not payable, if the annual payroll is below the exemption limit of $1,000,000.
Deductions from Employee Salaries and Other Payments:
Every Employer has a responsibility to make necessary statutory deductions from the payment of salaries of its employees like Federal Income Tax, Provincial Income Tax, CPP contribution and EI premiums. Besides deductions from employee’s salary payments, the employer is also liable to contribute towards the CPP and EI as per the laid down provisions. These deductions from employee’s salaries as well as employer’s contributions towards CPP and EI are required to be remitted to CRA, within the due dates as prescribed.
CPP and Second Additional CPP contribution Rates (2024)
|
|
Rate |
Basic Exemption
($) |
Maximum Annual Pensionable Earnings ($) |
Maximum Deduction (Employee Share) ($) |
Maximum Employer Contribution ($) |
Self Employed
($) |
|
CPP |
5.95% |
3,500 |
68,500 |
3,867.50 |
3,867.50 |
7,735.00 |
|
2nd Additional CPP |
4% |
|
73,200 |
188 (i.e. 73,200 – 68,500) * 4% |
188 (i.e. 73,200 – 68,500) * 4% |
376 (i.e. 73,200 – 68,500) * 8% |
|
EI |
1.66% |
- |
63,200 |
1,049.12 |
1,468.77 |
- |
Remitter Type:
Generally, a small new employer (Quarterly Remitter) is eligible for Quarterly remittance which is based on the Average Monthly withholding amount of all payroll deductions. The Quarterly remitter has to remit the withholding taxes on or before the 15th of the following month of each quarter.
Whereas in the case of Regular remitters, they have to deposit the employee’s withholdings within 15th days from the end of the previous month in which the payment is made to the employees.
In the case of Accelerated Remitters, the frequency of remitting the deduction is much more frequent as compared to Regular Remitters.
At AccountTax Pros, we assist our clients who seek assistance for their payroll services for small business in Canada / payroll accounting for small business by providing the following Payroll Services:-
- Opening of a Payroll Account
- Registration for Employee Health Tax (if applicable)
- Registration with Workplace Safety and Insurance Board
- Weekly, bi-weekly, Semi-monthly or monthly Payroll Processing
- Preparation of Paystubs of employees
- Remittance of withholding taxes and other statutory dues to the CRA
- T4 Slip generation and filing T4 Summary with the CRA
- Record of Employment generation at the time of separation of employee
- Advise on Payroll structuring
- Payroll Accounting services for small business
- Other MIS reports generation