In the complex world of business, financial management stands as the cornerstone of success, particularly…
National Payroll Week
National Payroll Week
by Fahad Suleman, CPA and Nizam Shajani, CPA, CA, MBA
National Payroll Week (“NPW”) is a national awareness campaign which celebrates the valuable contributions of payroll employees and elevates the payroll profession. This week is held annually by The Canadian Payroll Association, the Chartered Institute of Payroll Professionals (UK) and American Payroll Association (USA).
In 2020, this week will be celebrated in Canada during September 21-25. During this week, The Canadian Payroll Association will be holding virtual events which can be signed up for on their website present here.
Using a payroll professional:
While a significant amount of small businesses complete payroll activities in-house, please find below a list of reasons why payroll should be outsourced to a payroll professional:
- Time saving:
As payroll can be a time consuming task that needs to be repeated every pay period, outsourcing the payroll function can provide the business owners with additional time to focus on core business activities to increase the revenue of the business or to increase efficiencies in the current business processes. This could result in additional revenue or cost savings which could outweigh the financial cost of outsourcing payroll.
- Compliance and timely remittances:
When federal and provincial legislations change, a payroll professional will inform its clients of the changes being implemented. This will allow the corporation to be in compliance with the changes and take advantage of any opportunities available. A recent example of such opportunity is the 10% Temporary Wage Subsidy program which was offered by Canada Revenue Agency for the period of March 18 to June 19, 2020. This program was introduced to support eligible employers in tough economic conditions due to COVID-19. This program allowed eligible employers to reduce their payroll remittances to receive up to 10% of eligible employee’s salaries (up to a maximum of $1,375 for each eligible employee and to a maximum of $25,000 for each eligible employer).
Additionally, Payroll professionals will ensure that remittances for payroll are made on time, as late remittance penalties can be costly. The penalties on late payments are based on the length of delay of payment (up to 10% of remittance if the payment is late by 7 days or more), and can double if there are multiple occurrences of late remittance payments.
- Paying employees accurately and on time:
As most small business employees are the back-bone of the business, ensuring that they are paid accurately and on time is a necessity that needs to be met. A payroll professional will ensure that accurate payments are made on a timely basis to employees through widely-used direct deposit systems eliminating any manual processes of writing individual cheques. Related pay stubs and payroll records can be accessible to the employees through password protected PDFs or through cloud-based systems. Employees will appreciate the availability of these reports at any time and in a secured format.
- Availability of comprehensive reports:
Payroll professionals are able to offer their clientele with a variety of customized comprehensive reports which might not be available through a general accounting system. These reports can reduce the amount of accounting or assurance work that will possibly be required to gather the same information from various pieces of documents. This can possibly result in a reduction of your accounting or assurance professional fees.
An appropriate payroll professional can provide small business owners with peace of mind and increased amount of time that can invested in growing the business.
CRA Payroll Deductions Online Calculator:
CRA offers a free payroll deductions calculator online that can be accessed by anyone to calculate federal, provincial (except for Quebec), and territorial payroll deductions. This payroll calculator is updated on a regular basis for any changes that are made in the Federal, provincial or territorial tax legislation. This payroll calculator can be extremely helpful for small businesses that are completing their payroll manually. Things that should be considered while using this calculator are as follows:
- As CRA states “You assume the risks associated with using this calculator. The reliability of the calculations produced depends on the accuracy of the information you provide”, one needs to ensure that accurate information is entered in the calculator to receive accurate results as the user bears the risks of any errors made in the calculation.
- Ensure correct province is selected in the calculation as different tax rates and credits are applicable for different province and territories.
Payroll Deductions Online Calculator from CRA can be found here.
For additional information, please visit CRA’s Employer’s Guide – Payroll Deductions and Remittances.
This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. © 2020 Shajani LLP