Congrats! You are ready to onboard your first Employee!
Step 1: Obtain a CRA Payroll Number.
You can do this by simply giving CRA Business a call and a rep will issue a payroll number immediately.
The account number will be your business number followed by RP0001.
Step 2: Select Your Payroll Service Provider
There are ample payroll service providers available, such as Ceridian, Payworks, ADP to name a few.
Each of these providers offer an online platform to process your payroll, track vacation accruals, manage employee details, facilitate direct deposit, and issues ROE's upon termination.... for a fee. Fee structures varies between providers so read the fine lines! Late payroll or extra runs can cost up to $150. OUCH.
Another option is Quickbooks Online Payroll. If you are using a bookkeeper or DIY, you can add on the payroll module for ~$20 per month. QBO also facilitates direct deposit, however does not file your PD7A remittances for you. Your bookkeeper or yourself will need to do this monthly.
If you are wanting the FULL Service options which includes filing and remitting the monthly remittance to CRA, Quickbooks now offers Payroll Advance which costs ~$40 / month.
Regardless of which service provider you choose, its important to have someone knowledgeable to process your payroll as he / she will need to still calculate the statutory holiday pay if eligible, vacation pay, bonuses, commissions etc.
Step 3: Sign Employment Agreement & TD1 CRA forms
After extensive interviews and arriving at your employee of choice, it is customary to lay out the terms of the employment on paper and have both parties sign an employee agreement along with TD1 CRA Federal & Provincial forms.
Step 4: Process Payroll
Log in to the service provider chosen, process the payroll, cut check or process by direct deposit.
If you are using one of the full service providers, you will not need to issue pay stubs as your employee can log in to the self serve portal and access. If paying by check(s), pay stub(s) are printed and attached to the check(s).
Things to Remember
- Payroll Remittances are generally paid monthly, by the 15th of the following month.
- T4 are issued by Feb 28th of the following year. T4 Summary must be filed by Feb 28th of the following year.
- Worksafe reports are filed either quarterly or annual depending on your business.
- ROE's must be issued upon termination of an employee and filed with Service Canada.
- Vacation & severance if any, must be paid out upon termination.
- Not sure if employee qualifies for stat pay? See POST: http://bloomaccounting.ca/blog/view/274