Canada payroll deduction program

And if an employee's pay involves taxable benefits, these need to be added to their income each pay period before you make any payroll deductions. The total income determines the total amount that is subject to CPP contributions, EI premiums, and income tax deductions. Once you have all taxable wages and benefits accounted for, you're ready to make your Canadian payroll deductions. Generally, employers need to make the following three government program deductions from employees' pay:.

Note that there is a separate chart for Quebec, which has a different rate structure. As with other payroll deductions, you can use the CRA's online calculator to determine the amount of Employment Insurance you need to deduct for any pay period. Note that some benefits and payments you give to employees are not subject to Employment Insurance.

As a Canadian employer, there may also be special situations that affect your EI deductions. See the CRA's Employment Insurance page for information on topics such as employment outside Canada, special payments, and hiring a family member.

You may have other employee deductions specific to your organization, such as extended health benefits, life insurance, and retirement plans. You can either remit electronically or use paper remittance vouchers and receive statements of account by mail.

If you remit electronically, you can view your statements and transactions via your online My Business Account. New employers are classed as regular remitters, which means you have to remit your deductions so the CRA receives them on or before the 15th day of the month following the month you made the deductions.

Later, once you have established a remittance history, you may be reclassified as a quarterly or accelerated remitter and have to complete less paperwork. For more information on remittance, including how to correct payroll remitting errors, see the CRA's page on remitting payroll deductions. Lastly, as an employer, each year you need to complete a T4 slip for each employee and complete the T4 summary form.

You must file the T4 information return and give the T4 slips to the employees on or before the last day of February following the calendar year to which the information return applies. T4 slips may be filled out electronically using the CRA's T4 web forms application which lets you file up to original, additional, cancelled or amended T4 slips or filled out in an online PDF.

See the previous link for more information. All of your business records, including your records relating to payroll, must be kept at your place of business or at your residence in Canada unless the CRA has given you permission to keep them elsewhere. Note too that business records and supporting documents needed to determine your tax obligations must be kept for a period of six years.

Also, remember that the business records, along with supporting documents, must be kept for six years. It is common to have deduction errors while calculating payroll remittances. For instance, you might find that you are over- or under-remitted.

In such cases, it is crucial that you alert the CRA and rectify the discrepancies as soon as you can. If you under-remit, then you can just remit the remaining amount to the CRA instantly and mention the remitting periods that they apply to.

The CRA may charge interest or a late remittance penalty if you are past the due date. If you over-remitted, you may reduce the next remittance for the current year by the amount you over-remitted. If your over-remittance was for a prior year, you may ask for a refund or transfer of credit.

View all post by felazar Website. An Overview of Payroll in Canada When it comes to employers in Canada, running payroll involves the following five steps: Opening and operating a payroll account with the CRA; Collecting required employee information, such as their Social Insurance Number. You will also need a completed provincial and federal TD-1 form. Report the deductions and income of each employee on the appropriate T4A or T4 slip.

File an information return on or before the last day of February of the following year. Step 1: Open the payroll account. There are three ways to get a business number: Register online with the business registration online service; Call the CRA at ; Fax or mail a completed Form RC1 to the nearest tax centre or tax service office. Step 2: Collect required employee information. Step 3: Make the correct deductions.

Step 4: Remit the deductions to the CRA When it comes to remitting the deductions, you can do so electronically or with paper remittance vouchers. Step 5: Complete information returns and T4 slips The last step is to complete a T4 slip for each employee and fill out the T4 summary form.

When do you have to submit the remittance? The due date for your remittances is also the 15th of the following month for which you made deductions. Get accurate payroll calculations every pay run, automatically with QuickBooks Online plus Payroll. Learn more. A payroll deductions online calculator lets you calculate federal, provincial, and territorial payroll deductions for all provinces and territories except Quebec.

You first need to enter basic information about the type of payments you make: salary, commission, or pension. In addition to simplifying payroll, the payroll calculator helps you know how much you owe the CRA at the end of each month.