Payroll processing is an essential part of business in Toronto. As an employer, you require to process payroll accurately and on time to comply with federal and provincial regulations. In Toronto, payroll processing can be complex due to various regulations and taxes. That’s why you should consider hiring a company that can provide payroll services in Toronto. In this post, we will cover everything you need to know about running payroll in Toronto.

Steps To Process Payroll In Toronto

Get an Employer Identification Number (EIN) Before running payroll, obtain an Employer Identification Number (EIN) from the Canada Revenue Agency (CRA). This number serves as your company's tax identification number while paying taxes.

Register for Payroll Taxes

As an employer in Toronto, you require to register for payroll taxes with the CRA. This includes the Canada Pension Plan (CPP), Employment Insurance (EI), and income tax. You also have to register for the Ontario Employer Health Tax (EHT).

Calculate Employee Deductions

Once you have registered for payroll taxes, calculate employee deductions. This includes CPP, EI, and income tax. In addition, deduct other amounts such as union dues, group insurance premiums, or wage garnishments.

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Choose a Payroll Schedule

Once you calculate the employee deduction, choose a payroll plan that works for your company. You can do it weekly, biweekly, monthly, or every two weeks. Regardless of the payment plan, you must pay employees in Toronto at least twice a month.

Set Up a Payroll System

You can use a manual or automated payroll system. A manual system involves calculating payroll manually and issuing cheques. Payroll software incorporates an automated system that computes deductions and sends out direct deposits. You may save time and minimize errors by using this payroll system.

Record Keeping

You must keep accurate records of your payroll. This includes employee earnings, deductions, and taxes paid. You must keep these records for at least six years since CRA can request them anytime.

Remit Payroll Taxes

You must remit payroll taxes to the CRA on time. This includes CPP, EI, income tax, and EHT. Failure to submit remit on time can result in penalties and interest charges.

Year-End Filing

At the end of the year, you need to file T4 slips for each employee. These slips show the employee income, deductions, and taxes paid. You must also file a T4 Summary, which shows the total payroll amounts and taxes paid for the year.

Payroll Software

Using payroll software can make the payroll process easier and more efficient. Many options are available, ranging from straightforward software to more complex systems that integrate with other company functions. Payroll software selection should take your company's demands and budget into account.

Several Work Permit Types Available in Canada

Canada offers several types of work permits for individuals. These permits are issued based on various criteria as the type of job, the duration of employment, the skill level of the worker, and the willingness to sponsor the worker.

Here are the types of work permits that Canada offers:

Employer-Specific Work Permit

The most common type of work permit is the employer-specific work permit for workers who get a job offer from a specific Canadian employer. This kind of permit has a link to a particular business, position, and location, and it typically calls for a favourable Labour Market Impact Assessment (LMIA).

Open Work Permit

Another type of work permit is the open work permit, which allows the worker to work for any employer in Canada except for employers on the list of ineligible employers. Open work permits are usually issued to individuals, who are eligible for permanent residency, as well as their spouses or common-law partners.

Post Graduation Work Permit

International students who have graduated from a Canadian post-secondary institution may be eligible for a post-graduation work permit, which allows them to work in Canada for up to three years.

Other Types

Other work permits include intra-company transfer, NAFTA, International Experience Canada, and Seasonal Agricultural Worker Program work permit. Each type of work permit has its own requirements and application process.

Conclusion

In conclusion, running payroll in Toronto can be a complex process that requires careful attention to regulations and taxes. By following these steps, you can ensure that your payroll is processed accurately and on time. With the right tools and knowledge, you can focus on growing your business while ensuring that employees are paid accurately and on time. If you are unsure about payroll processing, it is best to seek payroll services in Toronto from professionals such as Muia Consulting. They can ensure that you comply with all regulations and can help you avoid costly mistakes.

Everything You Need to Know About Running Payroll in Toronto