Payroll Compliance: What Canadian Business Owners Need to Know

When a business hires employees, new responsibilities arise with the Canada Revenue Agency. Employers must withhold and remit payroll deductions for their employees on a regular basis.

These deductions typically include:

• Income Tax

• Canada Pension Plan (CPP) contributions

• Employment Insurance (EI) premiums

If payroll remittances are not submitted on time, the CRA can apply penalties and interest. Over time, those charges can become significant.

For this reason, payroll management is one of the most important aspects of staying compliant with the CRA once a business begins hiring staff.

Many business owners choose to have payroll managed professionally so that deductions are calculated correctly and remitted on time.

Having proper payroll systems in place not only keeps the business compliant but also ensures employees receive accurate pay records and tax slips at the end of the year.