Are you aware of the fact that neglecting to properly manage your company’s payroll could be putting your business at serious risk? If your company’s payroll is audited by the Canada Revenue Agency (CRA) and is found to be lacking or non-compliant, you could face severe penalties. Think that the chances of being audited are very low? On the contrary! According to statistics, in 2018 alone, The CRA reviewed the payrolls of 47,795 businesses – and these audits resulted in the agency charging in excess of $29 million in penalties.
The good news is that there is an easy way in which to ensure that your business is thoroughly prepared should it be singled out for an audit. Utilizing professional Canadian payroll services! Here is everything that you need to know.
A payroll audit is very different from a business tax audit. Essentially, it refers to the process whereby the authorities inspect whether or not your business is compliant with payroll administration, accounts payable and receivable, recording of taxable benefits and other regulations as set out by specific agencies including the Canada Revenue Agency, Revenu Québec, Workers’ Compensation and Employment/Labour Standards.
In Canada, there are five steps to properly running payroll. The first step is to open an account with the Canada Revenue Agency (CRA). From there, an employer would need to gather the necessary information from their employees and make the correct Canadian payroll deductions from employees’ pay each pay period. Employers will also need to remit these payroll deductions to the Canada Revenue Agency as needed, as well as report each employee’s financial information on the appropriate T4 or T4A slip. Finally, employees in Canada will need to file an information return on or before the last day of February of the following calendar year.
It is important to note, however, that payroll compliance is complex and, oftentimes, convoluted. Along with that, certain aspects of compliance may vary for Canadian provinces and territories: minimum wage, statutory holidays, vacation and leaves, notice of termination and severance pay and many more.
This is the reason why so many businesses choose to outsource their company’s payroll to a professional who specializes in the area.
Canadian payroll services are offered by payroll specialists who are well-versed when it comes to following regulations and ensuring that businesses remain compliant at all times. Here at PSI Payroll Services Inc., we have been in operation since 1995, helping our clients find the simplest and most convenient way in which to pay their employees.
Our payroll services include:
We can assist you in terms of successfully managing your company payroll in an effort to avoid penalties should your business be selected for audit.
For more information, be sure to get in touch with our team.