Payroll is the one filing where being late costs money immediately. Source deductions are held on behalf of someone else, the CRA treats them accordingly, and the penalties start at the first missed remittance rather than building slowly.
We run the payroll, remit on the right date, produce the slips in February and issue records of employment when someone leaves.
What this includes
- Pay runs on your schedule, weekly, biweekly, semi-monthly or monthly
- CPP, EI and income tax calculated and remitted on time
- T4 and T4A slips and summaries, filed in February
- Records of employment when someone leaves
- Taxable benefits identified and put on the slips rather than found later
- Owner-manager salary set up properly, with the corporate side considered
Contractor or employee is a payroll question
Paying someone as a contractor who is really an employee is one of the more expensive mistakes a small business can make, because the assessment comes with both halves of the deductions and penalties on top. The CRA looks at control, ownership of tools, financial risk and how integrated the person is — not at what the invoice says. If you are not sure, ask before the year end.
Taxable benefits
Vehicles, parking, insurance premiums, gift cards and allowances are all capable of being taxable benefits, and they belong on the T4 rather than in a discussion two years later. We review them as part of the year end.
Paying yourself
If you own the company, payroll is part of a bigger decision about salary against dividends, and it has to be settled while the year is still open. See tax planning.
Questions we are asked about this
When are payroll source deductions due?
It depends on your remitter type, which the CRA assigns based on your average monthly withholding. Most small employers remit by the 15th of the month after the pay period, but larger employers remit more often. The CRA tells you which category you are in, and it can change.
When are T4 slips due?
T4 slips and the T4 summary are generally due by the last day of February for the previous calendar year, and employees need their copies by then as well.
Can you take over a payroll mid-year?
Yes. We pick up the year-to-date figures from your current setup, check them, and carry on. The T4s at the end of the year cover the whole year regardless of who ran which part of it.
Worth reading
- The guide to managing payroll in Canada
- CRA payroll remitter types and when they change
- When a gift card becomes a taxable benefit
Where we work
We are based in Scarborough and act for clients across Toronto and the GTA in person — see accountant in Scarborough and small business accountant in Toronto — and everywhere else in Canada by email and video call.
Our other services
Corporate Tax Returns (T2) · Personal Tax Returns (T1) · Trust Returns (T3) · HST and GST Filing · Bookkeeping · CRA Audits and Disputes · Financial Statements · Tax Planning · Incorporation and Business Setup · Estate and Succession Planning · Cross-Border Tax
Our office
ClearWealth Accounting Advisors
1457 McCowan Rd, Suite 202
Toronto, Ontario M1S 5K7
Get directions
Open Monday to Friday, 9 a.m. to 6 p.m.
Phone: (437) 290-5117
Email: info@clearwealth.tax
