Originally Published: Jan 24, 2016
Payroll is only required once you have completed the incorporation or registration of your business and only when you have hired employees.
Many new business owners believe that if your intention is to hire employees at some point, you should apply for the payroll tax account. This is not true. Only apply when you have hired individuals to work for you.
How often do I pay the payroll deductions?
Most commonly the payroll deductions are filed with CRA (Canada Revenue Agency) every month on the 15th of each month. You can file both manually and electronically with CRA and most financial institutions provide the ability for you to pay this tax through online banking.
How do I keep track of payroll for employees?
Most accounting software provides access to payroll management and costs. You may also go to CRA’s website for easy to use tools to calculate the payroll deductions and amount owing. Often individuals will have either their accountant or bookkeeper maintain these records on the business owners behalf and you would simply pay the account each month when do.
When is payroll not required?
If you have casual labour where the employee is not a regular part time or full time employee, you may be able to pay the employee by the hour or within a contract agreed upon without requiring to obtain a payroll account for this individual. If you have any questions, CRA is very helpful to assist you in any questions you may have regarding employees and payments overall.
CRA (Revenue Canada Agency) may be contacted directly by calling 1-800-959-5525. It is recommended to attempt calling their office earlier in the morning to avoid a busy signal.
What if I no longer operate the business and don’t require payroll anymore?
If you have concluded the business you have operated, always notify CRA of this cancellation or dissolution of the business. CRA is not notified of any ending to your business and will assume that remittances (monthly filings) will continue unless notified by yourself or someone who represents you such as an accountant or bookkeeper.
What about payroll for myself, the business owner?
It is best to speak to a tax specialist such as an accountant or bookkeeper about your specific financial and business situation however commonly business owners pay a portion of their income by payroll. This provides CPP benefits to the business owner upon reaching the age where CPP benefits are available.
How do I set up Payroll with CRA?
This is a simply process either by phone or online that you can complete yourself or have completed by a third party representing you and your business.
What is required from the employee to set up the Payroll Account?
You will need the following information:
- Legal name of employee
- Address of employee
- Date of Birth
- Social Insurance number
- When this employee began working for you. This is usually within 1-2 weeks of employment
If you have not yet incorporated or registered your business, we offer simply and easy forms of submission to take care of your business needs.
Ontario Business Central staff is available to assist you in any questions you may have.