Payroll Services for Restaurants

The number one CRA audit trigger for restaurants. We get it right from day one.

• Configure payroll to track controlled tips (employer-distributed) and direct tips (customer-to-employee) as separate income categories.
• Deduct CPP, EI and income tax on controlled tips since they are wages paid by the employer.
• Deduct CPP and income tax on direct tips (pensionable but not EI insurable) with no EI deduction.
• Reconcile POS credit card tip data against payroll records monthly so T4 amounts match POS data exactly.
• Prepare T4s with correct Box 14 (total employment income including all tips) and Box 24 (EI insurable earnings excluding direct tips).

Variable-hours staff need individual calculations. Flat rates and estimates are ESA violations.

• Accrue vacation pay at 4% (or 6% at 5+ years) on every dollar of wages earned on each pay run.
• Calculate public holiday pay using the variable-hours formula: total regular wages in the 4 weeks before the holiday divided by 20.
• Calculate the formula individually for each employee on each of the 9 Ontario public holidays.
• Add premium pay (1.5x regular rate) for employees who work on the public holiday.
• Track substitute day entitlements if the employer offers a day off in lieu of premium pay.

Ontario's ESA rules are restaurant-specific traps. We monitor every pay run.

• Track total weekly hours across all shifts including split shifts for the 44-hour overtime threshold.
• Calculate overtime at 1.5x the regular rate for every hour over 44 in a work week.
• Monitor the 11-hour rest period between shifts and flag scheduling violations before they become complaints.
• Verify 30-minute eating periods are provided for every 5 consecutive hours of work.
• Ensure daily maximum hours (8 hours unless a written agreement exists) are not exceeded without consent.

Late remittance penalties start at 3% and climb to 10%. We never miss a deadline.

• Calculate total CRA remittance each pay period: employee CPP + EI + income tax plus employer CPP match (1:1) and EI (1.4x).
• Submit remittances to CRA by the 15th of the following month (regular remitters) or within 3 days (accelerated).
• Determine your remitter frequency based on annual payroll deductions and notify CRA of any frequency changes.
• Reconcile annual T4 Summary to total remittances paid to ensure no discrepancy triggers a review.
• Respond to CRA payroll audit requests and information letters on your behalf.

Accurate T4s prevent CRA reassessments. Timely ROEs prevent Service Canada penalties.

• Prepare all employee T4s with accurate tip income reporting (controlled and direct separated correctly).
• Include taxable benefits on T4s: staff meals, uniform allowances, parking if applicable.
• File all T4s and the T4 Summary with CRA by the February 28 deadline.
• Issue ROEs electronically through ROE Web within 5 calendar days of every employee separation.
• Assign correct Block 15C reason codes for resignations, terminations, seasonal layoffs and leaves of absence.

Configured once, correctly. Restaurant-specific settings from day one.

• Set up Wagepoint or PaymentEvolution with controlled tip and direct tip income categories.
• Configure multiple pay rates: regular, overtime (1.5x), public holiday premium, training rate if applicable.
• Set up vacation pay accrual method (accrued on each cheque or tracked and paid on vacation).
• Configure department tracking: kitchen, front of house, bar, management for labour cost reporting.
• Integrate POS time clock data or timesheet imports for accurate hours on every pay run.