Payroll Services for Healthcare
Professional corporation payments, locum classification, shift premiums, overtime exemptions, nurse and PSW payroll, benefits administration, maternity leave, WSIB, multi-clinic tracking. From $125/month. T4s and ROEs included.
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Healthcare Clients
Five Worker Categories Under One Roof and CRA Treats Each One Differently
A single medical clinic can have the owner physician paid through a professional corporation (salary/dividends, no EI if 50%+ shareholder), an associate doctor invoicing through their own PC (not payroll at all), a locum physician whose classification depends on who controls the schedule, nurses and PSWs on standard payroll with shift premiums and overtime, and reception staff on hourly pay. Five categories of workers, three different payment structures and two separate CRA reporting obligations. Get one wrong and CRA reclassifies the relationship retroactively with interest and penalties on every dollar for every year under review.
We handle payroll for medical clinics, dental practices, physiotherapy clinics, chiropractic offices, optometry clinics and multi-disciplinary health centres across Ontario. Every worker is classified at onboarding. Owner salary-dividend splits are optimised annually. Shift premiums are tracked. Overtime is calculated at the blended rate. Benefits are classified correctly on T4s. From $125/month. Healthcare accounting is a core specialization.
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Our Healthcare Payroll Services
Pay Run Processing
Biweekly or semi-monthly. Shift premiums tracked. Overtime at blended rate after 44 hours for non-exempt staff. Variable hours from scheduling software.
Owner Salary-Dividend Split
Annual optimisation for physician/dentist professional corporations. Salary for RRSP room and CPP. Dividends to avoid CPP/EI. Combined tax minimised.
Worker Classification
Every locum, associate and contractor classified at onboarding with documented two-factor test. Defensible against CRA audit.
Shift Premium Tracking
Evening, night and weekend premiums configured. On-call standby vs. call-in separated. Blended rate calculated for overtime weeks.
Benefits Administration
Group health, dental, life, STD/LTD classified correctly. Taxable vs. non-taxable on T4s. Maternity leave benefit continuation tracked.
Multi-Clinic Payroll
Central payroll across multiple locations. Cost centre reporting by clinic. Consolidated remittances. T4s from parent corporation.
Healthcare Payroll by a Licensed CPA
Every aspect of healthcare payroll handled correctly. From professional corporation payments to shift premium overtime. AFFORDABLE flat-fee pricing.
Worker Classification and Documentation
Five worker categories in one clinic. Each has different CRA treatment.
- Classify the owner physician/dentist: salary and dividends from their own professional corporation, CPP on salary, EI exempt if 50%+ shareholder.
- Classify associate practitioners: if they invoice through their own PC, they are not on your payroll. No T4. No deductions. Business expense.
- Classify locum physicians: two-factor test applied. Control, exclusivity, tools and financial risk documented.
- Classify nurses, PSWs, hygienists and assistants: employees on payroll with CPP, EI, income tax and overtime entitlement.
- Classify reception and admin: standard employees on payroll. T4 issued. Vacation pay at 4% or 6%.
Owner Salary-Dividend Optimisation
The split between salary and dividends determines your combined tax bill for the year.
- Calculate the optimal salary amount to maximise RRSP contribution room ($31,560 in 2026 requires approximately $175,333 in earned income).
- Model the combined corporate + personal tax at different salary/dividend ratios to find the minimum total tax.
- Factor in CPP contributions: salary triggers CPP (employee + employer), dividends do not. Determine if CPP contributions are beneficial for retirement.
- Set up the salary component through the professional corporation payroll with correct CPP and income tax deductions. No EI if 50%+ shareholder.
- Review and adjust the split annually based on changes in corporate income, personal needs and tax rates.
Shift Premiums, On-Call and Overtime
Evening, night, weekend, on-call standby and call-in each have different payroll treatment.
- Configure evening ($1.50-$4.00/hr), night ($2.00-$5.00/hr) and weekend ($1.00-$3.50/hr) premiums in the payroll system.
- Separate on-call standby pay (taxable, generally not hours worked for overtime) from call-in pay (taxable, counts toward 44-hour threshold).
- Calculate overtime at the blended rate when a nurse works mixed shifts (day + night) in the same week.
- Apply the overtime exemption correctly: only regulated professionals (doctors, dentists, chiropractors) are exempt. Nurses, PSWs and support staff are NOT exempt.
- Ensure the 3-hour minimum reporting pay under the ESA applies to every call-in, even if the employee works only 30 minutes.
Benefits Classification and T4 Reporting
Getting the taxable/non-taxable classification wrong costs the employee or triggers a CRA reassessment.
- Classify extended health and dental plan premiums as non-taxable (correct in Ontario). Do NOT include on T4 as taxable benefit.
- Classify group life insurance: not taxable up to $25,000 coverage. Premium on coverage above $25,000 is a taxable benefit on T4.
- Structure STD/LTD: if employer pays the premium, benefits received are taxable. If employee pays, benefits are tax-free. Many practices prefer employee-paid LTD.
- Evaluate parking: if the clinic provides free parking with a determinable fair market value, it is a taxable benefit. Document the FMV assessment.
- Professional development and CE courses paid by the employer are not taxable. Deductible for the corporation.
Maternity and Parental Leave
Healthcare has a higher rate of maternity claims than most industries. Handle correctly to avoid ESA violations.
- File ROE within 5 days of last day worked with Reason Code M (Maternity). Insurable hours and earnings calculated correctly.
- Track employer top-up payments (if provided) as taxable income with CPP, EI and income tax deducted.
- Monitor benefit continuation: ESA requires group health, dental and life coverage to continue during leave if the employee pays their share.
- Track the employee's return-to-work date. They are entitled to the same or comparable position with the same pay and benefits.
- Handle seniority and service accrual during the leave period as required by the ESA.
CRA Filing and Compliance
Every deadline met. Every remittance on time. Every T4 accurate.
- Submit CRA remittances (CPP + EI + income tax + employer contributions) by the deadline every pay period.
- Prepare all T4s with accurate shift premium, on-call, taxable benefit and employer top-up reporting by February 28.
- File ROEs within 5 days of every separation, layoff, maternity leave and parental leave.
- Reconcile T4 Summary to total annual remittances to prevent CRA discrepancy reviews.
- Respond to CRA payroll audit requests, worker classification reviews and benefit classification inquiries on your behalf.
Free Healthcare Payroll Consultation
Free Healthcare Payroll Consultation
Case Studies: Healthcare Payroll
Medical Clinic, Markham (Locum Reclassification Averted)
A medical clinic had 2 locum physicians on contractor agreements. Both worked exclusively at the clinic on the clinic's schedule using clinic equipment. CRA audit risk was high. We reclassified one locum to payroll (failed the two-factor test) and restructured the second as a genuine independent contractor with their own PC, multiple clients and documented control over their schedule. Estimated exposure avoided: $48,000. Cost: $125/month ongoing. Healthcare Services →
Dental Practice, Mississauga (Owner Salary-Dividend Optimisation)
A dentist earning $380,000 through their PC was taking all income as salary and paying combined tax of $142,000. We restructured to 60% salary ($228,000) and 40% dividends ($152,000). RRSP room maintained. CPP maximised. Combined corporate + personal tax reduced to $118,000. Annual savings: $24,000. Cost: $125/month payroll + T2 FREE. Dentist Services →
Physiotherapy Clinic, North York (Overtime Underpayment)
A physiotherapy clinic with 6 physiotherapy assistants was not paying overtime, assuming all healthcare workers were exempt. Physiotherapy assistants are NOT regulated healthcare professionals and ARE entitled to overtime after 44 hours. Over 18 months, underpaid overtime totaled $11,200. Two employees filed ESA complaints. We calculated the back pay, processed retroactive payments and configured overtime correctly. Cost: $125/month ongoing. Payroll Services →
Multi-Clinic Group, Toronto (Shift Premium Not in Overtime Rate)
A 3-location medical group was paying nurses overtime at the base rate ($42/hour x 1.5 = $63) instead of the blended rate including night premiums ($45/hour x 1.5 = $67.50). Across 8 nurses over 2 years, the underpayment was $14,400. We recalculated all overtime with the correct blended rate, processed retroactive payments and configured the payroll system correctly. Cost: $125/month per location.
Worker Classification in Healthcare: Who Goes on Payroll
| Worker Type | Payroll? | CPP/EI/Tax | How Paid |
|---|---|---|---|
| Owner physician/dentist (own PC) | Yes (salary/dividends from own PC) | CPP + tax on salary. No EI if 50%+ shareholder. | Salary/dividend split optimised annually by CPA. |
| Associate doctor/dentist (own PC) | No. Not your payroll. | No deductions by clinic. | Associate's PC invoices clinic for % of billings. |
| Locum physician | Depends on relationship | Employee: CPP+EI+tax. Contractor: none. | Two-factor test determines classification. |
| RNs, RPNs | Yes. Employee payroll. | CPP + EI + tax. Shift premiums + overtime. | Hourly + premiums. T4 issued. Benefits provided. |
| PSWs | Yes. Employee payroll. | CPP + EI + tax. | Hourly. Shift premiums possible. Vacation 4%. |
| Dental hygienists | Yes. Employee payroll. | CPP + EI + tax. | Hourly $38-$55/hr. Must be on payroll. |
| Physio/chiro/optom associates | Depends on structure | Own PC: no deductions. No PC: employee payroll. | PC invoices clinic or paid hourly/salary by clinic. |
| Reception, admin, office manager | Yes. Employee payroll. | CPP + EI + tax. | Salary or hourly. Standard payroll. |
The Locum Trap: A locum earning $150,000 over 2 years who is reclassified by CRA costs the clinic $30,000 to $50,000 in unremitted CPP, EI, income tax, employer contributions and penalties.
Shift Premiums, On-Call Pay and Overtime
| Component | How It Works | Payroll Treatment |
|---|---|---|
| Evening premium | $1.50-$4.00/hr above base (3 PM to 11 PM) | Added to gross. CPP/EI/tax. Included in overtime rate. |
| Night premium | $2.00-$5.00/hr above base (11 PM to 7 AM) | Same. All deductions. Included in overtime rate. |
| Weekend premium | $1.00-$3.50/hr above base | Same treatment. |
| On-call (not called in) | $50-$150/shift or $5-$15/hr standby | Taxable. CPP/EI. Generally NOT hours worked for overtime. |
| On-call (called in) | Regular or premium rate. 3-hour minimum pay. | Taxable. All deductions. Hours count toward 44-hour threshold. |
| Overtime (44+ hours) | 1.5x blended rate. Doctors/dentists/chiros exempt. Nurses/PSWs/admin NOT exempt. | All deductions. Blended rate includes base + shift premiums. |
Only Regulated Professionals Are Exempt: Nurses, PSWs, dental assistants, hygienists, physio assistants, reception and admin are all entitled to overtime at 1.5x after 44 hours. Many clinics assume all healthcare workers are exempt. They are not.
Benefits Administration for Healthcare Practices
| Benefit | Taxable on T4? | Treatment |
|---|---|---|
| Extended health plan | Not taxable (Ontario) | Employer premiums not taxable. Not on T4. Deductible for corp. |
| Dental plan | Not taxable (Ontario) | Same as extended health. |
| Group life (up to $25K) | Not taxable | Above $25K: premium on excess is taxable on T4. |
| STD/LTD | Premiums: no. Benefits: taxable if employer-paid. | Many practices structure LTD as employee-paid to keep benefits tax-free. |
| Uniform/scrub allowance | Not taxable (if required) | Employer-provided required uniforms not taxable. |
| Parking | Taxable benefit | FMV of employer-provided parking on T4. |
| Professional development/CE | Not taxable | Employer-paid courses related to duties. Deductible. |
Maternity and Parental Leave
| Leave Type | Duration | Payroll Obligations |
|---|---|---|
| Pregnancy leave | Up to 17 weeks | ROE within 5 days. Reason Code M. Top-up (if provided) is taxable. |
| Parental leave (birth parent) | Up to 61-63 weeks | ROE filed. EI from Service Canada. Employer top-up taxable. |
| Parental leave (non-birth parent) | Up to 63 weeks | Same ROE and top-up treatment. |
| Benefits during leave | ESA requires continuation | Group coverage continues if employee pays their share of premiums. |
| Return to work | Same or comparable position | Reinstate at same rate. Seniority continues during leave. |
What Our Healthcare Payroll Service Includes
| Service | What We Do |
|---|---|
| Pay run processing | Biweekly/semi-monthly. Shift premiums tracked. Overtime at blended rate. Variable hours from scheduling software. |
| Owner salary-dividend optimisation | Annual split calculated for PC. Salary for RRSP/CPP. Dividends for tax efficiency. Payroll configured. |
| Associate payment tracking | Invoices from associates' PCs tracked and paid. No payroll deductions. Business expense. |
| Worker classification review | Every locum, associate and contractor documented with two-factor test. Defensible against CRA. |
| Shift premium and on-call tracking | Evening/night/weekend premiums. On-call standby vs call-in separated. Blended overtime rate calculated. |
| Benefits administration | Taxable vs non-taxable classified on T4s. STD/LTD structure reviewed. Maternity leave benefits tracked. |
| CRA remittances | CPP + EI + tax by deadline every period. Never late. |
| ROE filing | Within 5 days. Maternity coded correctly. Insurable hours calculated. |
| T4 and T4 Summary | Filed Feb 28. Shift premiums, on-call, taxable benefits correct. Reconciled to remittances. |
| Multi-clinic payroll | Central payroll. Cost centre by location. Consolidated remittances. |
10 Common Payroll Errors Healthcare Practices Make
| # | Error | Consequence |
|---|---|---|
| 1 | Locums as contractors when CRA says employees | $30K-$50K reassessment per locum over 2 years. |
| 2 | EI exemption for owner with less than 50% shares | CRA reassesses for missed EI on all insurable earnings. |
| 3 | Hygienists/nurses as contractors | CRA reclassification. Full CPP/EI/tax reassessment + penalties. |
| 4 | All healthcare workers assumed OT exempt | Only regulated professionals exempt. Nurses/PSWs/admin entitled to 1.5x after 44hrs. |
| 5 | Shift premiums not in overtime rate | $42/hr + $3 night premium = OT at $67.50, not $63. Underpayment = ESA complaint. |
| 6 | On-call vs call-in not tracked separately | Overtime inflated or understated. ESA and CRA issues. |
| 7 | Benefits discontinued during mat leave without ESA compliance | ESA violation. Reinstatement + damages ordered. |
| 8 | Health plan premiums reported as taxable on T4 | Employee overpays income tax and CPP. Must be corrected. |
| 9 | Maternity ROE wrong reason code | Must be Code M. Wrong code delays employee EI benefits. |
| 10 | Late CRA remittances | 3%-10% penalty. $7K remittance 7 days late = $490. |
CRA Payroll Audits for Healthcare Practices
| CRA Focus | What CRA Reviews | How We Prevent Issues |
|---|---|---|
| Locum/associate classification | Two-factor test on locums. OHIP billings cross-referenced. | Every relationship documented at engagement. Classification defensible. |
| EI exemption verification | Share register reviewed. 50%+ ownership required. | Share register verified annually. EI applied where required. |
| Taxable benefits | T4s checked for missing parking, group life excess, LTD. | Every benefit classified at setup. T4s include all taxable amounts. |
| Overtime compliance | Hours vs pay cross-referenced. Missing OT = unreported pensionable earnings. | Overtime tracked every pay run. No gap between hours and compensation. |
Why Choose Gondaliya CPA for Healthcare Payroll?
Healthcare Specialists
PC payments, locum classification, shift premiums, overtime exemptions and benefits administration built into every engagement.
Never Late
CRA remittances, T4s and ROEs filed on time every period. No penalties. No interest. No flags.
CRA Audit Defence
Worker classification documented. Benefits classified. If CRA audits, we represent you FREE.
AFFORDABLE Flat Fee
From $125/month. T4s and ROEs included. No hourly billing. 30-Day Money-Back Guarantee.
Transparent Flat-Fee Pricing
| Service | Fee | Includes |
|---|---|---|
| Healthcare payroll (first employee) | From $125/month | Pay runs, shift premiums, overtime, benefits, CPP/EI/tax, T4s, ROEs |
| Each additional employee | $75/month | Same full service per additional employee |
| Owner salary-dividend optimisation | Included | Annual split calculation for PC. Payroll configured. T2 FREE. |
| Monthly bookkeeping + payroll | From $275/month | Bookkeeping ($150) + payroll ($125). HST filing, T2 FREE. |
| T4 and ROE filing | Included | All T4s by Feb 28. ROEs within 5 days. No additional charge. |
| Payroll software setup | FREE | Wagepoint or PaymentEvolution with healthcare shift premiums and benefit categories. |
Know Your Exact Fee Before We Start
Flat fee, fixed in advance. 30-Day Money-Back Guarantee. 60-Day Fees-Matching Policy.
Healthcare Payroll: Cities We Serve
We handle payroll for healthcare practices across every Ontario city and Canada.
Frequently Asked Questions: Payroll for Healthcare Practices
Meet Your Healthcare Payroll Specialists
Sharad Gondaliya, CPA
Founder & Managing Director
Gondaliya CPA Professional Corporation
Sharad manages all healthcare payroll engagements, professional corporation salary-dividend optimisation and CRA audit defence.
Vandana Goel, CPA
Senior Accountant
Gondaliya CPA Professional Corporation
Vandana handles pay run processing, shift premium tracking, benefits classification, T4 preparation and multi-clinic cost centre reporting.
What Our Clients Say
1300+ five-star reviews from business owners across Ontario and Canada.
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Stop Risking CRA Reclassification. Let a CPA Handle Healthcare Payroll.
Professional corporation payments, locum classification, shift premiums, overtime, benefits, maternity leave, T4s, ROEs. From $125/month.