Automate Payroll Processing Calculations

Manual payroll processing with spreadsheets miscalculates CPP contributions, EI premiums, and Ontario provincial tax brackets more often than you realize. Automated payroll processing through Wagepoint or PaymentEvolution applies current CRA payroll tables every pay cycle. Eliminating calculation errors in your payroll processing prevents trust account imbalances that trigger CRA reviews.

Remit Source Deductions on Time

Your payroll processing must include timely remittance of CPP, EI, and income tax deductions by the 15th of the following month. CRA charges 3% on first-time late payroll processing remittances and up to 10% on repeat offences, plus daily compound interest. On-time payroll processing remittances are the easiest penalty to avoid.

Classify Every Worker Correctly

Misclassifying an employee as a contractor to bypass payroll processing deductions is a top CRA audit trigger. If CRA reclassifies the worker, your corporation owes all unremitted CPP, EI, and income tax retroactively plus penalties. Proper worker classification within your payroll processing protects you from this costly reassessment from the first paycheque.

Process T4 Slips by February Deadline

Your payroll processing must produce T4 Summary and individual T4 slips filed with CRA by the last day of February. Late payroll processing year-end filings trigger penalties of $100 per day up to $7,500 for each failure. We generate and file all payroll processing year-end slips so this deadline is never missed.

Include Taxable Benefits in Payroll Processing

Company vehicles, employer-paid group insurance, parking, and employee loans must flow through your payroll processing as taxable benefits on each T4 slip. CRA auditors review T4s for missing taxable benefits and reassess both employer and employee. Accurate payroll processing of benefits avoids these reassessments and the penalties that come with them.

Reconcile PD7A to Payroll Processing Records

CRA sends PD7A statements confirming remittances received for each period. Your payroll processing records must match every PD7A balance exactly. Discrepancies between your payroll processing books and CRA's trust account trigger compliance reviews and additional penalties. We reconcile every PD7A against your payroll processing output before the next cycle runs.

File ROEs Within Five Calendar Days

When an employee leaves or has an earnings interruption, your payroll processing must generate a Record of Employment filed electronically within five days. Late ROE submissions from your payroll processing delay former employees' EI benefits and flag your CRA payroll account. We file every ROE through ROE Web as part of standard payroll processing.

Deduct Employer Payroll Costs Fully

Your corporation's share of CPP, EI, WSIB premiums, and Ontario employer health tax are all deductible on your T2 corporate tax return. Many businesses undercount these payroll processing costs at year-end, leaving legitimate deductions unclaimed. Complete payroll processing records ensure every employer contribution reduces your corporate tax bill accurately.

Choose the Right Payroll Processing Frequency

Your payroll processing schedule — weekly, biweekly, semi-monthly, or monthly — directly affects cash flow timing and CRA remittance deadlines. Businesses with irregular revenue benefit from semi-monthly payroll processing to align pay dates with cash inflows. We configure your payroll processing frequency to match your revenue cycle and minimize cash flow strain.

Integrate Payroll Processing With Bookkeeping

Your payroll processing must sync directly with QuickBooks Online or Xero so wages, deductions, and employer contributions post to the general ledger automatically. Disconnected payroll processing creates discrepancies between your bookkeeping and CRA records that surface during T2 corporate tax filing. Integrated payroll processing eliminates manual journal entries and reconciliation errors.