The payroll maze.

One benefit of working for a large company is there’s an accounting department to do “that.”

By “that,” I mean all the number-crunching paperwork that most of us know little about and are happy to leave in the hands of someone else – until we’re a small business owner and that someone else is us.

One of those tasks is, inevitably, payroll management.


Intuit succinctly describes payroll management as activities in two areas: payroll accounting and administration:

· Payroll accounting includes calculating employee earnings and withholding funds for taxes and other deductions like Employment Insurance and Canada Pension Plan premiums, recording those activities, preparing tax returns and reporting the results to federal and provincial revenue ministries.

· Payroll administration includes non-accounting tasks like managing employee and payroll information and compliance with federal and provincial laws.

Whether you handle payroll yourself, choose to outsource it to an accountant or payroll service or use payroll accounting software like QuickBooks Payroll, reporting and paying payroll taxes are ultimately your responsibility, so it’s important that the process be handled on time.

For more help and guidance in the maze of payroll responsibilities, including an online calculator and payroll tables, you can visit the Canada Revenue Agency’s website and the federal government’s Canada Business Services for Entrepreneurs site. The Canadian Payroll Association is another useful place to help you get started.

By Adam

July 08, 2010