You’ve hired your first Canadian team members, and you’re ready to open your doors on a successful Canadian expansion.

Your team still has a few concerns, though, not the least of which is payroll. Your in-house payroll team has your home country payroll down pat, but Canadian payroll is still a mystery to them.

While you can expect a few stumbling blocks along the way, payroll isn’t something to take lightly. You already know you could land yourself in hot water with the Canada Revenue Agency. Your Canadian team members may not have much tolerance for errors.

Here’s why you should be using a Canadian payroll tax deduction calculator from the start.

Use a Canadian Payroll Tax Deduction Calculator to Get the Right Figures

Canadian payroll tax deductions can be difficult to figure out, if only because there are so many nuances to keep track of.

For example, you’ll need to look at deducting not just income tax, but Employment Insurance and Canada Pension Plan amounts as well. Both CPP and EI must be deducted and remitted to the CRA on a certain schedule.

You want to be sure you’re calculating these amounts correctly. There are maximums to what your employees can pay into their CPP in a year, for example. You must check that you’re calculating the amounts correctly, so your employer payments are accurate as well.

There are also other considerations, such as holiday pay and vacation pay. In some provinces, your employees may also have paid leave.

If you pay bonuses, commissions, or use other forms of compensation, you’ll also need to pay attention to the rules for these types of payments.

That’s a lot to keep track of. The calculator can help.

Keep Your Employees Happy

When you use the Canadian payroll tax deduction calculator, you can keep your employees on both sides of HR happy.

First, the calculator makes it much easier for your team to actually administer payroll. They could use the calculator to quickly and easily calculate the right deductions for every employee.

Next, your employees will be happy too. Nobody wants to see their paycheck come in with the wrong amount stamped on it. An overpayment could mean the employee has paid too much or will be docked during the next pay period. An underpayment is often even more upsetting.

Finally, since the calculator makes it easier to conduct Canadian payroll, you’ll be able to pay your employees on time.

Avoid Penalties and Audits

The other major reason to use a Canadian payroll tax deduction calculator is to avoid penalties and fees from the CRA.

The CRA assesses penalties on payroll tax remittances that are incorrect. If you underpay, you’ll likely be subject to a penalty, on top of paying the additional tax you owe.

There are also fees for late payments. Using the calculator makes it easier to administer payroll, which paves the way for it to be completed on time. In turn, you know you’re meeting your deadlines for remitting payments.

Finally, submitting the correct amounts on time helps you avoid further scrutiny from the CRA. If you’re constantly underpaying or always late on your payments, the tax collector may decide they want a closer look at your books.

Audits are time-consuming and often costly. You might need assistance to get through one, especially if your records aren’t up to standard. You could even face jail time if the CRA determines your record-keeping isn’t in line with Canadian law.

Simply paying your fees on time and submitting the correct amount can help you avoid this situation altogether.

Get More Help When You Need It

The Canadian payroll tax deduction calculator is a handy tool, but sometimes you need additional help. Get in touch with the experts and discover an easier way to handle your Canadian payroll.