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You pay your employees wages, bonuses, commissions, vacation, or tips. You provide them with certain taxable benefits, such as personal use of a vehicle or allowances. You must deduct and pay source deductions as well.
Employers are responsible for deducting the following amounts:
- Canada Pension Plan contributions
- Employment insurance premium
- Federal income tax
- Provincial and Territorial income tax
Employers are to remit these deductions to the Canada Revenue Agency, along with their share of contributions under the Canada Pension Plan and Employment Insurance contributions.
You may be required to make other payroll deductions—things like contributions toward a private pension plan or union dues—but those deductions, based on previously negotiated contracts and work conditions, are not remitted to the government.
Payroll Deductions Amounts Depend on the Province of Employment
While federal income tax remains the same across the country, the provincial and territorial tax rates change.
This establishes the need to determine an employee’s province or territory of employment to ensure you deduct the right amounts. For example, if your employee lives in Ontario but is employed at your New Brunswick facility, you would use the New Brunswick payroll deduction tables.
The situation is different in Quebec, which administers its own pension plan.
- The Quebec Pension Plan, the Canada Pension Plan
- The employer shall contribute to the Quebec Parental Insurance Plan
- Provincial income tax for Quebec is remitted to the Revenue Quebec
- Employment insurance is withheld at a lower rate
Steps For New Employers
As for the new employers, they must first open a payroll program account to remit deductions to the CRA.
The employer will need to ask the employee for his or her social insurance number and complete Form TD1—Personal Tax Credits Returns.
Payroll deductions are the government’s property, and the amounts collected must be kept separate from the operating capital of your business. These amounts must not form part of assets under liquidation, assignment, receivership, or bankruptcy. It is strongly recommended that all amounts withheld be deposited into a separate bank account until it’s time to remit them.
Year-end: You must file a summary of all employees’ income and deductions. You must report the employee’s income and deductions on the appropriate T4 or T4A slip. There are two copies to go to the employee, one for your records and one to send to the CRA for all the T4/T4A slips for your employees. These are due by the last day of February of the following year to avoid penalties.
How often are deductions remitted to the governments?
The frequency of payments to the government varies. Payments may be submitted monthly, on the 15th day of the following month, or quarterly, on the 15th of January, April, July, and October. The employer can also make accelerated remittances up to two or four times a month.
Do I have to withhold deductions if I pay myself a salary?
If this is an unincorporated business, such as a sole proprietorship or partnership, these deductions are not remitted to the CRA through the payroll account. Instead, payments are due when the T1 income tax and benefit return is filed unless the sole proprietor or partner must pay in installments.
The salary shall be treated as employment income for businesspeopleemployed by their incorporated business, and deductions will be required. As long as the entrepreneur has more than 40% of the common shares with voting rights, then he or she shall be exempt from Employment Insurance premiums and, therefore, not entitled to Employment Insurance benefits. Nonetheless, there are Employment Insurance special benefits for self-employed persons.
Conclusion
Receiving paystubs online in Canada has been made very easy, convenient, and efficient for employees and employers. Online tools, such as a paystub generator, generate digital paystubs quickly and accurately. Many offer Canada-specific pay stub templates to ensure compliance with local standards.
Some offer a free pay stub generator for small businesses and individuals in Canada. Leveraging online resources and managing and retrieving your pay stubs has never been easier, and it will certainly encourage better record-keeping of financial matters.
FAQ's
How can I access my paystubs online in Canada?
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You can access your paystubs online through your employer's payroll portal, a payroll service provider, or government websites like CRA My Account.
What information do I need to access my online paystubs?
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You'll typically need your employee ID, password, and sometimes additional verification like a security question or a PIN provided by your employer.
Are my online paystubs secure?
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Yes, most online paystub systems use secure login procedures and encryption to protect your personal and financial information.
What should I do if I can't find or access my paystubs online?
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Contact your HR department or payroll administrator for assistance. They can provide access details or issue a copy of your paystubs directly.
