Employers, trustees, and payers are responsible for deducting Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums and income tax from remuneration or other types of income you pay. After making the deductions, you remit, plus your share, to the CRA. You are responsible for reporting the employee’s income and deductions on the appropriate information return.
The Payroll Steps
As an employer, trustee, or payer it is important to understand and follow each step to ensure you are not assessed penalties or interest.
Step 1: You have to determine if you are an employer, trustee or payer.
Step 2: As an employer, trustee, or payer, you will need to open a payroll account.
Step 3: An employer, trustee, or payer must calculate any CPP contributions, EI premiums, and income tax deductions based on the amounts paid out. Next you will have to calculate your share of CPP and EI.
Step 4: The employer, trustee, or payer must remit the CPP, EI and income tax deducted, along with their share of CPP contributions and EI premiums.
Step 5: The employer, trustee, or payer is responsible for reporting all income and deductions on the appropriate information returns.
Throughout the process proper records must be maintained.
National Tax Service has over twenty-five years experience managing payroll and payroll records for businesses of all sizes.