If entrepreneurs know how important it is to remit source deductions properly, but they do not know how to do it is Edmonton bookkeeping they can still be at risk of penalties and audits. Therefore, there are several things that entrepreneurs can learn in order to help them hold the correct amount of source deductions and submitted consistently and on time. When they learn how to do this, entrepreneurs can ensure that they can run payroll regularly, and never have problems with the Canada revenue agency.

One of the first questions that entrepreneurs have when it comes to running payroll, is what does the employer contribution of CPP and EI of 7.37% mean? This means that entrepreneurs also have to remit source deductions on behalf of the business. Many entrepreneurs are not aware of this in the beginning and know that they have to withhold to CPP and EI as well as pay it themselves when they pay themselves a salary, but Edmonton bookkeeping says that entrepreneurs also have to pay the employer portion on behalf of the business. This works out to an additional 7.37% of source deductions.

The next question that entrepreneurs often have when they are learning to run payroll is what are the five components of Canada revenue agency remittances? Edmonton bookkeeping says that entrepreneurs should be aware that there are five different deductions that they must be withholding and submitting to Canada revenue agency every single payroll. These are: employer portion of CPP as well as employee portion of CPP, employer portion of EI as well as employee portion of EI, as well as income tax. It is important to note that the employer portion of EI actually ends up being 1.4% more than the employees’ portion. Entrepreneurs need to be aware of all of these amounts so that they can collect and remit the correct amount every time.

The third question that business owners often have is when is the payroll remittances deadline? This is a very important question for entrepreneurs to know the answer to ensure that they are remitting source deductions prior to that date. Edmonton bookkeeping says that the deadlines for remittances are the fifteenth day of every month. Whichever month the payroll was in, the deadline is the fifteenth of the following month. That means any payroll that wa in January has the source deductions due to be remitted by February 15.

However, it is recommended for entrepreneurs to not wait until that deadline to file, the earlier the better and the best practices actually being for an entrepreneur to remit source deductions the same bay that they run payroll. They are already thinking about payroll, calculating remittances, it is very easy to submit the payment to CRA at the exact same time. That only are they saving time, but there ensuring that they will never remit their source deductions late if they implement this strategy in their business.

By being aware of how much payroll tax to withhold and remit, and when that deadline is, can help ensure that entrepreneurs are paying their payroll tax correctly. By doing this consistently as soon as they start running payroll in their business can help entrepreneurs avoid penalties and audits that could negatively impact their business.

Edmonton Bookkeeping | Commonly Asked Questions About Source Deductions

There are several questions that entrepreneurs have about appropriately collecting payroll taxes and remitting to Canada revenue agency according to Edmonton bookkeeping. By getting the answers to these questions early on in their entrepreneurship can help ensure an entrepreneur never gets hit with a penalty or an audit because they remitted taxes incorrectly.

The first thing that entrepreneur should be aware of, is the potential penalty for being even a single day late on payroll remittances is 20%. This is even more than the interest rate on a credit card says Edmonton bookkeeping. The reason it is so late hi, is to act as a deterrent. Business owners should be fearful of this high penalty, so that they can ensure that they are never remitting late or the wrong amount.

The next question that many entrepreneurs ask is how does the Canada revenue agency know that they are behind on payroll tax? This is especially true for entrepreneurs that have been meeting the deadline, but have not been remitting the correct amount because they calculated the source deductions incorrectly. How they will find that it was is evident bookkeeping is when an entrepreneur completes their T4 filing. This will have the amount of how much source deductions and entrepreneurs should have submitted to the Canada revenue agency. And they will simply compare that against but they have already remitted. If the two totals do not match, Canada revenue agency will send the business owner a letter asking to explain why, and if not been are cannot explain it this will trigger an audit.

An entrepreneur might trigger this action sooner if they miss one of the deadlines of when to submit payroll tax by. Therefore, entrepreneurs need to ensure that they are remitting payment on the fifteenth of every month. However, if an entrepreneur is preparing their T4 filing says Edmonton bookkeeping and discovers that they have been remitting the incorrect amount, they have until January 15 in order to top up the rest of the money that they owe Canada revenue agency. If they have been paying incorrectly, and send the correct amount prior to filing their T4, that should protect them against any actions from CRA.

When business owners get the answers to all of their questions about how to properly remit payroll taxes, that business owners can avoid penalties and audits in their business. It should be very simple and easy for business owners to run payroll in their business, therefore Edmonton bookkeeping recommends that entrepreneurs learn as soon as they start running payroll have of these issues so that they can continue to grow their business and be successful.