One of the most important things that an entrepreneur can do in their business, is create plans so that they can create efficiencies in their business as well as be able to scale their business up says Edmonton bookkeeping. This is especially true when it comes to running payroll, and calculating source deductions. Not only can creating a plan help an entrepreneur ensure that they can do it consistently and accurately every time and handed off to other directors of the corporation or employees to do correctly every time. But also, because the penalties for submitting remittances late, or not remitting the correct amount or so high, that is very important that entrepreneurs ensure that they as well as anyone else who runs payroll does it accurately on a consistent basis.
For example, the potential penalty for even being a single day late on payroll remittances is 20% interest charged per day. This is much higher than many high-interest credit cards and is a huge penalty that may be very difficult for entrepreneurs to pay. Edmonton bookkeeping says the reason why this is such a high penalty is to act as a deterrent. If entrepreneurs are sufficiently scared of this penalty, they will do everything in their power to avoid paying source deductions late.
One of the things that an entrepreneur can do to ensure that they are never remitting payroll late, is to create a payroll plan that has them paying source deductions at the exact same time as they run payroll. This makes the most sense, because an entrepreneur is already creating payments to their employees, and calculating the source deductions that to submit another payment but to CRA is fast, easy, and most importantly will avoid an entrepreneur paying late.
The reason why this practice will ensure an entrepreneur never pays late is that the source deductions are due after payroll is run. In fact, the month that the payroll was run, the source deductions are due to be paid on the fifteenth of the following month. If an entrepreneur does this all of the same time, there will never be an instance that they pay late. By creating this plan, entrepreneurs can ensure that they, or whoever is running payroll in their business is avoiding that huge penalty for late paying.
By being aware of what is required to run payroll, and calculate source deductions ahead of time can help an entrepreneur create an efficient and effective plan. This can help business owners scale up their business, and hand this task off to someone else so that business owners can focus on accomplishing all of the strategic priorities they need to accomplish in their business in order to grow. Plans and checklists and extremely important way that entrepreneurs can ensure that they are able to grow their business and become successful. Therefore, payroll and source deductions is one example of how lodgment or can create those efficiencies in their business.
Edmonton Bookkeeping | Creating A Plan To Remit Payroll Taxes Correctly
many entrepreneurs are aware of how important creating plans and checklists are in their business says I am ten bookkeeping. These the tools that are going to allow an entrepreneur to be able to scale up their business, and hand off certain tasks to others they can focus on the most important activities they need to do to ensure their business is continuing to grow. This can be extended to payroll duties and ensuring that they are calculating source deductions accurately, and submitting them correctly and on time. By being aware of what is required, and creating a checklist can help ensure that an entrepreneur can avoid penalties associated with doing this incorrectly, the matter who looks after this task in their business.
One of the first things that an entrepreneur should include in this plan or checklists that they are creating, is having a list of all of the various components of Canada revenue agency remittance. There are five in total, some that must come off of the employee’s checks, some that come out of the employerís checks if they are paying themselves salary, and a portion that not nor must pay on behalf of their business. But the employee will have to pay according to Edmonton bookkeeping is the income tax, CPP and EI. If an entrepreneur is paying themselves a salary, they also must withhold CPP and EI from their own paycheck. As well, an entrepreneur must pay CPP and EI on behalf of the business, however, it is important to note that an entrepreneurís contribution from their business is going to be one point 4% higher for EI then their employee’s portion.
If a business owner does not calculate these remittances correctly, they will be underpaying the Canada revenue agency. Unfortunately, the CRA will be telling an entrepreneur that they are not remitting the correct amount throughout the year. The way that Canada revenue agency finds out that a business is behind, is when they file their T4 slips. Written on the T4 is the amounts they should have remitted, and Canada revenue agency will simply match that against what an entrepreneur has paid. If the totals do not match, CRA might send a letter asking a business owner to explain the discrepancy, and it might also simply trigger an audit.
If business owners want to avoid triggering an audit, they should ensure that there calculating their source deductions correctly. However, Edmonton bookkeeping says it is also great practice, and should be put into it onto the manures checklist to review their T4 slips prior to submitting it to Canada revenue agency. Should be able to see how much they should have submitted throughout the year, and if there is a difference, they should make a lump-sum payment to Canada revenue agency prior to filing their T4 slip. That way, one CRA gets that paperwork, there will be a discrepancy, and they will not trigger an audit in their business.
By understanding what causes a payroll audit can help not nor create in their plan or their payroll checklist how to avoid triggering that audit, and what they can do prior to filing their T4 slips to ensure that they are paying the correct amount. Edmonton bookkeeping says that this plan can ensure that the entrepreneur is doing it correctly, and whoever they hand this task off to will build to do it accurately so that a business owner has peace of mind that they will get hit with penalties or audits while they focus on the strategic priorities they need to grow their business.