It is very important that entrepreneurs understand not only what a T4 and T5 slip is says Edmonton bookkeeping. But how they need to file them, so that they can avoid triggering penalties. In addition to that, they also need to ensure prior to filing those T4 and T5 slips, that they have permitted their source deductions accurately in order to further avoid penalties as well as triggering a payroll audits in their business.
It is very important that entrepreneurs understand what a T4 and T5 slip is says Edmonton bookkeeping. A T4 slip is where all of the source deductions that an entrepreneur has withheld from their staff and their own paychecks are noted. This means all of the income taxes, CPP, EI that they have withheld from any salaried employees including themselves need to be accounted for. It is also important for entrepreneurs to understand that as an employer, not only do they have these source deductions withheld from their own paychecks, but they also must remit CPP and EI on behalf of the business. All of these amounts are noted on the T4 slip.
The T5 slip on the other hand says Edmonton bookkeeping is where all of the dividends that have been dispersed in the corporation are taken note of. Since only shareholders are allowed to take dividends, only shareholders will trigger a T5 slip being created. Despite the very different information that is being noted on a T4 and T5 slip, is owners need to be aware that they both have the same filing deadline of the last day of February. If an entrepreneur does not file their T4 or T5 slip by this day, they can end up triggering penalties. The penalty for filing late is a dollar amount per employee, per day says Edmonton bookkeeping.
The reason why it is important to ensure that they file their T4 slips on time, because this is how Canada revenue agency will be able to ensure that business owners have paid enough source deductions. Once an entrepreneur files, Canada revenue agency will see the amount of source deductions that they should have remitted, against how much they actually have submitted to Canada revenue agency. If there is a discrepancy, this could potentially trigger penalties as well as a payroll audit.
If an entrepreneur wants to avoid triggering penalties or a payroll audit says Edmonton bookkeeping, a good habit to get into would be for entrepreneurs to calculate their T4 slip prior to the last day in February, and before they submit it, compare the amount of source deductions that they owe against the amount of source deductions that they have paid. If they have inadvertently underplayed says Edmonton bookkeeping, they can simply send payment off to Canada revenue agency prior to filing that T4 slip and avoiding triggering penalties and a payroll audit in their business.
Edmonton bookkeeping says that it is very important for entrepreneurs to understand not only should they avoid filing T fours and T fives late, but that they should be looking at the source deductions prior to filing slips, in order to ensure that they have paid correctly.
Edmonton Bookkeeping | How To File T4 And T5 Slips Properly
The reason why entrepreneurs need to ensure that they are filing their T4 and T5 slips properly says Edmonton bookkeeping is because they calculate the source inductions that an entrepreneur should have remitted to Canada revenue agency. They actually consider not paying source deductions properly as a very serious a fence. The reason why, is because they view source deductions as money being held in trust for the government. If an entrepreneur does not remit the source that actions properly, they literally see it as an abuse of government money. If an entrepreneur uses it to either pay themselves, or pay bills in their business, Canada revenue agency considers this using government money to fund a private corporation.
With how important it is to avoid making mistakes on paying source deductions, an entrepreneur needs to keep two things. How to pay the correct amount, and how to pay on time. Edmonton bookkeeping says that paying on time is simple, as long as entrepreneurs understand what the deadline is. The deadline to submit payroll remittances is the fifteenth of every month, and the month following the day payroll was run. For example, if an entrepreneur has run payroll in October, November 15 is the deadline.
However, Edmonton bookkeeping recommends that entrepreneurs avoid waiting until the fifteenth of the month to submit payroll remittances. The reason why, is because if the make a mistake, or if something happens, they will end up triggering a penalty for paying late. Much better habit to get into, would be for an entrepreneur to submit payroll remittances to Canada revenue agency the same time that they calculate payroll. Not only does this save time, because they already will be calculating source deductions, they will not have to make that calculation again, and risk making an error. Also, by submitting payroll remittances at the same time as running payroll, entrepreneurs are ensuring that they are never running the risk of paying late. Since the source deductions are due after they run payroll, writing them at the same time ensures they will never be late.
They also have to ensure that they are paying the correct amount of source that actions says Edmonton bookkeeping. This means knowing that they have to calculate income taxes, CPP and EI for every salaried employee including themselves. They also need to understand that they are required to pay CPP and EI as an employer, on behalf of the business. However, this still might be confusing to many, therefore they should understand that not only do all payroll and accounting software have the capability to calculate source deductions built into them, but also Canada revenue agency has a program on their website where entrepreneurs can enter payroll information, and find exactly how much source deductions they need to withhold from their staff.
Edmonton bookkeeping says that it is extremely important for entrepreneurs to know the things they have to do to avoid triggering a payroll audit, or being hit with penalties due to incorrectly paying their source deductions. By taking note of these things, they can ensure that they will never have to endure a payroll audit, or risk their business being negatively impacted by having to pay steep penalties.