The very important that entrepreneurs create a plan on what they are going to do to help ensure that they are electing and remitting source elections accurately says Edmonton bookkeeping. Zigzag where was famous for saying ìwhen you stop planning and preparing, you stop learning.î Not only can plans help an entrepreneur ensure that there doing things consistently, it can also ensure that they can hand that task off to other staff so that they can focus on growing the business. That having plans in place, an entrepreneur is not able to hand off tasks to others and focus on what is most important in their business. When it comes to learning how to calculate source deductions and remit payment to the Canada revenue agency, having a plan in place is very beneficial to ensure it is always done accurately.
The reason, why it is important for entrepreneurs to avoid making errors in this area, is because CRA views remittances as funds held in trust. If business owners do not submit them on time, or in the correct amount, they view this as misusing the governmentís money and are very aggressive in collecting it. Ten bookkeeping says that directors of the corporation are also personally liable for payroll taxes that are owed to Canada revenue agency, therefore if any mistakes are made, and they owe CRA remittances, or penalties, they can by themselves personally at risk. Therefore it is very important that entrepreneurs avoid making mistakes.
In addition to being personally liable, the penalty for late on paying payroll remittances is 20% interest per day. This is extremely high, and the reason why says Edmonton bookkeeping is so that it acts as a deterrent. Business owners are afraid of the penalty, they will not do anything to cause them to get hit that penalty. There are many strategies that entrepreneurs can use in order to help them avoid missing the deadline. Knowing when the deadline is is important to ensure that they can submit their payments to Canada revenue agency well before that deadline so that they do not have to worry that unforeseen circumstances may cause problems that would keep the payment from going through. Problems with computers, electronics, and even the Internet can keep Canada revenue agency from saving the payment on time, and potentially charging an entrepreneur high interest.
With how high the penalties are associated with remitting source deductions incorrectly, entrepreneurs should be aware of how to do it accurately, and then create a checklist or plan that can ensure that they can do it consistently, or they can handoff to anyone in their business who can then all the directions and do it without mistake as well says Edmonton bookkeeping. When entrepreneurs create this plan, they will be able to focus on the most important priorities in their business, jar the sales and marketing, as well as all the activities they need to do to ensure that their business continues to grow.
Edmonton Bookkeeping | How To Remit Source Deductions Correctly
There are not many steps that an entrepreneur needs to remember in order to remit source deductions correctly says Edmonton bookkeeping. However, the penalties for doing it incorrectly are very severe, therefore not nor should make a great effort to ensure that they are doing it accurately every time, to avoid these penalties. Creating a plan will help ensure that an entrepreneur is able to follow their own directions to avoid making mistakes, but also so that they can hand off the duties to another director of the corporation, or give it to a staff member will be able to follow directions, and do accurately to avoid them incurring penalties as well.
One of the first things that an entrepreneur must know is the correct amount of source deductions that they should be calculating to withhold from their employee’s checks. There are actually five components says Edmonton bookkeeping that must come off of their employee’s checks, their own checks, and then be submitted on behalf of the business. By being aware of all of these components will help an entrepreneur ensure that their calculating source deductions correctly. The five components are income tax CPP and EI. All these will come off of the employee’s paychecks. Then, there is the employer portion of CPP and EI, and the EI is actually one point 4% higher than the employee’s portion. Finally, if an entrepreneur is paying themselves a salary, they also need to withhold from their own paycheck CPP and EI as well.
Once they know how much source deductions to withhold, Edmonton bookkeeping says the next thing that entrepreneurs need to know is when to submit the payment. The best practices for the entrepreneur to do the same time that they run payroll, not only because it is easy because they are thinking of it and calculating the right payment, but also so that it can help entrepreneurs avoid paying late. The deadline is the fifteenth of the month following the month that payroll was run. However, entrepreneurs who get into the habit of submitting remittances at the same time that they run payroll, they will never be hit with a penalty for filing late. Some entrepreneurs may not want to remit the same time, because they are running out of money in their business, but if they come up with a cushion of savings to help pay their payroll remittances ahead of time in case a financial difficulty, can even avoid this issue.
When business owners understand how to calculate source elections, and how to pay them on time, they can create a plan that they can follow consistently in their business to ensure that they are calculating and paying source deductions correctly every time. When they need to hand that duty off to an employee, so that they can concentrate on growing their business, having this plan in place can help ensure that a business owner does not have to worry that an entrepreneur will make mistakes, as long as they are following the plan. This can help ensure not nor never has to pay penalties or get audited for paying incorrectly.