Business owners should avoid triggering a payroll audit by learning how to remit source deductions correctly says Edmonton bookkeeping. Not only are payroll audits time-consuming and disruptive, they can also be expensive, and end up with an entrepreneur being hit with expensive penalties that they be difficult to pay. Therefore, an entrepreneur should start to learn how to calculate and remit payroll taxes correctly, as soon as they start taking a salary from the business, or once they start making plans to hire staff for the first time.
If knowledge manure falls behind on their payroll remittances, or if there calculating the incorrect amount and not remitting enough, Canada revenue agency will be able to see that a not manure behind on their payroll taxes when they file their T4 slips. The amount that an entrepreneur owes will be written on the T4 slip, and Canada revenue agency can match that against an entrepreneur has paid so far. If the amounts do not match, Edmonton bookkeeping says that this could trigger a payroll audit.
In order to avoid triggering an audit, an entrepreneur can look at their T4 slips, and before they submitted, they can do the calculations themselves. Looking at how much they should have submitted, against what they already have. If there is more than they owe, prior to submitting their T4 slip to CRA, not in our can make that lump-sum payment and avoid triggering an audit.
Of course, the best way that an entrepreneur can avoid triggering a payroll audit in their business is to pay the correct amount of source deductions the first time. Learn how to do this says Edmonton bookkeeping requires an entrepreneur being aware of all five components of CRA remittances. In addition to the income tax that must be withheld from employees checks, there is also the employee and employer portion of CPP, the employee and employer portion of EI. Many entrepreneurs are not aware in the beginning of their business that not only do they have to pay CPP and EI from their own paycheck, their business also has to remit CPP and EI as well. Not only that, the employer portion of EI is actually one point 4% higher than what the employees pay. By being aware of all of these components can help ensure that an entrepreneurís calculating payroll taxes correctly, and remitting the correct amount from the beginning.
By learning how to calculate source deductions accurately, can help ensure that an entrepreneur does not run behind on their payroll tax. If they do not run behind is not bookkeeping, they should never trigger a payroll audit. By being well-informed on how to do this accurately, can help an entrepreneur ensure that they are not paying penalties or inconveniencing their business with an audit, and they can continue growing their company and adding more employees their payroll. When an entrepreneur learns how to do this early on in their business, they can avoid whisking even higher penalties they may receive if they have a large staff and the wind on their payroll remittances.
Edmonton Bookkeeping | What Will Trigger A Payroll Audit
Because many entrepreneurs do not have previous business ownership experience when they start their own business says Edmonton bookkeeping, they may not know all of the roles associated with calculating and submitting payroll tax properly to Canada revenue agency. Not only is it important that they are knowledgeable about how much payroll taxes they need to submit, but also be remittance deadline so that entrepreneurs can ensure that they are paying the correct amount before the deadline and avoiding penalties.
Most small businesses are required to have their payroll remittances submitted to Canada revenue agency by the fifteenth day of the month. Whichever month the payroll is in, the deadline is in the following month. That means entrepreneurs need to ensure that they are remitting source deductions for the previous month prior to the fifteenth. Some businesses with extremely large payrolls can remit their source deductions quarterly, but most businesses will may need to worry about the fifteenth deadline for their business.
Even though the deadline is the fifteenth, Edmonton bookkeeping recommends that entrepreneurs never wait until the fifteenth to submit remittances. If they are waiting, there could be a number of things that would go wrong that would cause them to file late. If there is a problem with their computer, with their email or the Internet, they could end up not having their remittances received on time. Even things like personal emergencies or weather could cause an entrepreneur to miss the filing deadline, therefore it is very important that they learn to pay well before the deadline.
The potential penalty for being even a single day late is 20% on the total amount. This is an amount higher than high-interest credit cards. That only is this the penalty for being a day late, but that interest amount is charged every day until the entrepreneur has paid in full. This huge amount that works to be a deterrent to help ensure that entrepreneurs remit on time, and avoid this penalty.
In order to help an entrepreneur avoid remitting late, and avoid getting went to submit payment, Edmonton bookkeeping recommends that entrepreneurs send their payment to Canada revenue agency at the same time that they are running payroll for their own staff. Since there already doing the calculations and writing checks to their staff, they can simply create another payment to the Canada revenue agency and submit everything at the same time. By doing this, entrepreneurs will never run the risk of paying late, or forgetting to pay at all.
When entrepreneurs are aware of how to calculate and remit payroll taxes accurately and on time, not only can they avoid penalties and audits, they can create a plan that can ensure that they are doing this consistently and accurately and that they can hand the task off to another director were an employee, to allow an entrepreneur to focus on the strategic priorities they need to accomplish in order to grow their business.