Many entrepreneurs know how important it is to create a plan or checklist in their business says Edmonton bookkeeping. Let only does that mean they can do things consistently, and not miss important aspects. But also, so that they can hand that task off to other employees or even directors and ensure that it is being done accurately as well. Zigzag where has Edmonton you stop planning in pairing, stop winning. Therefore, very important that entrepreneurs create a plan that will help them ensure that they are calculating payroll remittances accurately and submitting them to the Canada revenue agency on time.
One of the first things that entrepreneurs should take note of, is that Canada’s revenue agency is extremely protective of payroll remittances. Edmonton bookkeeping says that they view this as trust funds, and money that entrepreneurs. Therefore, the penalties are very stiff when entrepreneurs do not remit the payments correctly. Therefore, even though it is not difficult to learn, entrepreneurs need to be aware of what they need to do so that they can be doing it consistently, to avoid penalties and audits.
One of the first things that a business owner should be aware of, is what the deadline for submitting source deductions to Canada revenue agency is. The fifteenth day of every month is the deadline, and payrolls that are run in the previous month will have to pay source deductions by the fifteenth of the following month. This means, if an entrepreneur has run payroll in May, the source deductions are due by June 15. This deadline is very important to take note of, because if entrepreneurs miss payments by one day, the potential penalty is 20% interest charge calculated on a daily basis.
The penalty for late payments is so high so that it acts as a deterrent. If business owners are afraid of the penalty, they will work extra hard to ensure that they are remitting source deductions on time.
When the way that entrepreneurs can ensure that they are remitting source deductions on time consistently says Edmonton bookkeeping, is to submit them at the same time that they run payroll. Not only does this ensure that an entrepreneur will forget, but it also saves time, because and entrepreneurs already calculating the amount that needs to be withheld, all they have to do is make the payments to Canada revenue agency for that amount. By ensuring that there remitting source that actions along with creating their payroll will safeguard an entrepreneur from ever being hit with a penalty for paying late.
By being aware of the deadline, as well as the penalties for being late can help an entrepreneur create a plan in their business that will have them consistently paying ahead of time so that they can avoid problems. This peace of mind that entrepreneurs can get from having a great plan in place to allow them to focus on all of the tasks they need to do to grow their business.
Edmonton Bookkeeping | Why Creating A Payroll Checklist Is Important
Checklists are an important way that entrepreneurs are able to scale up their business says Edmonton bookkeeping. By making tasks duplicatable and easy to follow ensures that an entrepreneur can hand off various tasks to employees as needed so that they can spend their time growing their business. Running payroll, and calculating source deductions is an example of one of these things that entrepreneurs can create a checklist or, so that they can be taken on by anyone, and done consistently and accurately.
One of the first things that entrepreneurs can create in this document is a list of all of the components of a Canada revenue agency remittance. There are five various components that business owners need to be aware of, if they miss anyone, they will underpay remittances to Canada revenue agency which could trigger an audit. These five components are the employee portion of taxes which include income tax, CPP and EI. If an entrepreneur is paying themselves a salary, they need to ensure that they are withholding CPP and EI from their own paycheck. Also, business owners need to be aware that their business owes contributions as well for CPP and EI. It is also important that an entrepreneur takes note that their businesses’ EI contribution is going to be 1.4% higher than the employee’s portion of EI.
If an entrepreneur ends up underpaying their source that actions throughout the year, they should expect to not yet a call from CRA to let them know says Edmonton bookkeeping. The only time they are going to be notified by Canada revenue agency if they have underpaid is after they have filed their T4 slips. Canada revenue agency will be able to see the amount that they should have submitted matched against what they have paid. If the two do not match up, Edmonton bookkeeping says that Canada revenue agency might issue a letter asking an Edmonton in order to explain why. If an entrepreneur is unable to explain why, it may trigger a payroll audit.
In order to help ensure an entrepreneur is avoiding being hit with an audit at the end of the year, entrepreneurs can either pay an additional amount in source deductions every month, in order to give themselves a buffer to avoid underpaying. Or, Edmonton bookkeeping says that entrepreneurs can simply look at their T4 slip prior to filing it with CRA. If they see that they have underpaid, they can simply payout lump-sum to Canada revenue agency for filing their T4 slips. That way, they can avoid triggering an audit for underpaying.
When entrepreneurs create a checklist for how to calculate and remit source deductions accurately, though be able to create a duplicatable system that matter who looks after this task can do it accurately, helping an entrepreneur avoid penalties or audits. This means that an entrepreneur will be able to focus more on scaling up their business and accomplishing all of the tasks they need to do in their business to allow their business to grow.