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Need help calculating payroll for first employee - Canada?

I had to hire my first part-time employee. She works about 15 hours a week and helps me in my administrative tasks.

My business is registered as a sole priortorship and my employee and I agreed that she would be paid $125 net on a weekly basis. So I went to the Canada Revenue Agencies website to calculate the correct payroll deductions.

According to the calculations, her weekly pay would be $131.00 gross, CPP 3.15, EI 2.36. I'm not sure if this is correct. It's difficult to get a hold of Canada Revenue Agency by phone.

I want to make sure that I'm calculating the correct payroll deductions, so Revenue Canada won't penalize me. And also do I remit these deductions to the government on the 15th of the month as a new remitter?

Please advice and if any small business owners from Canada can answer, that would be great.

Hello,

The amounts that you have indicated are correct. I confirmed them with the downloaded version of Tax on Diskette (TOD) from CRA.

As a regular remitter you are required to remit the source deductions on or before the 15th of the month following the month in which the deductions were made (Feb 15th for January deductions). Remember that you're responsible for the employees deductions as well as the employers portions.

If you haven't already done so you will need to contact CRA to open the payroll remittance account. It should be the same 9 digit number as your GST account only with a P instead of a T after the R.

Hope this helps!

Hi,

Use a payroll service, in my case I pay 10 per week and they handle all of the tax deposits that need to be made and offer direct deposit to my 1 household employee, they also handle all of my quarterly and annual returns.

Hope this helps

sounds like you have it right.
you should get the TOD, that someone else mentioned. if you go into a CRA office, they have them there on cd-rom that you quickly install.
otherwise use tables on website.
in case you were wondering why you are not required to withhold income tax ( along with the CPP and EI), the reason is that $131 per week would only amount to about $6000 per year gross. This amount is under the first income level, so no tax will be paid.

you don't need a payroll service -- it would be a wasted an unnecessary expense for 1 p-t employee.

as for remitting, you pay your deductions on the 15th of the following month. you must remit two times the CPP withheld (her share and yours) and 2.4 times the EI deducted (her share and your 1.4 x share).

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