8 Reasons to Outsource Payroll at your Company
Tax | September 27,2021
When you run a small business, sometimes it just makes sense to hire outside experts. Managing payroll is one such instance – because payroll can cause you a lot of grief if you don’t get it perfect.
Here are eight reasons why outsourcing payroll is a smart idea:
Your time is valuable: It’s much better to spend your day generating new business, executing your strategy, or coming up with product ideas. Payroll is a routine and dull chore – there’s no point in dedicating your precious time to it. It can take several hours to run each payroll. Think about the last time you did it. Was it any fun?
Avoid penalties: A payroll service takes care of remitting payroll taxes and income tax deductions. The Canada Revenue Agency heavily penalizes companies that fail to file on time or do not pay the appropriate amount. The penalties can be 10 percent of your remittance or more. It only takes one or two CRA fines to cover the cost of a payroll service.
The staff loves direct deposit: Your payroll service will automatically deposit your employees’ funds into their bank accounts. Each person receives a detailed stub explaining their deductions. Team members appreciate not having to go to the bank or an ATM to deposit an old-fashioned cheque.
Guaranteed accuracy: Employees are counting on you to be paid fairly and accurately. You don’t want the grief of staff complaining that you have made an error on their paycheque. In the unlikely event of a mistake, the payroll company will take responsibility for it and fix it.
Up to date: The payroll accounting software is always right. It automatically calculates CPP, EI, and tax deductions. It can be set up to allow for RRSP contributions or charitable donations. If the government makes a change to any of the payroll or income tax rates, the software updates instantly. You do not need to track these updates yourself.
Track vacation and other pay: Let’s face it, no one wants to deal with a disgruntled employee who didn’t get paid while on vacation or missed out on a sick day benefit. The payroll provider will take care of these records for you. If an employee leaves the company, it automatically generates a Record of Employment (ROE). There’s no end-of-year rush to produce T4s for employees.
It grows with your business: As you build your company, your payroll service can easily accommodate new employees or new benefits such as group RRSP deductions.
It cuts overhead. You may currently have an employee who has the responsibility to process payroll. With outsourcing, you may not need this person, or you can transfer them to revenue-generating tasks.
Consider taking the burden of payroll off your shoulders for the betterment of your business, and make sure you choose a reliable payroll service provider to give your business the competitive edge.
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