Tips and Tricks

Payroll / Tips and Tricks — 1 Comment
25
Oct 11

Payroll basics for start-up companies

By Kevin Zimmer, Payroll Specialist at IBEX

Payroll challenges begin before you even hire your first employee.  After that, things just get more and more complicated…

Before Employees

Before you hire your first employee, the biggest issue is making sure you take the Canada Pension Plan (CPP) and income tax into account on whatever money you yourself take out of the company.   This is where many new entrepreneurs get tripped.   Many go for a while without getting paid at all.  Then, when profits start to allow, they start taking some money for themselves. The problem comes at the end of the year when you have to report the income to Revenue Canada and have to pay CPP premiums and income tax on whatever you have taken out.  If you have taken out all you can and there is not much or any spare cash left (and this is often the case) you may not have the cash to pay the government.  The result – late payments and penalties – not fun.

The right way to handle this is to pay the CPP and tax as you go.  Do not wait until you file your personal tax return. Or, make sure you set aside at least 35% (call us or use the online calculator on the CRA website if you want a more exact estimate) of whatever you take home so that you have the cash to pay at the end of the year.  CRA will start to insist on quarterly payments to them if you do the “pay at the end approach”, especially as the amounts get larger – over $3,000 in tax due at the end of the year will trigger a requirement to pay CRA quarterly.

One benefit of owning your own business is that you do not have to pay Employment Insurance (EI) premiums on your earnings, only CPP and income tax.  At least there is that!  Although, if you get pregnant or things don’t work out – you won’t be able to access EI either.

After Employees

Once you hire someone, things get more complicated.  You are required by law to deduct appropriate EI, CPP and tax amounts from just about anything you pay your employees.  You are also required to submit that money you deduct along with the employer portion of the CPP and EI (yes, you have to top up what the employee is already paying) to CRA at extremely defined intervals.  The collection and remittance of these deductions, referred to as source deductions, is an area you do not want to mess around with, the penalties for late remittances pile up quickly and CRA has very little sympathy for businesses that mess around on this stuff.  Once you start remitting, you are firmly on their radar.  We recently posted a horror story that we were brought into a few years ago along these lines.

The Solution

We feel that there are only two ways to handle the employee situation.  The first one is to purchase payroll software, like the payroll add-on for QuickBooks or a stand-alone system like CanPay or EasyPay and use this software to do your calculations and tell you how much to pay the government.  You then manually pay CRA each month and take care of filing other government forms at year end (t4’s) or when someone leaves (ROE’s) by yourself.   The second approach is to outsource your payroll with a company like IBEX.  I think the outsourced approach is the way to go for start-ups (bet you saw that coming!).  With two employees, the annual fees to have an outsourcer take care of paying your employees by direct deposit, paying the government for you and otherwise keeping you out of trouble is around $300. That’s  less than a lot of the software and best of all, you don’t have to know anything about payroll, other than how much you want to pay people.  The outsourcer will make sure you come across as a professional employer from day one.

When new business owners go down the route of spending too much of their time and energy doing payroll themselves, we often tell them, “You can be the best in your industry at doing your payroll, but you will go out of business if your competition is focusing on what really matters while you try and reinvent the payroll wheel”.

 

IBEX Payroll / Tips and Tricks — 2 Comments
8
Aug 11

CTRL + F

Payroll can generate tons of data. A handy trick when searching any web based data source, like the output from the reports in IBEX, is to use CTRL + F to search the page you are on for what you are looking for. This works in all browsers and can really save some time. Try it!

Thanks to Frank Conway for showing me this!

Tips and Tricks — No Comments
3
Jun 11

Everest Reporting Tool

How to keep track of your employee’s vacation or sick accrual balances with the new Everest reporting tool.

Up to date vacation, sick or any other accrual information in your company can now be tracked and accessed with just a click with the new Everest reporting tool.

Keeping your employee’s accrual information organized with Everest’s online reports can save you a lot of time and effort when approving sick and vacation time.  With the new report writer you can:

  • Access up to date information (as of the last posted pay run).
  • Analyze your data in different ways (by employee, by department, etc…).
  • Export it to the format you prefer.

Easily create your Vacation and Sick Time accrual balances report by following these 6 steps:

1. Go to the reports tab on the main tool bar.

2. Click on the “Add new Custom Report” link.

3.  Click on the “Employees Accruals Balances” link under Payroll reports.

4. Select the year you would like to report on.

This report will show all the accrual balances in your organization.

5. Filter it down to show only your vacation and sick accrual balances. To do this, add the filter:

Filter column: Accrual Name

Comparison: Contains 

Value:  Type in some of the words that conform your vacation and sick accrual name.  In this case we will use “Vacation Time” and “Sick Time”.

If you use “Equal” as your comparison type, then you must type in the exact Accrual Name. For example “Accrued Sick Time”.

6. Save your report with a name that is easy to identify, for example:  Vacation/Sick time accrual balances.

Now you can easily run the report every time you need from your list of custom reports.

Tips and Tricks — No Comments
2
Jun 11

Electronic Statement of Earnings

How to activate an employee in Everest to receive an Electronic Statement of Earnings

Do you have a growing stack of statement of earnings taking over your desk which employees never seem to pick up? Do you often have to reprint pay slips which have been lost, ripped, spilled on, or maybe they’ve been eaten by a goat?

We have a solution.

Electronic Statement of Earnings will not only help save you space and time – but you are also helping save the planet!

In as little time as 27 seconds, your employee will be set up to receive an encrypted copy of their statement of earnings in their email inbox on every payday.

1. Go to the Employees tab on the main toolbar.

2. Click on the “Edit” button beside the employee you wish to activate.

3.  In the Employee Profile, click on the “Contact Points” tab.

4. Click “Add Contact Point”.

5. Here you will enter the employee email information.

a: Under “Type”, use the dropdown menu to select Home Email or Work Email depending on the address you are entering.

b: For “Value”, enter a valid email address to be used.

You can also enter any additional comments under “Notes” for reference.

6. Click on “Save”.

7. Now, go to the “Document Delivery” tab to activate the email address for delivery.

8. Click the checkbox beside “Deliver electronic statement of earnings”.

9. Assign the email address to be used for the Electronic Statement of Earnings.

a: Under the “Available” box, highlight the desired email address to be used by clicking on it.

b: Click the “>” button to move the selected email into the “Assigned” box.

c: Click on “Save”.

Now your employee has been set up and will automatically receive an Electronic Statement of Earnings in their email on pay day!

Note about Passwords:

The Electronic Statement of Earnings which the employee receives on payday is password protected. The password is set by default to the last 4 digits of the employee’s Social Insurance Number.

If you wish to change this, click on the “Change” link beside “Password”.

A pop up will appear where you can enter the new password to be used by the employee when opening their Electronic Statement of Earnings email.