Calculating Canadian payroll deductions is no small task. What seems like it should be relatively straightforward can actually be a complicated process. It doesn’t need to be difficult, however, so long as you keep a few things in mind.
Follow these simple steps for calculating Canadian payroll deductions.
Know the Variables
The first step in calculating Canadian payroll deductions is to know your variables. Different provinces in Canada have different rules when it comes to income taxes, Canadian Pension Plan premiums and Employment Insurance contributions, and even vacation entitlements. Quebec and Saskatchewan do things differently than Alberta and Ontario.
Another variable you need to consider is the employment status of the person you’re paying. Most provinces calculate different deductions for workers based on their classification as full time, part time, or seasonal.
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The more accurate your calculations, the fewer problems you’ll have later on.
Using a Calculator
Computers and the internet have gifted us many different tools. For those trying to figure out Canadian payroll deductions, one of the greatest tools available is the deductions calculator.
You can find Canadian payroll deduction calculators in many different places. The CRA offers a free one on its website. Your Canadian payroll service provider may also offer one. These tools are available for free. They have different levels of sophistication. Some will be more up to date and accurate than others. Always look for a calculator using the latest rate information.
To calculate your deductions, plug in the information the calculator requires. The more information you can provide, the more accurate the calculation will be. Keep in mind not all calculators account for every nuance of payroll. Some, for example, won’t factor in taxable benefits at all. Ultimately, you are responsible for the accuracy of the deductions.
Get a Helping
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off a small deductible. It depends on the employer, but if there was the passage of the universal
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