How to do it better: online payroll deduction calculator edition
Jun 26, 2023Resources
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Every time you process payroll, one of many factors to keep top of mind is payroll deductions. There are two categories of deductions: statutory deductions that are government-mandated, such as federal, provincial and territorial tax; Canadian Pension Plan (CPP) and Employment Insurance (EI); and non-statutory deductions like company-related benefit plan and pension, social committee, and charitable contributions.
If you’re not already using a third-party payroll solution, you might be leaning on Canada Revenue Agency’s (CRA) Payroll Deductions Online Calculator for statutory deductions. This calculator can be used “to calculate federal, provincial (except for Québec), and territorial payroll deductions.” For those solely or additionally calculating provincial income tax in Québec, Québec Pension Plan (QPP) and Québec Parental Insurance Plan (QPIP), you might be using Revenu Québec’s (RQ) WebRAS. These online resources allow businesses and payroll professionals to enter gross pay payroll information in order to have those statutory deductions calculated for them. This online tool also creates a mock pay statement that breaks down the gross pay to net pay.
The following information is required in order to use these calculators effectively:
- Pay frequency
- Province and/or territory of employment
- Pay date
- Gross income
- Taxable benefit and/or company deduction information
- Individual federal and provincial tax exemptions
- Any additional information from TD1 forms
- Pensionable and insurable earnings
- Year to date contributions
- Employer’s EI rate
Once the calculator has loaded, information can be entered into the mandatory fields, after which point, the site will display the gross pay, statutory deductions and the net pay amount. This process is completed for each individual employee. Our in-house payroll experts say this method is popular among payroll professionals because it’s an easy-to-use tool, available online for anyone to access at no charge.
If this is your go-to: excellent! We’re glad you’ve found a helpful tool to make your days run smoother. However, you should also be aware that this process has some potential payroll pitfalls:
- The time-consuming process required to pay employees manually, as well as to send remittances to the appropriate governing body in adherence with the payment schedule
- The possibility that not all pertinent information is being entered into the calculator, such as Registered Retirement Saving Programs (RRSP) and other benefit amounts, which affect the calculation of remittances and net pay for employees
- The extra time required to re-key the data by manually adding it to a spreadsheet for the purposes of adjusting year-to-dates and/or reporting
- Creating your own statement of earnings requires information not included in online calculators. The statement of earnings also must follow the provincial and territorial standards
In outlining this process, it’s clear that it requires a lot of open tabs, a meticulous eye for detail, and – maybe most importantly – a considerable amount of time to ensure employees are being paid accurately and on time.
We’re here to tell you there’s an easier way…
An alternative to these online payroll deduction calculators is a third-party provider, like Payworks’ Payroll solution. In addition to calculating gross pay, statutory deductions and net pay, these solutions have MANY added bonuses, such as:
- Eliminating the need to re-key data manually across multiple platforms
- Sending statutory deductions and remittances to governing bodies like the CRA and RQ on your behalf (fun fact, Payworks even participates in a remittance frequency exchange program with the CRA to help lessen the chance that our clients could miss a remittance!)
- Preparing and filing tax forms
- Creating a statement of earnings (pay statement) on your business’ behalf that follows the provincial and territorial standards, and is accessible 24/7 to employees, securely from a web-enabled device through Employee Self Service (ESS)
- Knowledgeable, one-to-one service to offer assistance with any and all questions
If you’re ready to say goodbye to the cumbersome process of relying on online payroll deduction calculators, here are some key points to consider when selecting Payworks as your third-party payroll provider:
Ease of use
User-friendly without sacrificing any of the bells and whistles, Payworks products are built for Canadian employers. We offer a personalized and stress-free onboarding experience: a simple, streamlined process that not only gets our clients up and running in our system, but also comfortable using our tools. Plus, expert service is there any time our clients need it. Each one is assigned a dedicated Client Service Representative (CSR), because we know you need a contact – not a call centre.
Ease of access
Our cloud-based solutions are securely available 24/7 within our application. Whether our clients are on the road for business or spending some extended time at the lake, they can approve time off requests or process payroll from any web-enabled device. Plus, employees will have that same 24/7 web-enabled access to securely view and print their own pay statements and tax forms through Employee Self Service (ESS).
Businesses can face costly penalties and fines levied by government bodies if remittances are incorrect, late or not sent at all. The fines and penalties charged for late or missed remittances vary depending on to which government body an employer might remit, but the cost of implementing a solution like Payworks’ Payroll could be less than one substantial penalty. Plus, with modern tech and expert guidance, solutions like Payworks can be your guidepost on all things related to payroll compliance.
To see how affordable a payroll solution can be, visit www.payworks.ca/quote for a free, no-obligation quote.
Ensuring employees are paid accurately and on time is a top priority – and we can help make it the least of your concerns. Using one platform for your payroll needs can greatly improve processes and eliminate the time spend wading through disorganization, redundancies, and manual processes.
Whether you have one employee or thousands, Payworks’ Payroll solution was tailor-made to the unique needs of Canadian businesses just like yours. Sounds good? Let’s chat soon! Visit www.payworks.ca/landing-pages/campaigns/book-a-demo to connect with one of our knowledgeable representatives.