Payroll
Payroll is the part of running a business where being a little bit late is expensive and being wrong is worse. Set it up once, properly, and it stops being something you think about. Set up as a full service on ADP, or kept deliberately simple if that is all you need.
Worth saying first, because it saves some people money. If your payroll is you, or you and your spouse, drawing a regular salary from your own corporation, a full payroll platform is more machinery than the job requires.
In that situation what you generally need is: the right amounts calculated, a schedule telling you what to remit and when, the source deduction account set up correctly, and T4s at year end. That can be handled directly, without a subscription, and for a good deal less.
The point at which a system starts earning its keep is roughly when you have staff who are not you. Variable hours, multiple employees, direct deposit, people wanting their own pay stubs, records of employment when someone leaves. That is when doing it by hand becomes the expensive option.
For businesses with staff, payroll runs on ADP, through a partnership that lets me set it up, run it and support it directly. You get established infrastructure, and one person to call about it, on the same number you use for everything else.
| What it does | Detail |
|---|---|
| Pay runs | Weekly, biweekly, semi-monthly or monthly, with direct deposit |
| Source deductions | Calculated, withheld and remitted to the CRA automatically, on your remitter schedule |
| Time collection | A mobile app for staff to punch in and out, if hours are variable. Optional |
| Employee portal | Staff get their own access to pay stubs and T4s, which ends the annual round of requests |
| Year end | T4 and T4A preparation and filing |
| Records of employment | ROEs produced and filed when someone leaves |
| Into your books | A general ledger interface so payroll lands in your accounting software instead of being keyed in again |
The last row matters more than it looks. When the same person runs the payroll and keeps the books, the payroll figures and the financial statements agree by construction rather than being reconciled once a year at year end. See bookkeeping.
Most tax debts are debts. Source deductions are different, and it is worth understanding why before you are ever tempted to hold one back for a month.
Money withheld from an employee's pay for income tax, CPP and EI is not the company's money. It is held in trust for the Crown, and the law treats it that way. Three consequences follow:
None of this is a reason for alarm if payroll is being run properly. It is the reason payroll is worth automating rather than leaving on a to-do list in a busy month.
The most consequential payroll question is often whether someone should be on payroll at all. Calling a worker a contractor does not make them one. The CRA looks at the substance of the arrangement: control over how and when the work is done, who supplies the tools, whether the worker can subcontract, chance of profit and risk of loss, and how integrated they are into the business.
Getting it wrong is expensive in one direction and only in one direction. If a contractor is reassessed as an employee, the employer is generally on the hook for both sides of CPP and EI, plus interest and penalties, going back. Nobody enjoys that conversation.
Related, from the other side of the same coin: incorporated contractors working substantially for a single client have their own exposure under the personal services business rules. See incorporated professionals.
The things owners provide without thinking of them as pay: a company vehicle available for personal use, cell phones, gym memberships, certain insurance premiums, gift cards. Many are taxable benefits that belong on the T4, and the automobile standby charge in particular is a calculation that surprises people the first time they see it.
This is one of the more common findings in a payroll review, and it is much cheaper to set up correctly than to correct across several years.
If you own the corporation, payroll is only half the question. Salary creates RRSP room and CPP contributions and is deductible to the company. Dividends do not, and are not. The right mix depends on your income, what you leave in the business, and what you are planning, and it is worth revisiting when the rules change rather than being set once and forgotten.
Because I do both the corporate and personal returns, that decision gets made looking at both sides at once. See owner-managed businesses.
One fixed monthly fee covering both the platform and the person, quoted in writing before anything starts. You are not managing a software subscription separately from an accountant, and there is no contract locking you in.
Where payroll is small enough not to need a system, it is priced accordingly. I have no interest in selling machinery to somebody who needs a spreadsheet and a remittance schedule.
Usually not. An owner drawing a regular salary needs the amounts calculated correctly, the source deduction account set up, a remittance schedule, and T4s at year end. That can be handled directly for considerably less than a full service costs.
Penalties apply and they escalate with repetition, and this is the category of tax debt the CRA pursues most firmly, because the money was withheld in trust rather than owed. Directors can be held personally liable for a corporation's unremitted amounts, which is the part most owners are not aware of.
Only if they genuinely are one. The CRA looks at the substance of the relationship rather than the label or the invoice. If a contractor is later reassessed as an employee, the employer generally picks up both sides of CPP and EI plus interest and penalties, retroactively.
Yes. Mid-year transitions are routine, and the year to date figures come across so the T4s at year end are complete and correct. The main thing is getting it done cleanly rather than quickly.
Yes, on the full service. Staff have a portal for pay stubs and T4s, which removes a recurring administrative job from you, particularly every February.
It depends on your industry and your payroll size. Many small employers fall under the Employer Health Tax exemption, and WSIB coverage varies by sector and by the type of worker. Both are worth confirming rather than assuming, in either direction. If you run more than one corporation, check the EHT position specifically, because associated employers share a single exemption rather than each getting their own.
This page describes payroll obligations in general terms as at August 2026 and is not advice for your business. Thresholds, rates and remitter schedules change, so check your own circumstances.
Twenty minutes, no charge. Including an honest answer about whether you need a system at all.
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