Employer responsibilities - The payroll steps

These steps will help you understand your responsibilities and how payroll works. It is important to understand each step, to ensure you are not assessed penalties and interest or suffer other consequences.

Step 1: Determining your status

You have to determine if you are an employer, trustee or payer.

Step 2: Opening a payroll program account

As an employer, trustee or payer, you will need to open a payroll program account.

Step 3: Hiring employees

To find out what to do when hiring an employee, see Hiring an employee.

Step 4: Calculating deductions

You have to calculate and withhold the Canada Pension Plan (CPP) contributions, employment insurance (EI) premiums, and income tax deductions based on the amounts you pay your employees. You also have to calculate your share of CPP and EI. For more information, see Calculating deductions.

Step 5: Remitting deductions

You have to remit the CPP contributions, EI premiums, and income tax you deducted, along with your share of CPP contributions and EI premiums. For more information, see Remitting payroll deductions.

Step 6: Completing and filing information returns

You have to report the employees' income and deductions on the appropriate T4 or T4A slip. For more information, see Completing and filing information returns.

Keeping records

During all this process you have to keep proper records. To find out what to keep, for how long and other information, see Keeping records.

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