Let’s be honest: You didn’t start your small business because you love payroll. Or paperwork. Or – dundundun – payroll paperwork. Your passion is wood-baking pizzas with juuust the right amount of bubbles in the cheese; finding the coolest vintage board games for your hobby shop or nailing the perfect hue of “blue” for a graphic design project. So, when year-end comes around, the thought of taxes, T4(A) forms and deadlines can not only feel overwhelming, but downright unpleasant. The bad news? Year-end paperwork will probably never be as fun as making pizzas. But it can be a lot less stressful with a solid plan and little bit of preparation. Find payroll peace at year-end with these tips.
1. Start early
The key to a smooth and compliant payroll year-end is all in your payroll data, which appears on your employees’ T4s, T4As and RL-1s (in Quebec). Whether you’re filing manually or electronically using an online payroll app, reviewing this data early can save you headaches later, when it’s time to submit your forms in February. Start in November or December so that you can get organized, take your time and keep your eyes peeled for any discrepancies to minimize the likelihood of receiving a Pensionable and Insurable Earnings Review (PIER) from the Canada Revenue Agency (CRA).
2. Review your payroll data
So, which data should you be reviewing? Begin with the basics of your business, such as:
- Company name and address
- CRA/RQ business number and payroll account number
- Threshold frequency for your remittance schedule
- Account number and rates for Workers’ Compensation (WSIB/WCB), Employer Health Tax (EHT) and other provincial/territorial taxes
Next, verify employee details for active and terminated employees (they will also need year-end statements). A tiny mistake in an employee’s information can cost lots of time when the forms are due, especially if this happens for multiple employees at once. Look for:
- Correct first and last names, addresses, dates of birth and SIN numbers. Look out for SIN numbers that start with a 9, which means they’re temporary and may have expired.
- Correct classification – is this person an employee or contractor?
- Correct tax status. Is the employee’s TD1 form up to date?
Finally, make sure that your year-to-date (YTD) amounts are accurate. Review:
- Gross earnings
- CPP and EI
- Federal and provincial/territorial income tax
- Vacation – verify accrued vacation amounts and ensure that vacation times were reported and deducted from employees’ balances
- All incomes and deductions
- Keep in mind any outstanding entries to your payroll bank account, like manual or void/cancelled cheques
Using an online payroll software like Wagepoint can simplify your year-end review process with easy-to-access payroll reports that show your YTD amounts at a glance. The new T4/T4A/RL-1 Export also allows you to see a preview of each of your employees’ year-end forms so that you can quickly spot any errors before submitting your documents.
3. File electronically
Filling out tax forms by hand sounds about as fun as spending an afternoon reading junk mail. Submitting your documents electronically, directly to the government, means that you can save time, be more accurate and lean on the support of a friendly team and dedicated year-end resources, like Wagepoint’s 2022 Year-End Survival KITs (Keep It Together).
Plus, who wants to issue T4s by hand? With electronic filing, your employees can have access to PDF versions of their year-end documents within 48 hours of your submission, right from their employee portals.
4. Stay mindful of payroll processing deadlines around the holidays
Another payroll consideration at the end of the year is, well, paying your team on time. With bank closures around Christmas, Boxing Day and New Year’s, you may need to process your payrolls earlier than usual to make sure that everyone is paid by the dates you intend.
You’ll also need to be aware of other cutoffs, like the last date to process a direct deposit/manual payroll for a pay date in 2022 or the deadline for submitting bonus payroll runs if you plan to issue year-end bonuses before 2023.
To stay on top of these deadlines, check out Wagepoint’s 2022 Canadian Payroll Calendar (you don’t need to be a customer). The Year-End Survival KITs also notify you of all your important dates, and customers have access to a just-for-you payroll processing schedule. Add relevant dates to your business calendar or Google Calendar so that your employees are always paid on time (customers also receive a heads up by email).
5. Lighten the load
For all business purposes, year-end is actually pretty serious stuff. But that doesn’t mean that you need to take yourself seriously the entire time. Balance is important during any stressful time, so find your outlets, your support people, and your favourite dad jokes to help lighten the load and prioritize mental wellness.
For more payroll year-end tips, as well as a few funnies, check out Wagepoint’s Year-End Survival KITs and 2022-23 Year-End Checklist for Small Businesses.
If you are looking for a friendly payroll solution that is built for small businesses just like yours, sign up for Wagepoint. Use code 1MONTHFREE to receive your first month of payroll for free.
