Payroll Is More Than Just Payday

When you think “payroll,” it’s easy to picture cutting cheques or hitting “submit” in your software.
But real payroll is a system — one that connects your business, your employees, and the CRA.

Every payday triggers a chain reaction:

1. You pay your team.
2. You withhold deductions (CPP, EI, income tax).
3. You send those deductions to the CRA by a set deadline.
4. You record it all properly for year-end (T4s, T4As, etc.).

When it’s done right, it feels seamless.
When it’s done wrong, the CRA starts sending letters.

Who’s Involved in Payroll

Let’s make it simple — there are three players in every payroll system:

1. You (the employer) — responsible for paying accurately, withholding deductions, and remitting them.
2. Your employees — who rely on you to pay them correctly and on time.
3. The CRA — who expects the deductions you withheld to be sent in full, on schedule.

If any of those three steps break down, penalties and stress follow quickly.

The Core Pieces of Payroll

At its heart, payroll includes these moving parts:

• Gross pay: the total an employee earns before deductions.
• Deductions: amounts withheld for income tax, CPP, and EI.
• Employer contributions: your matching portions for CPP and EI.
• Net pay: what the employee actually receives.
• Remittance: the total deductions (plus your share) sent to the CRA.

Every dollar must balance — what’s taken from employees plus what you owe as an employer equals what’s remitted.

Payroll Accounts: Your Link to the CRA

Before running payroll, you’ll need to open a CRA payroll program account (it starts with “RP”).
This tells the CRA you’re now an employer and responsible for:

• Withholding and remitting deductions,
• Filing annual summaries (T4s, T4 Summary),
• Maintaining payroll records.

Setting this up properly from day one saves hours of correction later.

The Payroll Calendar: Why Timing Matters

Payroll runs on deadlines — not suggestions.

Typical CRA remittance deadlines:

• New or small remitters: 15th of the following month
• Frequent remitters: up to four times per month

If you miss, the CRA charges daily compound interest and late penalties starting at 3%.
It’s one of the fastest ways to lose money unnecessarily.

Building payroll reminders into your system is non-negotiable.

Why Getting It Right Matters

Payroll isn’t just about compliance — it’s about trust.
Your team expects accuracy.
Your CRA account expects consistency.
And your peace of mind depends on both.

When you have a clean payroll process, you gain three things every small business owner needs:

• Confidence — knowing everyone’s paid right.
• Control — knowing your remittances are on time.
• Clarity — knowing your numbers match across books, bank, and CRA.

The Takeaway

Payroll is one of those systems that either runs quietly in the background… or constantly causes fires.
Get the foundation right early — and the rest of the series will show you exactly how to keep it smooth.

At Castle Bookkeeping, we help business owners set up payroll that’s accurate, compliant, and completely stress-free — so you can focus on leading your team, not calculating deductions.

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