Simplify Your Payroll Record Keeping

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I have many clients who have automated payroll services. By using the word “automated”, I mean specifically:

* Companies who use payroll services like Ceridian Canada etc.
* Companies who have accounting software with a Payroll Module and pay for periodic and/or annual updates

But, I also have many clients that are just single owner/shareholders or small businesses that only have 2-5 employees and find that that it is too costly to keep paying for an updated payroll service or hire a company like Ceridian.

Here is what I suggest that my clients do

Let’s face it .. I would love to do your payroll for you, but quite frankly I don’t have the time. Payroll keeping is one of the compliant things you just have to do – on time – always. If you don’t pay your employees on Payday .. you are out for a mutiny! I can’t have that responsibility, as much as I try to schedule my time and work in progress, I may not be available 100% of the time.

Also, my hourly rate is too expensive for you to pay me to do your payroll 🙂 I should mention, that I have many clients that follow my instructions and at the end of each month after the last payroll, they fax to my Toll-Free Fax Line all the payroll sheets and I recap it myself on excel, and fax them with the amount of payroll deductions to pay by the 15th of the next month. In these cases, I do the annual T4’s as well so, it’s all part in parcel of my services, and I usually add about 12 minutes a month to the WIP file (0.2 hr), to be billed with the Year End, or whenever there is an accumulated amount worth billing, or added to the monthly billings.

So .. here is what I show to my clients or instruct them how to keep proper payroll records – the easy way – and the cheap way. It’s nice to pay certain accounting software companies every year to get the updated payroll tables .. but – why would you want to keep paying them every year if you don’t have to?

Detailed Instructions For You

1. Get the WinTOD program

Canada Revenue Agency gives every employer a set of books that have all of the rates needed to calculate payroll deductions. They also provide you with these “tables of deductions” online on their WinTOD (Tables on Diskettes) Grab the latest version. It definately changes every January 1st and if there are Tax changes during the year, there usually is a revised version for payrolls after July 1st.

2. Install The Program

After you download the program, install and set up the program. You want to set it up in either your native English or French language, and include your company name. Also, select the proper Province your employers are in, and the usual frequency of payroll that you pay your employees. Briefly review the options to see if there are anything that you should be including.

3. Do The Payroll

Enter the employee’s name, the date and then click on the salary (or hourly figure) and enter the gross earnings for the pay period. The program defaults to the basic TD1 amounts, but if you have a signed TD1 on file (and you should, hint,hint) .. override the TD1 amounts as that affects your calculation.

When you press “CALCULATE” you will see the following screen .. print the screen twice – one for your files and one to give to the employee with the net payroll cheque.

4. Summarize the figures in my NEW Template For the Taking!

Here is my excel spreadsheet. It’s not that complicated. You calculate your payroll for your employee, and then recap the cheques that you pay your employees with in the “MONTHLY” tab. Then, periodically you can keep track of all your payroll to be T4’ed in the year by recapping on the monthly cheques on the “YEARLY” tab. If you do this correctly, not only will you have a “computerized” record of your payroll, but you will also know how much payroll deductions to remit by the 15th of the following month.

You are welcome to take this template and use it for your own purposes. You are also free to pass it along (because it’s not that big of a deal), although I hope that you remember where you got the idea and give me credit 😀 Maybe stroke my EGO here, and give me a blog comment to let me know that you have taken this template of mention it somewhere on your blog and link back to this URL.

I am currently using Microsoft Excel for Windows 95, version 7.0 as my preferred spreadsheet program and version. You can change the text of anything I use to suit your own needs .. it is just a guideline.

HART’s 2006-PAYROLL RECAP ON EXCEL —> OPEN to view, SAVE to Disk ..

Here is the monthly view, where you would recap each of the employees printouts from the WinTOD program, into your excel spreadsheet

Note that I added a second employee for cosmetic looks, so you would see how it works. It automatically calculates the CPP (x 2) , EI (x 2.4) and TAX (x 1) to remit to Receiver General by the 15th of the following month. If you have more employees, certainly feel free to add new lines, but copy the formula in the NET column down in the newly inserted spaces! After I recap the monthly payroll, I would recap it on the yearly “Payroll Card” so you will know how much to T4 your employees come February next year.

5. That’s all there is to this!

I would keep a file of the individual payroll sheets that you printed out, and attach it to the MONTHLY printout (in excel, just select it with your mouse, then PRINT / SELECTION) and then keep them in a separate file called .. “Payroll Records – 2006”

I can almost guarantee you that, if you are using the proper WinTOD version software and doing it this way – you will never have a PIER Review again!

And .. Don’t Forget – if you are already using WinTOD

Please note that there definately was an update July 1, 2006 and it’s available on the CRA website now .. According to Canada Revenue Agency

On March 22, 2006, the Government of Alberta announced changes that affect payroll deductions.

On May 2, 2006, the Federal Government also announced changes that affect payroll deductions. This version of TOD includes the announced federal and provincial tax changes effective for July 1, 2006. All employers should use this version of TOD for payroll deductions starting July 1, 2006.

Remember to bookmark their WinTOD page .. HERE .. it should never change and will always have the latest winTOD version of the software. If you prefer, you can just click this next link and download the July 2006 version .. for your convenience .. RIGHT NOW!


YYZ says:

do you have an updated version for 2010?

HART says:

YYZ … you can always find the latest WINTOD software by going to CRA’s website and search for WINTOD …

For 2010 .. here’s the link to the January WINTOD software download

For an update of this for excel .. the WinTOD (windows Tables on Diskette) software breaks down the Tax into both Federal and Provincial tax. You have to add them up together for the amount of tax that would e.g. appear on an employee’s T4 slip.

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