Bookkeeping for Edmonton businesses

Labour has to reach the job it was spent on

A crew-based Edmonton business — industrial services, fabrication, installation, maintenance — usually knows what it billed a job and rarely knows what the job cost, because payroll lands in one wages account for the whole company. Costing labour to jobs is what turns a payroll figure into information: hours captured against a job code, burdened with employer contributions rather than recorded at bare wage, and posted so that each job carries its own labour cost. Without it, an unprofitable contract is invisible until the annual result is worse than expected and nobody can say which work caused it.

The burdened cost is higher than the wage

The hourly rate on the timesheet is not what an hour costs. Employer Canada Pension Plan and Employment Insurance contributions, workers’ compensation premiums, vacation pay and any benefits all sit on top of it. A business that quotes from the bare wage rate is systematically underpricing, and the gap is not small. The bookkeeping job is to make the burdened rate visible: employer contributions posted to the same job as the wage rather than swept into a general payroll expense, so that the cost the ledger reports is the cost the business actually incurred.

Remittances arrive on their own schedule

Source deductions withheld from pay are held on behalf of the CRA and remitted on a schedule that is set by the employer’s remitter type, not by convenience, and it can be more frequent than monthly for a larger payroll. Late remittance is a penalty event independent of anything to do with the corporate return, and the balance owed sits as a liability on the balance sheet between the pay run and the payment. A ledger that posts only the net bank withdrawal never shows that liability, which is how a business discovers it is behind. Payroll remittances covers remitter types and timing.

Vacation pay is earned before it is taken

Vacation pay accrues as an employee works, whether it is paid out each period or banked until leave is taken. Where it is banked and never accrued in the ledger, the balance sheet omits a real obligation and the month an employee takes three weeks off looks like an expense spike that has nothing to do with that month’s activity. Accruing it as it is earned puts the cost in the period the work happened and leaves the liability visible. Vacation pay rules covers the entitlement side.

The year-end reconciliation you cannot fake

At year end the T4 summary has to agree to the payroll accounts in the ledger and to what was actually remitted. Where each pay run was posted in full, the reconciliation is a check. Where the year was recorded as a series of net withdrawals, it is a reconstruction, and any discrepancy has to be explained to the CRA rather than to the owner. Discrepancies between remitted amounts and reported amounts are among the more reliably followed up items in small-business payroll. The payroll year-end checklist sets out the sequence.

One sales tax, and what that leaves

Alberta has no provincial sales tax, so the ledger carries a single 5% GST account, and there is no provincial employer health tax accruing alongside payroll. That makes an Edmonton employer’s monthly obligations shorter than a comparable employer’s in most other provinces: federal source deductions, workers’ compensation and GST. Fewer obligations means the ones that remain get less attention, which is precisely why remittance timing and the workers’ compensation account are the two most common places an otherwise well-kept Alberta file falls behind.

Remote, from a single office

EverStone is a sole practitioner CPA firm at 32615 South Fraser Way in Abbotsford, British Columbia. There is no Edmonton office and no local staff. Timesheets, payroll registers and remittance confirmations arrive electronically, and the ledger is maintained against those documents each month rather than assembled at year end. The person posting the pay runs is the CPA who will reconcile the T4 summary and prepare the corporate returns, so the payroll figures are settled once rather than twice.