Payroll services in Halifax

No payroll tax, one compensation board

Across Atlantic Canada, only Newfoundland and Labrador charges an employer payroll tax. A Halifax employer pays none, so the employer cost of a wage is the gross pay, the employer share of CPP and EI, and the workers’ compensation premium. The Workers’ Compensation Board of Nova Scotia assesses that premium on payroll, at a rate set by industry, which is why a restaurant, a contractor and a software company pay very different amounts on the same wages. Registering with the board, reporting payroll to it and budgeting the premium sit alongside the CRA work. The Atlantic Canada tax facts page lists the four boards and the one payroll tax.

The RP account and your remitting schedule

Payroll starts with a payroll program account on your business number. The CRA assigns a remitter type based on how much you withheld in an earlier year, and that type sets whether remittances are due monthly or more often. New employers usually start as regular remitters, due on the 15th of the following month. A missed remittance draws a penalty even when the amount is small, so the due dates go in the calendar before the first pay run, not after the first notice. See payroll remittances and the RP account and the remittance calendar.

Seasonal hiring and the record of employment

Few Canadian cities hire around the seasons the way Halifax does. Patios, tour operators and waterfront shops staff up for the cruise and summer months and cut back in the fall; fishing enterprises crew up for their openings; contractors slow in the coldest weeks. Every one of those layoffs triggers a record of employment, and your former staff cannot get EI processed properly without it. An ROE issued late, or with the wrong insurable hours or the wrong reason code, turns into phone calls from people you laid off months ago. We issue ROEs electronically from the payroll records. See the record of employment.

Vacation and holiday pay under Nova Scotia rules

Vacation pay, general holiday pay and the rules for who qualifies come from Nova Scotia’s Labour Standards Code, not from the CRA. Nova Scotia observes Heritage Day in February, which not every province does, and a business that copied its payroll settings from an out-of-province template can miss it. Seasonal staff who leave before taking vacation are paid out the vacation pay they have earned on their final cheque. Getting the provincial rules right is part of running payroll here, and the calculation belongs in the payroll system rather than in a spreadsheet beside it. Vacation pay rules covers the general pattern.

Tips, crew shares and commissions

Three Halifax industries pay people in ways a standard payroll setup does not expect. Restaurants where the employer collects and shares out tips treat those tips as pensionable and insurable earnings, while tips paid directly by the customer are not, so the distribution method decides the deductions; see restaurant accounting in Halifax. Fishing crews paid by share of the catch are reported on T4F slips, with EI deducted and remitted by the payer; see fishing accounting. Commissions paid to employees need their own tax treatment on each pay.

Paying yourself from the company

An owner-manager who takes a salary goes through the same payroll as everyone else: income tax and CPP withheld and remitted, and a T4 at year end. Owners who control the company are generally not insurable for EI, so EI should not be deducted from their pay, a mistake that is common in first-year payrolls. Whether salary, dividends or a mix is right is a planning decision made with the corporate return. See corporate tax in Halifax and CPP for incorporated owners.

T4s by the end of February

T4, T4A and T4F slips, with their summaries, are due by the last day of February. The slips have to agree with what was remitted through the year, and a gap between the two draws a PIER review from the CRA. We reconcile the payroll accounts to the CRA statement monthly so February is a filing, not an investigation. Taxable benefits, such as a company vehicle or a phone plan paid for an employee, are added to pay through the year rather than guessed at on the slip. The payroll year-end checklist lists the steps.

Remote, and there is no Halifax office

EverStone is a one-CPA firm at 32615 South Fraser Way in Abbotsford, British Columbia, serving Halifax, Dartmouth, Bedford and Sackville employers remotely. Timesheets and changes come in through a secure upload link or the payroll software itself, pay stubs go to employees electronically, and remittances are made on schedule. Pay dates and calls are set in Atlantic time.