Find the payroll plan for you

Payroll is the administrative process of calculating employee earnings, withholding the correct deductions, and issuing payments on a set schedule. For Canadian business owners, this goes beyond simply writing paycheques; it involves managing a complex cycle of tax compliance and reporting to ensure their teams are paid fairly and the government receives its dues on time.

Managing payroll effectively requires staying on top of several moving parts:

• Accurate wage calculation: tracking hours worked, overtime, and vacation pay to ensure every employee receives the correct gross pay.
• Mandatory source deductions: calculating and withholding CPP, EI, and federal or provincial income tax from every pay period.
• CRA remittances: sending the withheld taxes, along with your employer contributions, to the CRA by your specific monthly or quarterly deadline.
• Labour law compliance: adhering to provincial and federal regulations regarding minimum wage, statutory holidays, and termination pay.
• Year-end reporting: preparing and filing T4 and T4A slips for your employees and the government by the end of February each year.

Using QuickBooks Payroll helps you manage these tasks by automating the calculations and filings. The system stays updated with the latest tax tables, so you do not have to manually track rate changes or worry about missing a remittance deadline.

Payroll software is a digital tool used to automate the manual calculations and filing requirements associated with paying employees and contractors. Using QuickBooks Payroll helps you manage these recurring tasks accurately, ensuring you remain compliant with the CRA.

Primary uses of payroll software include:

• Automatic earnings calculation: the system determines gross pay based on salaries or hours worked, including overtime, bonuses, and vacation pay.
• Statutory deductions: the software automatically calculates and withholds the correct amounts for CPP, EI, and federal or provincial income tax.
• Electronic payments: you can issue payments through direct deposit, which eliminates the need for manual paycheques and physical bank visits.
• CRA compliance and remittances: the tool tracks your source deductions and files them with the government on your behalf, reducing the risk of late-payment penalties.
• Documentation and departures: at year-end, the software generates T4 and T4A slips for your team. It also produces Records of Employment (ROEs) for employees who leave the company.

By centralizing these functions, QuickBooks Payroll reduces the administrative effort required to keep your business running smoothly and your records organized.

Yes. You can use QuickBooks Payroll as a comprehensive service if you don’t currently need an integrated accounting suite. The standalone version provides the full suite of automated tools you need to manage your team’s pay cycles and CRA compliance from day one.

While the standalone plan is a complete solution, connecting it with an accounting plan offers extra efficiency:

• Automatic expense posting: your wages and employer contributions post directly to your ledger, ensuring your financial reports are updated without any manual intervention.
• Elimination of double entry: you remove the need to manually move data or create journal entries between two different systems.
• Centralized business records: having your payroll and business expenses in one place makes it easier to stay organized for year-end tax filings and potential audits.
• One consolidated bill: if you decide to use both, your services are bundled under a single subscription, making your monthly overhead easier to track.

Choosing the integrated approach gives you a real-time view of your total labour costs as they relate to your overall business profit, helping you make more informed decisions as your business grows.

Before you begin setup in QuickBooks Payroll, gather the following documents to ensure your calculations and tax withholdings are correct from the start.

Information required for setup:

• Compensation and benefits details: collect your current pay rates, schedules (e.g., bi-weekly or semi-monthly), benefit plans, and any specific deduction amounts.
• Employee personal records: you will need legal names, Social Insurance Numbers (SINs), current home addresses, and official start dates for every team member.
• Tax withholding forms: ensure you have completed federal and provincial TD1 forms for each employee to determine their specific tax code.
• Prior payroll history: if you are switching systems mid-year, you must enter year-to-date totals for wages and deductions to ensure your year-end T4 slips are accurate.
• Business tax information: have your CRA business number and your assigned remittance frequency ready for entry.
• Liability records: identify any outstanding payroll taxes or existing balances that need to be accounted for in your new records.

Having these details organized before you start will make the onboarding process much faster and help prevent errors in your first few pay cycles.

QuickBooks Payroll works for small to mid-size businesses across a wide range of industries. The system is built to handle the varied pay frequencies and tax requirements found across different sectors.

Industries that commonly use the software include:

• Retail and hospitality: including businesses with shifting seasonal schedules or high staff turnover.
• Construction and skilled trades: where tracking hours across different jobsites and managing varied pay rates is a priority.
• Professional services: such as law firms, consultants, and creative agencies that bill by the hour.
• Non-profit and charitable organizations: requiring accurate records for board reporting and transparent audits.
• Health and wellness practices: including dental clinics and salons with commission-based pay structures.
• Accounting and bookkeeping firms: that need to manage the pay cycles for their own staff and their clients.

QuickBooks Payroll is a practical choice for businesses that already use QuickBooks Online for accounting and want to manage payroll without a separate tool or an outsourced payroll service.

Yes, time tracking is included with QuickBooks Payroll Premium and Elite plans. If you are on the Core plan, time tracking is not included.

How time tracking functions within these plans:

• The QuickBooks Workforce app: employees and contractors can log their hours, track their location via GPS, and switch between different projects directly from their mobile devices.
• Automated payroll sync: once timesheets are approved, the hours flow directly into your next pay run, which eliminates the need for manual data entry or external spreadsheets.
• Project-specific tracking: you can track time against specific clients or tasks to understand your total labour costs for each project.
• Advanced Elite features: the Elite plan includes additional tools for tracking project progress in real-time and comparing project estimates against actual hours worked.
• Labour law support: the system helps you maintain accurate digital records of hours worked, which is useful for staying compliant with provincial overtime and break requirements.

QuickBooks Payroll reports provide a detailed view of your payroll activity. You can customise, run, print, or export any report to share directly with your accountant.

Reports cover:

• Payroll deductions and contributions
• Payroll tax liability
• Payroll tax and wage summary
• Time activities by employee or project
• Vacation and sick leave balances
• Workers' compensation
• Multiple worksites

Direct deposit pays employees electronically, with funds deposited directly into their bank accounts—no cheques to print, sign, or distribute.

The process involves a few simple steps:

• Add employee banking details: enter the transit, institution, and account numbers for each team member when you set them up in the system.
• Run your payroll: QuickBooks Online Payroll calculates the net pay for each person after all statutory deductions are applied.
• Electronic funding: funds are automatically withdrawn from your account and deposited into your employees' accounts on your scheduled pay date.
• Access digital pay stubs: employees can view and download their detailed pay stubs through the QuickBooks Workforce app or web portal as soon as the pay run is processed.

Direct deposit is available on all QuickBooks Payroll plans. While the Core plan follows a standard two-day lead time, the Premium and Elite plans include next-day direct deposit.

Yes. Every time you run payroll, QuickBooks calculates all three statutory deductions automatically based on current federal and provincial regulations. This eliminates the need for manual spreadsheets and reduces the risk of calculation errors.

Deductions handled by QuickBooks Payroll:

• CPP (Canada Pension Plan): the system calculates both the employee and employer portions based on each team member's pensionable earnings and the current annual contribution limits.
• EI (Employment Insurance): employee and employer premiums are determined using current CRA rates and the yearly maximum insurable earnings.
• Federal and provincial income tax: withholdings are calculated based on each employee's province of employment and the information provided on their federal and provincial TD1 forms.

QuickBooks Payroll updates its tax tables automatically whenever the government publishes new rates, ensuring your withholdings remain accurate without you having to track changes manually.

Yes, QuickBooks Payroll generates T4 slips for all employees and prepares the T4 Summary for CRA submission.

At year-end, the software handles the following tasks:

• Compiles annual totals: it automatically aggregates each employee’s annual earnings, deductions, and employer contributions.
• Generates T4 slips: the system creates individual slips that can be distributed electronically via QuickBooks Workforce or printed for manual distribution.
• Prepares the T4 Summary: it generates the consolidated report of all payroll activity required by the CRA.
• Supports electronic filing: the software allows for direct electronic filing with the CRA for eligible employers

Since your payroll data is recorded within the system throughout the year, you do not need to reconcile figures from separate spreadsheets or external systems. Maintaining your records in one place makes year-end preparation more straightforward and ensures your filings remain consistent with your daily bookkeeping.

Yes, QuickBooks Payroll generates ROEs when an employee experiences an interruption of earnings, such as a layoff, resignation, or leave of absence. Since an ROE is required by Service Canada for Employment Insurance (EI) claims, the software uses your existing payroll data to ensure the filing is accurate and timely.

How the system manages the process:

• Calculates insurable data: the software automatically determines the correct insurable hours and earnings based on your recorded pay history.
• Supports electronic submission: you can generate the required file for direct electronic submission to Service Canada.
• Stores digital records: the platform keeps a history of all issued ROEs, allowing you to reference them later for audits or employee inquiries.
• Reduces filing errors: using integrated data reduces the risk of manual transcription mistakes that could otherwise delay an employee's EI claim.

Having your payroll data already in QuickBooks makes the departure process more straightforward and helps you meet your legal obligations as an employer without additional administrative effort.

While both options ensure your team gets paid, the main difference lies in who manages the daily tasks and the total cost of the oversight. Deciding which is right for you depends on whether you prefer to stay hands-on with your data or outsource the entire function.

The two models work as follows:

• Payroll software: this is a platform like QuickBooks Payroll that you manage yourself. The software automates the calculations, tax withholdings, and filings, but you remain in control of reviewing the data and hitting "submit" on each pay run.
• Payroll service: this is a fully outsourced model, such as a payroll bureau or a Professional Employer Organization (PEO). A third-party provider handles the entire process for you, which typically comes at a higher cost per employee and offers less immediate access to your data.

For most Canadian small businesses, payroll software offers the best balance of value and transparency. You get full visibility into your labour costs and predictable monthly pricing, while modern automation ensures that running a standard pay cycle only takes a few minutes of your time.

Yes, QuickBooks Online Payroll includes access to the QuickBooks Workforce portal and mobile app, which allows your team to manage their own payroll information.

Through the self-service portal, employees can:

• View and download pay stubs after each payroll run
• Access their T4 slips at year-end
• Update personal information and direct deposit details
• Check time-off balances (available on Premium and Elite plans)

Yes, you can manage and process your payroll cycles through the QuickBooks mobile app. This allows you to pay your team and stay on top of your CRA obligations even when you are away from your computer. The app is available for iOS and Android and is included as part of your QuickBooks Online Payroll subscription.

Yes. QuickBooks Payroll allows you to pay employees directly inside of QuickBooks Payroll.

How the two workflows differ:

• Employee payroll: employees are processed through your regular pay cycle. The software automatically calculates and withholds statutory deductions like CPP, EI, and income tax, then generates T4 slips at year-end.
• Direct deposit: you can use direct deposit to pay employees, ensuring everyone is paid electronically on their respective due dates.

Note you can manage contractors separately by logging them as Suppliers in QuickBooks Online. With QuickBooks Online, you can also generate T4A slips at year-end for your contractors. This ensures your total labour costs and tax obligations are organized in a single location, which simplifies your bookkeeping and year-end filing.