When you operate a small business with employees, you need a broad understanding of payroll taxes and deductions. To assist you, the Canada Revenue Agency offers a free online tool called the Payroll Deductions Online Calculator (PDOC) that takes the guesswork out of the process, saving you time and ensuring your numbers stay right on the money.
What Information Does the PDOC Require?
The PDOC lets you calculate federal, provincial, and territorial payroll deductions for all provinces and territories except Quebec. To use the PDOC, you first need to enter basic information about the type of payments you make: salary, commission, or pension. The tool then asks you to enter the employee’s name, province of residence, and pay frequency (weekly, biweekly, monthly, etc.). Finally, the PDOC requires you to input your employee’s tax information, including any entitled credits, along with year-to-date Canada Pension Plan (CPP) and Employment Insurance (EI) contributions.
What Calculations Does the PDOC Provide?
Once you finish entering employee information, the PDOC generates a salary calculation result that shows the gross wages, federal and provincial deductions, CPP and EI contributions, and the employee’s actual net pay. You can print the results page or save it in PDF format for your payroll records. While this document doesn’t replace the proper statement of earnings you must give to your employee, it can certainly help you prepare it.
What Are the Added Benefits of the PDOC Online Calculator?
In addition to simplifying payroll, the PDOC helps you know how much you owe the CRA at the end of each month. After you complete calculations for your employees, you can also view, print and save a summary of your employer remittance amounts from a separate page.
When you operate a small business, using time-saving tools leaves you with more time left over to focus on growth and improving your products or services. Top-notch accounting software and apps can aid you in this mission with handy tools that make record-keeping, financial reporting, and even payroll simple and convenient. In addition, QuickBooks Online can help you maximize your tax deductions. Keep more of what you earn today.