Guide
Payroll Guide: How to Run Payroll in Canada
Global payroll
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Canada's payroll requirements can be overwhelming for employers new to the country's varying regulations.
This free guide cuts through the confusion and provides a clear explanation of payroll processing in Canada, so you can feel confident growing your team across each province and territory.
Here's what you'll find inside:
- Canadian payroll regulations: Understand federal vs. provincial differences, including minimum wage and overtime
- Essential information: Learn what you need from your business and employees for smooth payroll
- Payment schedules: Discover legal requirements and common practices for pay frequency
- Salary and tax calculations: See how to calculate salaries, taxes, and deductions accurately
- Deductions and benefits: Explore statutory deductions, leave benefits, and workers' compensation
- Payment methods: Understand your options for distributing employee salaries
- Payslip essentials: Learn about the key components of a Canadian payslip
- Recordkeeping: Discover the necessary payroll records and retention periods
- Tax forms: Take a look into the essential tax forms for Canada Revenue Agency (CRA) and provincial filing
- Payroll options: Explore in-house and outsourced solutions for managing your payroll
Who is this guide for?
- Business owners of all sizes, from small businesses to established companies
- HR and finance professionals responsible for employee payroll
- Anyone who wants to gain a solid understanding of Canadian payroll
FAQs
What are the key differences between federal and provincial payroll regulations in Canada?
Federal and provincial payroll regulations differ in several areas, including minimum wage, overtime pay, vacation pay, statutory holidays, termination of employment, parental and other leaves, and payroll taxes. While the federal government establishes a baseline for these regulations, provinces have the authority to enact their own legislation, leading to considerable variations across the country.
What employee information is required for Canadian payroll?
For Canadian payroll, you need to collect personal information from your employees, such as their full name, address, date of birth, SIN (Social Insurance Number), and emergency contact information. You also need employee payroll information, including:
- Hire date
- Job title
- Department
- Regular hours of work
- Overtime rate
- Pay frequency
- Bank account information for direct deposit
- TD1 form information (tax deductions)
- Benefits enrollment information (if applicable)
- Garnishment orders (if any)
Additionally, you'll need information about their earnings and deductions, including their hourly rate, salary, or commission, bonuses, overtime pay, other earnings, income tax, CPP (Canada Pension Plan), EI (Employment Insurance), provincial deductions, benefits deductions, and other payroll deductions.
How are salaries and taxes calculated in Canada?
Salaries in Canada are calculated by adding the regular salary and any additional payments, such as bonuses or allowances, to determine the gross salary. The net pay is then calculated by subtracting total deductions from the gross salary.
Taxes are calculated based on the employee's province of residence. For employees in Quebec, provincial and federal income taxes are calculated separately, such as contributions to the Quebec Pension Plan (QPP). For all other Canadian employees, federal and provincial tax withholdings are typically calculated as a single deduction.
What are the common pay periods in Canada?
The common pay frequencies in Canada are monthly, bi-weekly, and semi-monthly. Bi-weekly is the most common pay frequency during the calendar year. Always ensure your employee pay is delivered on time as per jurisdiction regulations and employment contracts.
What payroll records must be maintained in Canada?
Employers in Canada must maintain various payroll records, including tax forms and documentation, such as T4 Slip, T4 Summary, TD1 Forms, Record of Employment (ROE), and more.
Can I use Deel’s payroll services to run payroll in Canada?
Yes, companies can use Deel to hire, pay, and manage a Canadian workforce, whether you’re hiring in Ontario, British Columbia, New Brunswick, or beyond. Deel Global Payroll streamlines your cross-border payroll into one seamless experience, with integrations for your favorite HR and accounting tools.
Deel is not only a payroll provider, but also offers employer of record (EOR) services that enable you to hire abroad without setting up a local entity. With Deel EOR, you can offload payroll, tax, and compliance tasks—from ensuring correct tax rates to determining remittance schedules, and more.
