Business owners who are new to the hiring process may not have all the information they need when adding a new employee. Here is a scenario for you. A master electrician knows how to wire a house, how to add the correct gage wire for proper and safe operation, what wires to touch when installing a light and how to handle a short in the system but has no sweet clue how to hire and pay someone else. Luckily, we have a couple tips to help you with that.
Let’s go under the assumption you have already gone through the process of posting a wanted ad, interviewing potential employees and making it official with a handshake (or elbow bump these days) and are ready to move forward.
There are a couple of things you must do as a new employee starts working for you and you need to pay them. You need to get all the basics out of the way. Do you have a payroll account with CRA? Do you have their contact info? Birthday, Mailing address, Phone number, Etc.? How you will be paying them; Direct deposit? Cheque? What payroll program if any will you be using? How much and how often you will pay them? What holidays you will or won't be paying them? How many sick days you are ok with?
The list goes on and if you are feeling overwhelmed like most new employers you may want to hire a bookkeeper or accountant to handle all of these things for you (Like Us) but regardless if you are going to try it yourself or leave it to the professionals there are a few things that you absolutely NEED to get to be in compliance with the government payroll process.
- Social Insurance Number this, as I am sure you know, is very important because it is how the Canadian government identifies you and is required by law to be added to the payroll process.
- Secondly you need to get your new employee to fill out and submit a TD1 form. There are federal and provincial/territorial TD1 forms and both are important because they determine the amount of tax to be deducted from an individual's employment income or other income, such as pension income.
Did you know employees who do not fill out new forms may be penalized $25 for each day the form is late? The minimum penalty is $100, and increases by $25 per day to the maximum of $2,500. - Employees do not have to fill out new TD1 forms every year if their personal tax credit amounts have not changed.
These days the hiring and payment process is not as simple as putting a help wanted sign on the outside of your shop door. A quick chat saying "I need a guy for a job tomorrow, can you make it?" won't get you very far in an official capacity. If you want to make it official, legal and compliant hopefully the preceding information will help make it a little less overwhelming.
For all of the official rules, regulations, and information needed pertaining the aforementioned forms and more please visit here.
