Camille's upholstery workshop has enough orders to hire someone every Friday. She has paid suppliers by e-transfer for years, so she initially imagines paying the new worker the same way and sorting out the paperwork later.
The payment method can remain simple. The payroll obligations need to be ready before that first payday.
Confirm the relationship and employee details
Camille reviews whether the arrangement is employment, based on how the work will actually operate. Calling the worker a contractor would not remove payroll obligations if the facts establish employment.
For an employee, she obtains the necessary identification and social insurance number, determines the province of employment, and collects the required TD1 information. She stores personal information securely rather than keeping it in a shared workshop notebook.
Price the full pay run
The agreed gross wage is not the same as take-home pay or the employer's total cost. Depending on the employee's circumstances, payroll includes income tax, CPP and EI deductions, along with employer contributions.
Camille uses current payroll calculation tools and checks pay frequency, hours, taxable benefits and applicable employment standards. A round-number e-transfer with no gross-to-net record leaves too much to reconstruct.
She arranges the CRA payroll program account before its first remittance is due and confirms the remitter category and deadline. The money withheld is tracked separately from the workshop's available spending money.
Assign the recurring work
Each pay period needs a record of gross pay, deductions, net pay and employer amounts. Remittances and year-end T4 reporting have their own deadlines. Hiring someone for only one day a week does not eliminate those tasks.
Camille writes down who runs payroll, who checks it and who submits payments. If an accountant helps, she confirms the division of responsibilities. A clear first pay run gives the workshop a repeatable routine as the employee's hours change.