Hiring your first employee can be an exciting step in growing your small business. An additional worker can add capacity to the product or service you sell, take away administrative tasks from you, or help with sales and growth.
Unfortunately, the learning curve is a bit steep when you go from no employees to one employee. The good news is that it gets easier as you add more workers after getting through the initial stage of setting up your human resources and payroll systems.
Here is a quick list of things to get in order before your employee’s first day:
Canada Revenue Agency (CRA)
Payroll Account – The CRA requires that all employers withhold taxes, and collect and pay Employment Insurance (EI) premiums and Canadian Pension Plan (CPP) contributions. Getting the payroll number is free-of-charge. If you already have a Harmonized Sales Tax (HST) account, you can add a payroll account to your business number by calling 1-800-959-5525.
Tax Deduction (TD1) Forms – As part of your process for hiring a new employee, you will ask them to complete two separate TD1 forms; the TD1-Federal and the TD1-Ontario . The purpose of these forms is to collect tax information from the employee that will be used in calculating their deductions and tax withholdings.
Monthly Payments (Remittances) – After opening a payroll account, you will be expected to file a monthly remittance with CRA. The easiest way to do this is to talk to your bank about allowing government remittances as part of your online banking. There are also paper and alternate online options to process these transactions.
Workplace Safety and Insurance Board (WSIB)
The Ontario WSIB provides insurance that protect your workers in the event they are injured or become sick on the job. Protecting workers under the WSIB is required by law. You can apply for coverage on the organization’s website www.wsib.on.ca.
Accessibility for Ontarians with Disabilities Act (AODA)
Ontario’s accessibly legislation provides direction on ensuring your hiring practices are inclusive and accessible. The legislation also spells out specific training requirements for your employees to inform them about accessibility standards for customer service in your operation. The Government of Ontario has helpful information on its website (www.ontario.ca/page/accessibility-rules-businesses-and-non-profits and offers in-person training.
Tools and Systems
Reporting employee wages and calculating withholdings (taxes for provincial and federal governments) and deductions requires accurate record keeping. Many software tools will help with this tracking, and some will even include localized information for Ontario businesses. QuickBooks Online with Payroll is an example of a software tool used by many businesses. The biggest advantage to using payroll software is that it will track the payments and withholdings to date and adjust deductions automatically when a maximum is reached, or when a worker is entering a new income tax rate.
Are you ready to grow your business with new staff? The consultants at the Halton Region Small Business Centre are here to help. We offer one-on-one consultations for free. Book your appointment by calling 905-825-6000, ext.7900.