I see a lot of posts on social media asking for recommendations on payroll software. It really does not matter. Any payroll software you choose makes calculations based on the information you enter. If you make incorrect entries, it does not know the difference. “Garbage in, garbage out” as some of my accountant friends would say. Payroll softwares do vary, it mainly depends on personal preference and ease of use, but there are several things you must understand.
One mix-up that happens quite often is adding the CPP exemption on an additional run. Also, while we are on the topic of CPP, you also must remember that not all earnings are pensionable, it depends on the employee.
The same is also true as it relates EI deductions. Not all income codes are insurable, it will depend on what type of income it is.
WSIB plays by the same rules. You must understand what earnings are used when calculating WSIB. Because it is calculated on an employee basis, the accessible earnings amount may be different from your pensionable or insurable income.
You must also know what income sources are vacationable and ensure you are calculating vacation at the correct rate. Employees accrue vacation at different rates based on their tenure. You must also be aware of the earnings that require vacation to be paid on vacation depending on the province you are in.
Another wonderful area of mass corruption is stat pay calculations. Here is where a lot of mistakes are made. Not all earnings are included in your stat pay calculation, and you must be certain of your calculating process or you will be paying vacation on top of vacation. Above all this, each province has guidelines regarding stat pay calculations.
Are your codes populating in the correct boxes of the T4? That is not something you want to figure out in February when you print your T4s.
Updating your software is also a must. Rates change and you need to comply. Running the first couple payrolls in January using the previous year's rates is a nightmare to fix. It just wastes time, valuable time.
All these areas require a certain amount of payroll knowledge to catch any errors. You must also know how to make the adjustments within your software without effecting other amounts. Payroll is overly complex and changing an amount in one place can have a significant impact in other places. To make adjustments accurately, you must understand this and know how to audit effectively.
These are only a few areas where trouble occurs, but there are lots more. Truth is, if you do not know payroll, you should not be doing payroll, and relying on your software will not get you any closer to having accurate payroll. Employees assume their pay is correct, so you as their employer, must not assume their payroll is correct, you must maintain a level of certainty. Do not solely rely on your software to produce the expected results.
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