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If you are self-employed or are running your own business, you have a lot that you need to consider. Beyond just running things on a daily basis, you also must consider handling payroll for your employees, if you have any. Along with taking care of this chore, you also need to consider this question – what is payroll tax? Payroll tax is a very important aspect of handling your business. Each country has their own process on how this is handled, what is included and what rules are to be followed. Canada follows along with this pattern, expecting you to calculate the amount to be deducted from your employee’s pay each time. If you have never handled payroll and the deductions that need to be taken, you may want to do a little investigating before undertaking this endeavor. There are several software packages available that you can use that will help you to automatically calculate the appropriate amounts for each worker. This can then be set up so that the program does this for you at each pay period and at the end of the year for yearly tax purposes. As an employer, you are responsible for the handling of the proper amount of income tax being taken from your employees’ pay. They are then reported to the Canada Revenue Agency, as is required by law. Failure to do this correctly can lead to fines and other legal troubles. Any payment received for work performed or services provided needs to be examined as possibly falling under payroll tax. There are several categories that are taxable items. Among these include any salaries, bonuses or commissions, stock options and severance pay. It is also important to keep in mind that there are items that are considered non-taxable. These items are not subject to tax like wages are. Items such as income from pensions, employer contributions to a registered pension plan or fund, employee benefit plans or income received by those who belong to a religious order are not to be taxed. In Canada, the Northwest Territory imposes a separate payroll tax that operates a little differently. This is a tax that is to be paid by the employee and not the employer. This tax applies to anyone who works, provides services and earns wages within the territory. Currently this rate is at two percent of the gross pay. Trying to find the answer to what is payroll tax may reveal many answers. It will help you to better understand the taxation process and what exactly needs to be done in order for you to properly and legally run your business. If you feel unsure about handling payroll tax on your own, there are many qualified professionals and services that can assist you. You will want to find a service you can fully trust to make sure all your payroll provisions are taken care of correctly so you can avoid any potential difficulties down the road. Are you looking for more information regarding payroll tax? Visit http://smallbizproscalgary.ca/ today!
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