Entering Payroll Deductions - Canada

Last Updated: Mar 10, 2016 07:58AM PST

Currently, Kashoo has a Canadian payroll integration partner (PaymentEvolution), but you may want to know how to enter payroll figures into Kashoo yourself. If you will be going this route, you will need to do some research on Canadian Payroll from the CRA website and how to electronically remit taxes to the CRA.

Note: If you operate a business in the USA, please see our article Entering Payroll Deductions - USA.

Using the CRA’s Online Calculator to calculate Payroll

One great thing about the CRA is that they have a tool called the Online Payroll Deductions Calculator available for small business owners to get all the payroll deductions calculated online without having to do the work manually themselves. If you select the “Determine Gross Income” option and enter the gross salary of your employee in a given pay period (i.e. $1000 bi-weekly), then the payroll deductions online calculator generates a very nice printable table giving you a net pay amount with all the deductions included.

Do make sure to then click on the Employer Remittance Summary, as you will need that as well.

Create Payroll Liability Accounts

Kashoo by default already has a “Payroll Expense” account, so you will only need to add some payroll liability accounts. Note: If you imported your own chart of accounts, then be sure that you do have an equivalent Payroll Expense account as these instructions assume you do.

You will need to create the following Taxes and Remittances liability accounts:

  • Tax Deductions
  • CPP - Employee
  • CPP - Company
  • EI - Employee
  • EI - Company

To create those accounts:

1. Go to Accounts under the SETUP section in the left hand navigation menu.

2. In the Add New Account section, add the following accounts (note: you don't need to worry about the number field, Kashoo automatically creates a number):

Tax Deductions
  • Name: Tax Deductions
  • Type: Taxes and Remittances

CPP - Employee
  • Name: CPP - Employee
  • Type: Taxes and Remittances

CPP - Company
  • Name: CPP - Company
  • Type: Taxes and Remittances

EI - Employee
  • Name: EI - Employee
  • Type: Taxes and Remittances

EI - Company
  • Name: EI - Company
  • Type: Taxes and Remittances

If you look at the liability section, you will see the new accounts you created.

Entering Payroll Example

You can enter your employee payroll by going to the Expenses page.

For this example, we are going to have Employee A (great name, huh), make $1,000 (gross pay) in the pay period.

Here is her pay stub:

Expense Account Description Price
Payroll Expense Total Cash Income $1,000.00
CPP - Employee Employee CPP Liability -$42.84
CPP - Company Employer CPP Liability -$42.84
EI - Employee Employee EI Liability -$18.80
EI - Company Employer EI Liability -$26.32
Tax Deductions Federal and Provincial Income Tax -$92.01
Payroll Expense Employer CPP and EI Expense $69.16
  Net Amount $846.35

So after taxes, the Gross Pay of $1,000.00 becomes Net Pay of $846.35. Notice that all the tax liability accounts are negative amounts while the Payroll Expense is positive.

If you look at the screenshot below, you will see what the payroll expense looks like in Kashoo.

Note: To get the Tax and Remittances accounts to show up in the Expense Account field, you will have to scroll down to the bottom and click Show All Accounts. Alternatively, you can simply start typing in the account name into the text box and it will display accounts that match the name.

After you click Add to add the payroll deduction expenses, you can click on Edit to view the summary of this transaction or click Duplicate to duplicate this transaction. The Duplicate function is great because you can enter multiple payroll entries in a row by simply changing the employee’s name (the Vendor field) and the deductions amounts.

You will be able to view deductions and pay history of your employees by going to the Vendors page which is found in the SETUP section of the left hand navigation menu.

You can also view total payroll deductions in the Balance Sheet report in the Reports section of the left hand navigation menu.

Entering Payroll Tax Remittance Example

When you remit payroll taxes to the government, you can do the following to enter that remittance into Kashoo.

1. Go to the Expenses page.

2. Enter the following expense:

  • Date: Choose the date you’re paying, in this example it’s August 16, 2013.
  • Vendor: Receiver General
  • Terms or Payment Account: Choose how you paid, in this example, it’s Bank Account.
  • 1st line:
    • Expense Account: Tax Deductions
    • Price: 92.01
  • 2nd line:
    • Expense Account: CPP - Employee
    • Price: 42.84
  • 3rd line:
    • Expense Account: CPP - Company
    • Price: 42.84
  • 4th line:
    • Expense Account: EI - Employee
    • Price: 18.80
  • 5th line:
    • Expense Account: EI - Company
    • Price: 26.32

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