Payroll Calculator – How to use it

For small business owners in Ontario

Need an effective payroll calculator that won’t cost an arm and a leg? We have the answer and it’s free! Start by opening this handy payroll calculator by Help SME and then follow the steps below on how to correctly use it.

LAUNCH PAYROLL CALCULATOR

 

Part 1: General Information

It is not necessary to fill out everything, but you must choose your province, how often the employee is paid and the date of payment. This information should be kept in a spreadsheet for all employees. This information can come in handy for T4’s and ROE’s.

 

 

Part 2: Total Claim Amount

An employee usually fills out a TD1 form where you would find this information. If a TD1 has not been filled out, it is your responsibility to still deduct taxes based on the basic personal amount which would be Tax claim code 1.

 

 

Part 3: Salary Input

Choose Salary and input the gross income for the employee. For the examples below let’s assume you pay your employees semi-monthly, which is equal to 24 pay periods.

* To calculate vacation pay add in 4% of the gross wages paid to employee. *

 

Scenerio 1: Hourly pay

  • Your employee Rhonda is paid $20 per hour and she worked 30 hours one week and 15 hours the second week. Rhonda’s gross pay would be: $20 X 45hrs = $900.

 

Scenerio 2: Salary pay

  • You pay David $30k per year. The gross pay would be: $ 30k / 24(pay periods) = $1250

 

 

Part 4: Employee Deductions

This section is where you record other employee deductions which we are not going to get into in this article.

 

Part 5: CPP, EI and Exemptions

As mentioned earlier, it is important to keep a spreadsheet to keep track of payroll and remittance for each employee along with their total CPP and EI contributions. You want to ensure they do not go over the limit of these deductions. In this section, you enter those amount and the calculator will alert you if there is an overage.

 

Canada Pension Plan (CPP)
Annual Maximum Pensionable Earnings $51,100.00 $52,500.00
Annual Basic Exemption $3,500.00 $3,500.00
Annual Maximum Contributory Earnings $47,600.00 $49,000.00
CPP Contribution Rate 4.95% 4.95%
QPP Contribultion Rate 5.100% 5.175%
Annual Maximum CPP Employee Contribution $2,356.20 $2,425.50
Annual Maximum CPP Employer Contribution $2,356.20 $2,425.50
Annual Maximum QPP Employee Contribution $2,427.60 $2,535.75
Annual Maximum QPP Employer Contribution $2,427.60 $2,535.75

 

Employment Insurance (EI) – Ontario
Annual Maximum Insurable Earnings $47,400.00 $48,600.00
Employee Contribution Rate 1.88% 1.88%
Employer Contribution Rate 2.632% 2.632%
Annual Maximum Employee Contribution $891.12 $913.68
Annual Maximum Employer Contribution $1,247.57 $1,279.15

 

Final Step

Hit tax and deductions report and this will give you the net pay, the total deductions and the amount of what needs to be remitted to the Government. You can also hit paystub to get a paystub for that payroll.

 

For more detailed information on payroll or for payroll outsourcing services, contact the experts at Sum Bookkeeper.

Contact Sum Bookkeeper

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