1.6 Chapter Summary and Additional Readings and Resources

1.6.1 Chapter Summary

Payroll is the process of administering employees’ pay, including making the appropriate deductions, withholdings, and remittances. Payroll can also refer to an employer’s record of all the organization’s employees, their salaries or wages, and any deductions. Knowledge of payroll will help employers remain competitive in offering compensation packages to employees. Similarly, knowledge of payroll will help workers understand how they are compensated.

Payroll professionals are responsible for verifying with management how much an employee is supposed to be paid and how often, as well as confirming a worker’s hours and/or timesheets with the worker and/or the worker’s supervisor; calculating gross pay based on the employee’s hours worked and rate of pay; adjusting for employees’ pay changes, lump sum payments, accruals (e.g., severance, personal days, and vacation days), sick days, and leaves of absence; and much more.

The process of setting up payroll involves creating a payroll account with the Canada Revenue Agency (CRA) and determining whether the organization should complete payroll manually, use payroll software, or outsource payroll functions. Once the employer organization is set up, the next step is setting employees up in payroll, which is done by collecting, validating, and entering employee information into the employer’s payroll system (SLO 3). When determining whether to complete payroll manually, use payroll software, or outsource payroll functions, organizations should consider jurisdiction, payroll complexity, and organization size.

1.6.2 Additional Readings and Resources

Canada Revenue Agency. (2023). Employers’ guide – Payroll deductions and remittances. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4001/employers-guide-payroll-deductions-remittances.html

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