Our Program Manager, Cheryl Miki, details the process of paying new staff in this first post in a three-part series exploring the hiring of new staff .
Hiring New Staff Part 1: How do you Pay Them?
So you’ve decided to hire someone.
Yay, new blood for the organization! In the non-profit community, where small staff numbers dominate, hiring new staff is a really big deal. Adding one new person to a team of, say, three can have a huge impact on everything from team dynamics to the overall budget.
So now that you’ve shaken hands and introduced them around, how do you pay them?
On the first day, there are three things you need to gather:
- TD1 Forms
The TD1 form gathers the crucial information you need to set up your employee’s pay and deductions, and to remit their T4 slips at the end of the year. The form contains three basic areas that you need to pay attention to.
The first section is where your new hire will include their personal information like birth date and social insurance number. You’ll need those for their T4 slip at the end of the year. Their birth date is needed because CPP deductions do not apply to folks under 18.
The second area asks what kind of tax deductions they normally use on their annual tax returns. Everyone gets the basic tax deductions, but depending on their circumstances, the employee may also claim the spousal deduction or disability credit, etc. Add all the credits up and this will determine how much tax to deduct.
The third section of the form is the back page and this is where the employee declares if they have more than one job or work in a prescribed area (like northern Canada). In addition, their answers to these questions affect how much tax will be deducted from their paycheques.
- Banking Info
You’ll need to gather their bank account info if you pay your staff by direct deposit. If not, don’t worry about it.
- The Handy Dandy Payroll Tracking Template
Feel free to use this excel template to track your employee’s wages and deductions, as well as the amount that you’ll need to remit to CRA. It is an excellent way to keep your pay records up to date so that at the end of the calendar year you can easily total the columns to file the employee’s T4 slip.
I will return next week with Hiring New Staff Part 2: About Payroll Deduction.