Coverage: every province you employ in
Start with where your employees work, now and in the next few years. Canadian payroll is not one set of rules; each province and territory has its own income tax, employment standards and workers’ compensation, and Québec has its own pension plan (QPP), parental insurance (QPIP) and provincial tax administration. Software that handles Ontario well may not handle Québec or British Columbia’s daily overtime at all.
Ask specifically how the software handles vacation pay, statutory holiday pay and overtime in each of your provinces. These are set by employment standards, not by the CRA, so some payroll tools leave them to you. If you have to calculate stat holiday pay by hand and type it in, you are doing the hardest part of payroll yourself.
Accuracy you can verify
Deductions should match the CRA’s formulas (published as T4127) and its Payroll Deductions Online Calculator. Ask how the vendor tests this and how quickly rates are updated each January and July, when CPP, EI and tax parameters can change. During a trial, run a few employees through both the software and the CRA calculator and compare the results to the cent.
Look at how the system handles annual maximums, CPP2, taxable benefits, and employees who start or leave mid-year. Then look at what happens when you make a mistake. Good software lets you reverse a pay run cleanly rather than editing history, and keeps a record of who approved what.
Remittances and year-end
Payroll is not finished when employees are paid. The software should calculate what you owe the CRA (and Revenu Québec if applicable) for each period, know your remitter type and due dates, and produce the PD7A figures. At year-end it should generate T4 and T4 Summary files you can upload, plus T4A, RL-1 and other slips you need, and run checks before filing.
ROEs matter too. Look for software that produces ROE payroll extract files for ROE Web rather than making you type hours and earnings by pay period into a form.
- Remittance amounts and due dates by remitter type
- T4, T4 Summary and T4A files for electronic filing
- RL-1 support for Québec employees
- ROE files for ROE Web
- PIER-style review before year-end
- Employer levies such as WCB and Ontario EHT
How employees get paid
Payroll products differ in how they move money. Some debit your account and pay employees themselves, which is convenient but means they hold your funds briefly and usually need several days of lead time. Others produce a direct deposit file in the Canadian Payments Association CPA 005 format that you upload to your business bank, which then pays employees. That keeps money moving through your own bank and works with any major bank that supports the format.
Neither approach is universally better; it depends on your bank and how much control you want. Ask which one a product uses so there are no surprises. SeroPayroll, for example, produces CPA 005 files for RBC, TD, Scotiabank, BMO, CIBC and Desjardins and does not move money itself.
Accounting and time tracking
Every pay run needs to reach your general ledger: wages, employer contributions, deductions owed and net pay. Check whether the payroll software posts to your accounting system directly, exports a journal file, or leaves it to you. Double posting, where a pay run gets entered twice, is a common source of errors when payroll and accounting are separate.
If you track time, check how hours get into payroll. Built-in timesheets or a time clock save retyping. SeroPayroll includes timesheets and a time clock, and exports GL journals; SeroBooks Pro includes payroll inside the same ledger, so a pay run reaches the books once and never twice.
Pricing models
Canadian payroll pricing usually takes one of two forms: a base fee plus a charge per employee per pay run, or a flat monthly tier based on headcount. Per-run pricing can look cheap for a small team paid monthly and expensive for a larger team paid weekly. Add up a full year at your actual pay frequency, including year-end slip fees, ROE fees and extra charges for direct deposit.
SeroPayroll uses flat tiers: $25 USD a month for up to 10 employees, $50 for 11 to 50, $100 for 51 to 100, and $249 for 101 to 500, with annual plans priced at ten months and a 14-day free trial. Accountants can manage unlimited companies for $1,200 USD a year.
Run a parallel payroll before you commit
The best test of payroll software is your own payroll. During the trial, set up a few representative employees: an hourly employee with overtime, a salaried employee, someone in a second province if you have one, and someone with a taxable benefit or garnishment. Run the same pay period in your current system and the new one, then compare gross pay, every deduction, employer contributions and net pay line by line.
Then test the edge cases that cause problems later. Process a statutory holiday week. Terminate a test employee and generate the ROE. Reverse a pay run. Run the remittance report and compare it against what you would send the CRA. Look at what a pay stub shows employees.
Finally, check how the software handles your switch date. If you change systems mid-year, you will need to load year-to-date figures for each employee so T4s are correct. Ask the vendor how that works and how long it takes, or plan your switch for January 1.
Security, support and honest limits
Payroll holds SINs, bank details and salaries. Ask how data is encrypted, who can see what (roles for administrators, payroll staff and read-only users), and how access is logged. Ask where support is based and whether it is available on your pay days.
Finally, ask every vendor what their product does not do. A good vendor will tell you. SeroPayroll is Canada-only (US payroll is in SeroBooks Pro), files RL-1 as slips without e-transmission, and its employee self-service app is still in development. Knowing limits up front is better than finding them at year-end.