All Canadian businesses need to follow various government regulations. Doing so is onerous and time-consuming – not to mention sometimes confusing. If your business does not follow the rules, the process can also be expensive. The government charges interest and penalties for failure to comply.
Letting the team at Silver + Goren manage your government compliance necessities means less stress and more time for you to devote to your business goals. Below you will find an outline of the basics of government compliance. Feel free to meet with us to learn more, answer your questions and plan your next steps.
First, any new business must decide on the most appropriate legal form. Choices include proprietorship, partnership or limited company. Each of these has its own unique advantages and disadvantages and needs to be considered carefully.
Next, all businesses must register with the government and obtain a business identification number.
If you wish to hire employees you need to register your business as an employer. Your business identification number will then allow you to remit payroll withholdings to the government. At the end of the year, you’ll need to summarize all of your payroll information and report it using T4 forms.
If you are hiring employees, you will likely need to register with the Workers’ Safety Insurance Board. You will be required to make contributions to the Board which helps fund payments to your employees should they be injured on the job. The cost of insurance for you is determined based on the nature of your industry. To ensure you pay the least amount legally required, you need to determine your business’s most appropriate industry category.
The majority of businesses will be required to collect harmonized sales tax. You must collect the tax from every transaction with a customer as well as pay HST on every purchase you make. You are required to remit the difference between these two amounts to the government on a regular basis (quarterly or annually).
Should your payroll exceed $400,000 you must pay Employer Health Tax to the Ontario government. This is a tax of approximately 2% on your gross payroll in excess of $400,000.
If your business requires you to hire subcontractors, you may need to report transactions with them to the government.
It is very important that you keep track of all the government compliance steps above and file returns by their due dates, or you may be subject to strict penalties. Please email us for to receive a PDF of our Government Compliance Checklist to help you with these registrations and filings.