084 | Employer cost to hire an employee

I was speaking with the owner of a new #startup earlier this week, and the question on his mind was: "How much does it really cost me to hire a new employee?"

He understood that employers are required to pay into #CPP and #EI, but he wanted some nitty gritty details.

If he hires a new employee for $25.00/hour, what are the payroll costs in addition to the employee wage?

Each year #CRA sets an amount that employers are required to remit for CPP and EI. Some years the rate doesn't increase, and some years it does. In 2023, the CPP Employer rate has increased to 5.95%. The EI employer rate is $2.28 per $100.00 of insurable earnings - or 2.28%.

With these numbers factored into a $25.00 per hour employee, as an employer, your actual cost per hour for this employee will be $25 + $1.49 + $0.57 = $27.06 per hour.

How do you track employer contributions?

We highly recommend you avoid spreadsheets or manual tracking on paper for these costs. There are a multitude of online cloud accounting software platforms, such as #Quickbooks, that have a payroll module factored in. We enjoy using the #Wagepoint add-on in Quickbooks as well. Use these to calculate and remit to stay on track with your source deduction payments.

As always, we are here to help! Contact Us with questions.

#bigrose #bookkeeping #payroll