You can use the pay run process to pay your contractors and subcontractor - it's simple to setup and convenient.
If you are unsure whether the person you have hired is a contractor or an employee, see the guidelines from CRA HERE.
Once you have determined that you have contractors, here's how to enroll your subcontractor and perform a pay run for them.
To pay your subcontractors and contractors you'll first set them up in your payroll profile.
1. Login to your account and go to the EMPLOYEES area. You'll be adding a new entry so select the 'Add Member' button on your Team or On-Boarding Dashboard.
2. Choose Contractor or Construction Contractor
3. Enter the pertinent details for this subcontractor - Name, email and mobile Phone #.
4. Invite them to PayChequer via email or SMS
5. Enter Personal Details. If SIN is not required for this worker enter 999-999-998
6. Enter payment structure. Note you MUST enter something even if it is different than how you plan to pay this person.
*Pro-Tip- set your contractors to a different pay cycle than your other employees if you want to run them separately. Because they are contractors and no taxes are deducted it is ok if you run them on an inconsistent schedule unlike for employees.
*Advanced Payroll Options will allow you to input a GL code for this person.
7. Enter YTD if there is any to ensure T4As are accurate at year end
8. Follow the prompts to add in benefits, deductions or vacation as needed.
All set and ready to run payroll for your contractors!
Paying a subcontractor or vendor during a pay run
1. Start your pay run and select the appropriate start, end and cycle dates
2. If you set the subcontractor as 'salaried' they will be visible on the 'Salaries' stage of the pay run. If you've set them as 'time-based' they will be visible on the 'Timesheets' stage
3. Modify the amount as necessary, approve and finalize your pay run. The subcontractor's payment will be included as part of the pay run.
- Adding GST / HST and sales taxes: use the custom pay rules feature to create a custom 'benefit' called 'sales tax' and apply it to the subcontractor's profile as a percentage of the gross
To learn more about pay rules see HERE
- By setting the profile to 'contractor' you'll be marking any regular earnings as tax-exempt, EI, CPP and QPIP-exempt. You'll also be telling the system to generate a T4A slip at year end for this profile.
Business Payments vs Contractor setup in payroll
By setting up a contractor in payroll you will be able to track payments and issue T4A slips at year end. If you do not need T4A slips (typically when another business invoices you for services or goods) then you can use Business Payments to electronically pay the recipient. Business Payments will not issue T4A slips at year-end.
To learn more about Business Payments see HERE