Prioritizing payroll pays off
Many modern farm employers have made payroll a bigger priority and upped their game in how they manage it.
“It’s definitely gotten more sophisticated and more complex,” says Steve Tippe, manager of product training and support for FCC AgExpert.
When he joined AgExpert in 2008, most farmers entered labour costs as casual wages under their expenses. Very few remitted deductions or managed benefits.
Now, most farmers that have employees are remitting on a monthly basis to the Canada Revenue Agency (CRA), Tippe says.
With growing farms and the heightened need for outside personnel, payroll practices have by necessity become more prioritized and organized.
Benefits
“Payroll is a priority because with hiring personnel, the employees want to receive their pay on time, and deductions need to be remitted and accounted for so the employee can file their tax returns,” says Kathy Neufeld, the operations manager for Stark & Marsh CPA LLP in Swift Current, Sask.
One major benefit of organized payrolls is greater employee retention.
One major benefit of organized payrolls is greater employee retention.
“Employees appreciate efficiencies in receiving their pay on time, and people are the resource we need to keep our organizations viable,” Neufeld says.
Adhering to best practices comes with the benefit of avoiding penalties and interest, which are high and accumulate fast, she says.
Seeking help
Mandated farm labour practices have changed over time, such as how casual employment is defined, as well as employer obligations like overtime and holiday pay, Tippe says.
According to Neufeld, your accountant’s office is the best place to start with questions, adding provincial governments’ websites can also provide compliance information.
She explains that standards for agriculture and other industries and businesses differ, making it an advantage to identify those differences as one engages in hiring practices and compensation.
Do it yourself
More farmers who handle their own payrolls are using software, such as AgExpert Accounting. With the click of a button, you can produce records of employment and year-end T4s, Tippe says.
Its built-in payroll function, designed with the agriculture industry in mind, allows employers to:
create paycheques for an employee
track payroll benefits
process CRA payroll remittances
set up custom payroll deductions
Contracting out payrolls
There are cases when it might make sense for an outside firm to take on the task of your payroll. Neufeld recommends asking yourself these questions:
Gauge your knowledge about payroll processing. How much time can you devote to learning the process and commit to processing payroll?
Determine the complexity of your payroll. Do you offer profit sharing or a bonus structure, insurance, benefits like rent or use of a business-owned vehicle?
Do you need to hire a manager to track hours? Do they process payroll or let someone else handle it?
From an AgriSuccess article by Richard Kamchen.
In this episode, Marty and Carlie talk about how social media and tech can be valuable additions to any farm management toolkit.