Signs It’s Time to Outsource Payroll: What Every Small Business Should Know

Payroll might look easy at first glance. Calculate hours, pay employees, and you’re done. But if you’ve been running a business for a while, you know the reality: payroll comes with a lot of moving parts, CRA deadlines, and compliance rules that can quickly make it feel overwhelming. 

Choosing to outsource payroll to a bookkeeper or accountant can be a game-changer. Paired with the right software, it can take payroll completely off your stress list. Let’s explore when it makes sense to outsource payroll, why the right tools matter, and how to know if you’ve reached that point.

The Hidden Complexity of Payroll 

At first, payroll might just mean cutting a cheque but once you dive deeper, you realize all of what you’re responsible for: 

• Source deductions: Canada Pension Plan (CPP), Employment Insurance (EI), and  income tax. 
• Employer contributions: Your share of CPP and EI. 
• Year-end forms: T4s, T4As, and Records of Employment (ROEs). 
• Vacation pay, sick days and statutory holiday pay, which vary by province. 
• Wage changes, promotions, terminations, benefits 

It’s not just about completing payroll — it’s about getting it right. Mistakes can snowball into CRA penalties, frustrated employees, and hours of extra work you didn’t plan for.. 

Signs It’s Time to Outsource Payroll 

Here are some clear signs it might be time to hand payroll over to a bookkeeper or accountant:

1. Payroll Takes Too Much Time 

If payroll is taking hours every pay period, that’s time you’re not spending on growing your business. Instead of chasing deadlines and double-checking deductions, consider outsourcing to reclaim your time. Outsourcing means your bookkeeper can automate deductions, generate pay stubs, and file remittances in just a few clicks. 

2. CRA Deadlines Stress 

Did you know that missing a payroll remittance deadline triggers automatic CRA penalties? By outsourcing to a bookkeeper or accountant, they’ll ensure the data is correct and reconciled every time. 

3. Compliance Confusion

Every province has different rules for overtime, vacation pay, public holiday pay and  terminations.  If you’re often second-guessing your calculations, you’re not alone. Payroll support or outsourcing can take the guesswork out of compliance and keep you focused on running your business.

4. Your Team Is Growing 

Hiring more staff, adding contractors, or offering benefits adds complexity. A reliable system and a bookkeeper’s guidance can help keep everything organized so paydays stay accurate and on time, no matter how your team scales.

5. You’ve Made (or Fear) Mistakes 

Even a small deduction error can snowball into CRA adjustments and employee  frustration. A bookkeeper using the right modern payroll software ensures every calculation is precise and traceable. 

The Benefits of Outsourcing Payroll 

Outsourcing payroll gives you time, accuracy, and peace of mind. Here’s what you gain: 

• Accuracy every time – Professionals use payroll software and proven processes to ensure deductions, remittances, and slips are correct. 
• On-time remittances – Payroll professionals track all due dates and submit source deductions on time, keeping your business in good standing.
• Year-end support – T4s and T4As are handled properly and delivered to employees stress-free. 
• Confidentiality and security – Protecting employee data is critical. With a professional managing payroll, you reduce the risk of breaches, errors, or sensitive information falling into the wrong hands.
• Scalability – As your team grows, your bookkeeper adapts your payroll system seamlessly to keep you on track and compliant. 

Outsourcing Doesn’t Mean Losing Control 

Many small business owners worry, “If I outsource payroll, will I still know  what’s going on?” The answer is absolutely. What changes is that a bookkeeper or accountant manages the behind-the-scenes details — deductions, CRA submissions, and reporting — so everything runs smoothly and stress-free.

Final Thoughts: Know When to Hand It Off 

Every small business owner has a different “payroll pain threshold”— that  point where doing it yourself becomes more of a burden than a benefit. You hire employees to do the work you can’t or don’t want to do  yourself, and payroll is no different. Outsourcing to a bookkeeper or accountant isn’t just a cost, it’s an investment in accuracy, compliance, and peace of mind.

Ask yourself: is payroll helping you move your business forward, or is it holding you back? If it’s the latter, it may be time to hand payroll over and focus on what you do best, growing your business.

Written by Kerri Bouffard

Kerri Bouffard founded her bookkeeping practice 21 years ago with a mission to do more than balance books. Based in Northern Ontario, she partners with small business owners to take the stress out of paperwork, streamline workflows, and give them back time to focus on what matters most. Grounded in integrity, compassion, and grit, Kerri brings both expertise and a deep commitment to her community to every client relationship.

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