If you own a business, tax season is stressful, but believe it or not, it’s also stressful for your employees. As an employer, you can play a crucial role in making this process easier and less daunting for them—helping them to stay focused on work. Want to know how to keep morale up and stress down across your business next tax season? Here are a few of our tips:
Provide Accurate and Timely Documentation
One of the simplest but most important ways employers can assist their employees during tax season is by ensuring that they provide accurate and timely documentation. This includes T4 slips, which detail employees’ income, deductions, and contributions. These forms are required so that employees can file their taxes accurately.
Employers should ensure that T4 slips are prepared and distributed to employees by the deadline set by the Canada Revenue Agency (CRA), typically by the end of February. However, the earlier you can get employees their T4 slips, the better. This will give employees ample time to gather any additional financial documents they require. It will also provide them with time to plan should they owe taxes at the end of the year.
Educate Your Employees
Taxes are complicated; some employees may not be well-versed in the intricacies of the Canadian tax system. Offering educational resources or workshops can be incredibly beneficial. Consider organizing tax information sessions or providing employees with guides on how to prepare their taxes.
How can you do this? Invite tax experts or accountants to address common tax-related questions and concerns. Depending on the size of your business and the resources you have available, you could offer lunch & learn sessions or provide tips from professional tax accountants. These initiatives may reduce anxiety and improve overall compliance by assisting employees to understand taxes.
Encourage RRSP Contributions
Registered Retirement Savings Plans (RRSPs) are an excellent way for employees to reduce their taxable income and save for retirement. You can encourage automatic paycheque deductions and mentor employees to ensure they understand why making these contributions is essential. This will demonstrate your interest in their futures, since these contributions can lower their annual tax liability and increase their long-term financial security.
Flexible Work Arrangements
For employees with complicated taxes, filing can be cumbersome. Offering flexible work arrangements during tax season can help employees better manage their time and access expert help if they need it. Consider allowing flexible hours, remote work options, or even additional time off. If an employee needs to visit their accountant or gather documents on a work day, don’t penalize them. Reduced stress and increased productivity can be the result of this thoughtful approach.
Work With An Accountant
When your business works closely with an accountant throughout the year, you are protecting both yourself and your employees. Accountants will ensure your business stays compliant with tax laws and improve accuracy across all of your finances, making sure that you have taken the appropriate amount of tax out of each employee’s paycheque. This can reduce frustration or costly tax bills when it comes time for your employees to file their taxes.
Communicate with Clarity
Clear communication is vital in helping employees understand their tax-related responsibilities and the benefits they could potentially get from various government programs. If you have an HR department , make sure they’ve been briefed by an accountant and are ready and available to answer employees’ tax-related questions. If there will be changes to your employees’ tax deductions, ensure you share them with them so they understand why these changes are happening.
Stay Updated on Tax Changes
The Canadian tax system is complicated, and it is also subject to change. It’s essential for employers to stay updated with these changes. Ensuring that your payroll and accounting departments are well-informed about new tax rules and regulations will help your employees (and you) come tax season. If you’re a small business owner, you might find that you gain a lot of value from outsourcing your accounting needs to an expert, so you can feel confident that they’re being handled professionally and accurately.
As a Canadian employer, your commitment to making tax season easier for your employees not only fosters a positive workplace culture but also results in happier, more productive employees. By providing timely and accurate documentation, educating your workforce, and offering support in various forms, you can help your employees navigate the complexities of the tax system.
Working with an accountant is one of the easiest ways to make tax season easier for you and your employees. Find out how MMT Chartered Professional Accountants can provide you and your employees with expert accounting support.