Payroll in Ontario for Small Businesses: Monthly, Bi-Weekly, or Hourly Guide
Choosing the right payroll structure is a critical decision for any small business in Ontario. It affects not just your cash flow and compliance, but also your employee satisfaction and administrative workload.
📚 Table of Contents
- Monthly Payroll
- Bi-Weekly Payroll
- Hourly Payroll
- Comparison Table
- What's Best for New Businesses?
- Bonus Tips
- Final Conclusion
- FAQ
🗓️ Monthly Payroll
Employees are paid once a month, typically at the end of the month. This method is less common in hourly-based industries like cleaning or retail.
Pros:- Fewer payroll runs = less admin work
- Stable budgeting for employers
- Employees may dislike waiting 30 days
- Harder to track hours for hourly staff
📆 Bi-Weekly Payroll
Employees are paid every two weeks (26 times a year). Very common in Canada and ideal for service-based businesses.
Pros:- More frequent pay = happier employees
- Balances admin work and cash flow
- Extra payrolls (2 or 3 per month)
- Higher admin cost than monthly
⏱️ Hourly Payroll
Employees are paid based on hours worked. Usually combined with weekly or bi-weekly cycles.
Pros:- Perfect for part-time or seasonal workers
- Only pay for work done
- Requires precise time tracking
- Can fluctuate monthly costs
📊 Payroll Comparison Table
| Type | Pros | Cons | Best For |
|---|---|---|---|
| Monthly | Low admin workload, simple | Harder for hourly tracking, employee dissatisfaction | Salaried professionals |
| Bi-Weekly | Frequent pay, fair tracking | More admin work | Service-based businesses |
| Hourly | Only pay for work done | Requires tight management | Part-time or contract workers |
💡 What’s Best for a New Business?
For small businesses just starting in Ontario, a **bi-weekly payroll** combined with **hourly tracking** is often the most flexible and scalable option. It keeps employees satisfied while helping owners manage short-term cash flow and workload.
💼 Bonus Tips for Payroll Success
- Use software like QuickBooks Payroll for automation and CRA compliance
- Track hours with mobile apps (GPS time clocks work well)
- Set reminders for tax filings and remittances
- Consult a payroll expert annually
- Always keep digital employee records
✅ Final Thoughts
Your payroll structure should match your business model. Startups in cleaning, hospitality, and trades benefit most from hourly + bi-weekly setups. Focus on flexibility, compliance, and employee happiness.
❓ FAQ: Ontario Payroll for Small Businesses
1. Is bi-weekly payroll required by law?No, but you must pay employees at least monthly by Ontario law.
2. Do I need WSIB registration?If you have employees, yes. It’s mandatory in most industries.
3. How do I remit payroll deductions?Through CRA’s My Business Account or using payroll software.
4. Can I pay contractors bi-weekly?Yes, but ensure they’re classified correctly (contractor vs employee).
5. What happens if I pay late?CRA may fine you for late remittances. Always pay on time!
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