How Can I Do Payroll Myself for Free is a frequently searched financial topic across Canada. At Maxpro, we provide professional insights, transparent data, and practical recommendations to help business owners make smarter financial decisions and maintain compliance.
We deliver a broad range of Tax Accounting Services in BC and other locations across British Columbia.
Step-by-Step Instructions
- Collect and organize all necessary data.
- Register required business or payroll accounts with CRA.
- Use approved templates or accounting software.
- Record transactions or payments accurately.
- Review all reports before final submission.
Following these steps will ensure accurate and compliant results. Maxpro can help you automate each stage for simplicity.
Our other tax services:
- Personal Tax Filing
- Business Tax Preparation
- Payroll Processing Services Vancouver
- WCB Employer Registration Coquitlam
- ROE Service BC
1. Collect and Organize Employee Information
Start by gathering all the key details for each employee:
Full name, address, and SIN
Start date and date of birth
Signed TD1 federal and provincial forms
Pay rate, schedule, benefits, and vacation details
Keep everything organized in a single spreadsheet with tabs for employee info, pay periods, and deductions.
2. Register a Payroll Account with CRA
If you don’t already have one, register a Business Number (BN) and add a Payroll (RP) account under it on the CRA website.
This allows you to legally deduct and remit taxes, CPP, and EI.
CRA will also assign your remitter type, which determines how often you need to send payroll deductions (monthly or more frequently).
3. Use Free Tools and Templates
You don’t need expensive payroll software.
Use the CRA’s Payroll Deductions Online Calculator (PDOC) — it’s accurate and completely free.
Main deductions to calculate:
CPP: 5.95% (matched by employer) up to the yearly maximum
EI: 1.64% for employee, 1.4× that amount for employer
Income Tax: calculated by PDOC based on TD1 forms
Record all results in your spreadsheet so you can track year-to-date totals.
4. Record Each Pay Run Accurately
For every pay period:
Enter gross pay (salary or hourly × hours worked)
Use PDOC to calculate Tax, CPP, and EI
Subtract deductions to get Net Pay
Pay employees and note payment details
Add up all deductions (Tax + CPP + EI) — this is what you’ll remit to CRA
You can make CRA payments online through your bank or CRA’s “My Business Account.”
5. Review and Submit Reports
Before you send anything:
Make sure total payroll equals what you paid through your bank
Confirm year-to-date amounts for each employee are correct
Stop CPP/EI once the employee hits their annual maximum
At year-end, issue T4 slips to employees and file them with CRA by February 28 of the following year.
Our other financial services:
- Financial Service BC
- Business Evaluation Services BC
- Professional Business Plan Writing
- Financial Advisor for Budgeting
- Due Diligence Company
Do Your Own Payroll vs Using Payroll Software
Doing payroll manually gives you full control and costs nothing, but it also takes time and requires accuracy. Payroll software, on the other hand, automates calculations, deductions, and CRA remittances — but usually comes with monthly fees.
| Aspect | Doing Payroll Yourself | Using Payroll Software |
|---|---|---|
| Cost | Free (only your time) | Monthly or per-employee fee |
| Control | 100% manual control over every entry | Automated calculations; less manual tracking |
| Learning Curve | Requires understanding CPP, EI, tax rules | Minimal — software handles compliance |
| Error Risk | Higher, depends on your accuracy | Lower, but still needs human review |
| Flexibility | Fully customizable spreadsheets | Limited to system settings and features |
| Year-End Reports (T4s) | Manual creation | Auto-generated with one click |
Verdict:
If you have fewer than five employees and a simple pay structure, doing it yourself with CRA tools and a spreadsheet is completely manageable.
But if your business grows or has complex deductions, switching to reliable payroll software can save hours and prevent mistakes.
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How Can I Do Payroll Myself for Free? Practical Tools and Resources
To do payroll on your own, you only need a few free and official tools that handle calculations and record-keeping:
1. CRA Payroll Deductions Online Calculator (PDOC)
Use it to calculate accurate deductions for CPP, EI, and Income Tax. Just enter employee pay, province, and TD1 credits — it gives you exact results instantly.
2. TD1 Federal & Provincial Forms (2025 versions)
Each employee must complete these to determine how much tax should be withheld.
3. CRA My Business Account
This is where you remit your source deductions (tax, CPP, EI) and view your remitter type and due dates.
4. Google Sheets or Excel Template
Use a simple spreadsheet to track:
Employee details
Pay periods
CPP/EI calculations
Tax withheld
Net pay and CRA remittances
You can easily automate formulas for CPP and EI caps so you’ll never over-deduct.
5. CRA Employer Guide (Payroll Deductions)
A free online reference for all deduction rates, limits, and year-end reporting requirements.
These tools together let you run a fully compliant payroll system — with zero paid software.
Simplify Payroll with Our Professional Services
Even though DIY payroll is possible, it can quickly become time-consuming as your business grows. Mistakes in deductions, missed deadlines, or incorrect T4 filings can lead to penalties or CRA audits.
Our professional Payroll Services in Canada handle everything for you — accurately and on time:
Automated calculations for CPP, EI, and income tax
Direct deposit to employees
Monthly and year-end CRA filings (T4, ROE, summaries)
Ongoing support for remittances and adjustments
We use advanced payroll systems while ensuring full compliance with Canadian regulations — so you can focus on running your business, not calculating taxes.
Get a free consultation today to see how we can simplify your payroll and save you hours every month.
FAQ
- How often should I review this financial process?
- Maxpro provides clear, step-by-step support and transparent guidance for every financial service we offer.
- Can I manage this task without professional help?
- Maxpro provides clear, step-by-step support and transparent guidance for every financial service we offer.
- What tools or software does Maxpro recommend?
- Maxpro provides clear, step-by-step support and transparent guidance for every financial service we offer.
- Are these processes different for small businesses?
- Maxpro provides clear, step-by-step support and transparent guidance for every financial service we offer.
- How can I reduce errors or costs?
- Maxpro provides clear, step-by-step support and transparent guidance for every financial service we offer.
- Does Maxpro provide personalized consultations?
- Maxpro provides clear, step-by-step support and transparent guidance for every financial service we offer.