How to choose payroll software for a Canadian small business

What to know before you start

Shortlist only products that fit your province and employment situations. Then choose between a workflow your team operates and services you want automated. PayHr Manual offers free payroll software for its supported workflows; optional automation costs extra. A paid competitor may still be the better fit if its included work solves a problem your team cannot comfortably own.

Start with your actual payroll needs

Write down the number of employees and contractors you pay, how often you pay them, and who prepares and approves each run. Include the less frequent work: adding a new employee, correcting an entry, exporting records for your bookkeeper and preparing year-end documents. A short list of real tasks is more useful than a long list of features you may never use.

Ask each provider which provinces and employment situations it supports. Canadian branding alone does not establish coverage for your team. PayHr’s employee workflow is Ontario-first, and Quebec payroll is not currently supported. Confirm fit before entering opening balances or approving a run.

Separate payroll records from moving money

Preparing a payroll run, paying employees and sending deductions to the CRA are separate steps. Ask what each button actually does. Does approval only save the payroll record? Is a payment instruction also created? Where can you see that a transfer completed?

In PayHr, approval records the run; it does not by itself transfer wages or remit taxes. Your business needs to follow and verify the payment workflow separately. This distinction is especially useful when comparing a free manual plan with paid automation.

Compare the cost of a real month

Use the same example for every provider: your team size, expected pay runs and any documents you expect to issue. Include setup charges and optional services. Check whether prices are per month, per employee, per run or per document.

PayHr includes unlimited employees, contractors and manual pay runs without a subscription. Optional automated employee, contractor and tax payments cost $6 per employee or contractor per automated run. Five people across two automated runs would therefore cost $60 in service fees. The one-time automated-payment setup fee is $25; optional filing fees and applicable taxes are additional. Wages and remittances are separate from service fees. See the pricing calculator for your own scenario.

Try the workflow, including an awkward case

Review how employee records, timesheets, payroll statements and exports fit together. Walk through a new hire, a missing timesheet and a correction request. Ask who can change pay details and where previous runs remain available. A clear review screen matters more than a promise that everything is automatic.

Also check onboarding requirements. PayHr saves a payment method during workspace setup for optional usage. Manual payroll is still free. Confirm the setup steps and supported workflows in the getting started guide.

Make a short decision checklist

• Does the product support our province and employment situations?
• Can we distinguish preparation, approval, payment and remittance?
• What would our normal month cost, including optional services?
• Can we find prior statements and export the records we need?
• Who will review payroll, and how will they get help?

For the employer responsibilities behind that workflow, use the CRA payroll hub. When you are ready to prepare a run, follow our first payroll checklist.

Use the same demo brief with every provider

Write a fictional five-person payroll with one hourly worker, one recent pay change and one missing timesheet. Ask how a preparer finds the issue, how a reviewer signs off and how the team confirms payment. Then request the report your bookkeeper would use. Record the answer to each step, not a general impression that the dashboard looks simple.

Do not use real employee identifiers in an early demonstration. Once the workflow passes that exercise, repeat the review with your business’s actual requirements through an appropriate secure setup process.

Illustrative scenario, not a customer case study. Confirm the process and requirements for your own business.

Frequently asked questions

Should a free plan be ruled out?

No. Check whether its workflow covers the work you need and whether your team can own the remaining tasks. PayHr Manual is free, while payments and manual submissions remain your responsibility.

What should I confirm before switching?

Agree on the final run in the old system, the first run in the new one, opening balances and the person responsible for reconciliation. Use the first-payroll checklist to organise that review.

Put your next payday in order

Explore PayHr’s payroll software and free manual payroll plan, or follow the workspace setup guide.