At a Glance
Choosing the right payroll software is one of the most consequential decisions a Canadian small business owner makes. Get it wrong, and you are looking at missed CRA remittance deadlines, incorrect T4s, late ROEs, and penalties that compound quickly. Unlike other business software categories where a mediocre choice simply means a clunky workflow, payroll mistakes have direct financial and legal consequences. The Canada Revenue Agency does not offer grace periods for payroll errors, and Service Canada requires Record of Employment filings within five days of an employee's last day.
At LedgerLogic, we manage payroll for dozens of Canadian small businesses across multiple provinces. We have tested every major Canadian payroll platform, integrated them with Xero and QuickBooks, and handled the CRA correspondence when things go sideways. This guide reflects what we actually use in practice — not vendor marketing claims.
Affiliate Disclosure: LedgerLogic is a Wagepoint partner. We may earn a commission if you sign up through our links at no extra cost to you. We only recommend tools we use with our own clients.
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Our CPA team sets up and manages payroll for Canadian businesses. We configure Wagepoint or Rise, handle CRA remittances, and ensure T4s and ROEs are filed correctly.
What Canadian Payroll Software Must Handle
Before comparing specific tools, it is essential to understand what Canadian payroll actually involves. Payroll in Canada is regulated at both the federal and provincial levels, and any software you choose must handle the full compliance stack — not just direct deposits.
CRA source deductions. Every pay period, employers must calculate and withhold three mandatory deductions from each employee: Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and federal and provincial income tax. These deductions must be remitted to the CRA on schedule — monthly for most small businesses, accelerated (up to four times per month) for larger employers. The CRA payroll deductions guide outlines the full remittance schedule and thresholds. Late remittances trigger penalties starting at 3% for the first day late, escalating to 10% for habitual late filers, plus interest.
T4 and T4A slips. At year-end, employers must issue T4 slips summarising each employee's total earnings, deductions, and taxable benefits. These must be filed with the CRA by the last day of February. T4A slips are required for contractor payments, retiring allowances, and certain other payments. Your payroll software must generate these slips accurately and file them electronically with the CRA.
Record of Employment (ROE). When an employee stops working — whether due to termination, layoff, leave, or resignation — the employer must issue an ROE to Service Canada within five calendar days. The ROE is the document Service Canada uses to determine EI eligibility. Late or inaccurate ROEs delay your former employee's benefits and can result in employer penalties. Good payroll software generates and files electronic ROEs directly with Service Canada.
Provincial variations. Payroll in Quebec is significantly more complex than in other provinces. Quebec employers must handle contributions to the Quebec Pension Plan (QPP) instead of CPP, the Quebec Parental Insurance Plan (QPIP, also called RQAP), and provincial income tax calculated separately from federal. Manitoba, Ontario, and other provinces have employer health taxes or levies that must be calculated and remitted separately. Not every payroll tool handles every provincial requirement equally well — Quebec support in particular is a differentiator.
Workers' compensation. Depending on your province and industry, you may need to report payroll to your provincial workers' compensation board (WorkSafeBC, WSIB in Ontario, CNESST in Quebec, etc.). Some payroll tools track this automatically; others require manual reporting.
Direct deposit. All modern payroll tools support direct deposit to Canadian bank accounts. The differences lie in how many days before payday you need to initiate the run, whether the tool supports same-day or next-day deposits, and how bank holidays and weekends are handled.
CPA Pro Tip: Before signing up for any payroll software, confirm it supports electronic ROE filing (not just ROE generation). Printing and mailing paper ROEs is still technically permitted, but electronic filing through Service Canada's ROE Web is faster, creates a permanent record, and eliminates the risk of lost documents. Most modern platforms file electronically by default.
Wagepoint — Our Default Recommendation for Xero Users
Wagepoint is the payroll tool we use with approximately 70% of our bookkeeping clients who run payroll. It is a Canadian-built platform designed specifically for small businesses, and its integration with Xero is the cleanest in the market.
Why we recommend it. Wagepoint does one thing exceptionally well: Canadian payroll compliance. It calculates CPP, EI, and income tax deductions correctly for all provinces including Quebec. It files T4s and T4As with the CRA at year-end. It generates and files electronic ROEs with Service Canada. It remits source deductions to the CRA on your behalf. And it posts clean, properly categorised journal entries to Xero after every pay run — no manual entry, no reconciliation gaps.
The Xero integration is what sets it apart. After each pay run, Wagepoint automatically creates a journal entry in Xero that breaks down gross wages, CPP employer and employee portions, EI employer and employee portions, income tax withheld, net pay, and any taxable benefits. This means your Xero books are always in sync with your payroll, and your tax compliance reporting starts from an accurate foundation.
Pricing. Wagepoint uses simple per-employee pricing: a base fee plus a per-employee charge per pay run. For businesses with 1 to 10 employees running bi-weekly payroll, this typically works out to be highly competitive. Verify current pricing at wagepoint.com as rates may have changed since this article was published.
Strengths
- Simplest interface of any Canadian payroll tool — most clients learn to run payroll in under 30 minutes
- Reliable CRA compliance with automated source deduction remittances
- Automatic journal entries posted to Xero after each pay run — no manual reconciliation
- Electronic ROE filing directly with Service Canada
- T4 and T4A generation and CRA e-filing at year-end
- Full Quebec support including QPP, QPIP, and provincial tax
Limitations
- No built-in HR features — no performance reviews, no onboarding workflows, no document management
- No time tracking — you need a separate tool (such as Clockify, TSheets, or Deputy) and enter hours manually or via integration
- Benefits administration is limited — you cannot manage group health or dental plans through Wagepoint
- Reporting is functional but basic compared to enterprise-grade alternatives
CPA Pro Tip: When setting up Wagepoint's Xero integration, take time to map payroll accounts correctly from the start. Create dedicated liability accounts for CPP payable, EI payable, and income tax payable rather than dumping everything into a generic "payroll liabilities" account. This makes your CRA remittance reconciliation significantly easier at year-end.
Rise People — Best for Growing Teams Needing HR
Rise People is the platform we recommend when a business outgrows Wagepoint's payroll-only model and needs combined payroll, HR, and benefits administration. It is built for Canadian businesses with 10 to 50 employees who want to consolidate multiple HR functions into a single platform.
Why it works for growing teams. Rise combines payroll processing with HR management (employee records, onboarding, time-off tracking, performance reviews) and group benefits administration. Instead of running payroll in Wagepoint, time tracking in Clockify, benefits in a separate broker portal, and employee documents in Google Drive, Rise consolidates these into one platform. For businesses hiring actively, this consolidation reduces administrative overhead considerably.
Payroll capabilities. Rise handles the full Canadian payroll compliance stack: CPP/EI/income tax deductions, CRA remittances, T4s, ROEs, and direct deposit. It supports all provinces including Quebec. The payroll engine is solid — we have not encountered calculation errors in our experience with client implementations.
Xero integration. Rise offers a Xero integration that syncs payroll data after each run. The integration is reliable, though the journal entry detail is not quite as granular as Wagepoint's. You may need to do minor mapping adjustments during initial setup.
Pricing. Rise is more expensive than Wagepoint on a per-employee basis, which reflects the additional HR and benefits features. For businesses that only need payroll, the added cost is not justified. For businesses that genuinely use the HR features, the consolidation savings typically offset the higher price. Verify current pricing at rise.com as plans and rates change periodically.
Strengths
- Combined payroll, HR, and benefits administration in a single Canadian platform
- Group benefits management integrated directly with payroll deductions
- Employee self-service portal for pay stubs, T4s, time-off requests, and personal information updates
- Onboarding workflows that reduce administrative work when hiring new employees
- Full provincial support including Quebec
Limitations
- More expensive than Wagepoint for businesses that only need payroll processing
- Setup takes longer — expect one to two weeks for full implementation with HR and benefits
- The interface has more complexity than Wagepoint, which means a steeper learning curve for business owners running their own payroll
- Xero integration is functional but less seamless than Wagepoint's native connection
Humi — Canadian All-in-One HR and Payroll
Humi is a Toronto-based platform that positions itself as an all-in-one solution for Canadian businesses. It covers payroll, HR, benefits, time tracking, and recruiting — all built from the ground up for the Canadian market. For businesses that want a single platform to manage the entire employee lifecycle, Humi is worth evaluating.
The Canadian-first advantage. Unlike American platforms that bolt on Canadian compliance as an afterthought, Humi was designed for Canadian payroll from day one. CPP, EI, provincial tax calculations, T4 generation, ROE filing, and CRA remittances are core features, not add-ons. The platform also handles workers' compensation tracking for most provinces.
Time tracking included. Unlike Wagepoint and Rise, Humi includes built-in time tracking. Employees clock in and out through the platform, and hours flow directly into payroll calculations. For businesses with hourly workers, this eliminates the manual step of importing hours from a separate time tracking tool.
Recruiting and onboarding. Humi includes applicant tracking (job postings, candidate management) and onboarding workflows. For businesses that hire regularly, this is a meaningful addition that replaces separate tools like BreezyHR or Workable.
Pricing. Humi offers modular pricing where you can choose which features you need. The payroll module is priced per employee per month. Adding HR, benefits, and time tracking increases the per-employee cost. Verify current pricing at humi.ca as their pricing structure has evolved over time.
Strengths
- Canadian-first design — built specifically for Canadian payroll, tax, and employment law requirements
- Modern, clean interface that is intuitive for non-accountants
- Comprehensive feature set: payroll, HR, benefits, time tracking, and recruiting in one platform
- Built-in time tracking that flows directly into payroll — no third-party tool needed
- Active development with regular feature releases
Limitations
- Newer platform with less CPA/bookkeeper adoption compared to Wagepoint — fewer accountants are familiar with it
- Xero integration is less mature than Wagepoint's — journal entry mapping may require more manual configuration
- The breadth of features means the platform is more complex than a payroll-only tool
- Customer support response times can be slower during peak periods (year-end T4 season)
Ceridian Dayforce — Enterprise Grade
Ceridian Dayforce is included in this comparison for completeness, but we want to be direct: it is overkill for most small businesses. Dayforce is an enterprise-grade human capital management (HCM) platform designed for organisations with 50 or more employees, complex payroll structures, and dedicated HR departments.
When it makes sense. If your business has multiple locations across provinces, unionised employees, complex shift scheduling, or regulatory reporting requirements beyond standard CRA compliance, Dayforce handles it. Its compliance engine is the most comprehensive in the Canadian market — it tracks federal, provincial, and municipal requirements in real time and updates automatically when legislation changes.
When it does not make sense. If you have fewer than 50 employees and straightforward payroll needs, Dayforce is unnecessarily complex and expensive. The implementation alone typically takes three to six months and requires dedicated project management. Monthly costs are substantially higher than any of the other tools in this comparison. We do not recommend it for the typical small business owner reading this guide.
Strengths
- Handles any level of payroll complexity — multi-province, multi-union, multi-jurisdiction
- Best-in-class compliance engine with automatic legislative updates
- Comprehensive workforce management: scheduling, absence tracking, performance, learning
- Real-time payroll calculation engine — changes reflect immediately rather than in batch
Limitations
- Enterprise pricing — typically requires custom quoting and annual contracts
- Implementation takes three to six months with dedicated project support
- Overkill for businesses under 50 employees with standard payroll needs
- No Xero integration — designed for enterprise ERP systems, not cloud accounting platforms popular with small businesses
QuickBooks Payroll (Built-in)
QuickBooks Online offers a built-in payroll add-on for Canadian businesses. If your business is already committed to the QuickBooks ecosystem and does not use Xero, the built-in payroll module avoids the need for a separate integration entirely.
The integration advantage. Because payroll is built directly into QuickBooks Online, there is no separate sync or journal entry mapping. Payroll transactions appear natively in your chart of accounts, and employee information lives in the same system as your accounting data. For businesses that want minimal software complexity, this is the simplest setup.
The trade-offs. QuickBooks payroll in Canada handles the basics: CPP, EI, income tax deductions, direct deposit, T4 generation, and CRA e-filing. However, the experience is less polished than dedicated payroll tools. ROE generation can be clunky — some users report needing to manually verify and correct information before filing. Year-end T4 processing is functional but not as streamlined as Wagepoint's guided workflow. If you are evaluating whether Xero is worth switching to, payroll integration quality is one of the factors to consider.
Strengths
- No separate integration required — payroll is built directly into QuickBooks Online
- Familiar interface for existing QuickBooks users
- Handles standard Canadian payroll compliance (CPP, EI, income tax, T4s)
- Often bundled at a discount with QuickBooks Online subscriptions
Limitations
- Less flexible than dedicated payroll tools — customisation options are limited
- ROE filing process can be clunky and may require manual verification
- T4 year-end workflow is functional but not as guided as Wagepoint's
- No HR features, benefits administration, or time tracking beyond basic timesheet entry
- Only works within the QuickBooks ecosystem — no Xero integration option
Canadian Payroll Software Comparison
The following table summarises how each platform handles the core requirements for Canadian payroll. Use it as a quick reference alongside the detailed reviews above.
| Feature | Wagepoint | Rise People | Humi | Ceridian Dayforce | QBO Payroll |
|---|---|---|---|---|---|
| CRA Remittances | Automated | Automated | Automated | Automated | Automated |
| T4/T4A Filing | Yes (e-file) | Yes (e-file) | Yes (e-file) | Yes (e-file) | Yes (e-file) |
| ROE Filing | Electronic | Electronic | Electronic | Electronic | Manual verification needed |
| Xero Integration | Excellent (auto journal entries) | Good | Developing | None | N/A (QBO only) |
| QBO Integration | Yes | Yes | Yes | None | Built-in |
| Per-Employee Pricing | ~$4/employee/run | Higher (includes HR) | Modular pricing | Custom enterprise | Bundled with QBO |
| HR Features | None | Comprehensive | Comprehensive | Enterprise-grade | None |
| Time Tracking | No (third-party) | Limited | Built-in | Built-in | Basic timesheets |
| Benefits Admin | No | Yes | Yes | Yes | No |
| Mobile App | Employee self-service | Yes | Yes | Yes | Via QBO app |
| Quebec Support | Full (QPP, QPIP) | Full (QPP, QPIP) | Full (QPP, QPIP) | Full | Full |
| Best For | 1–10 employees, Xero users | 10–50 employees needing HR | 10–50 employees, all-in-one | 50+ employees, complex payroll | QBO users, simple payroll |
For a broader look at payroll tools and alternatives, visit our payroll tools hub which includes additional options and filtering by business size.
Our Recommended Payroll Stack
After years of implementing and managing payroll for Canadian small businesses, our recommendations are straightforward. The right choice depends on your team size, accounting software, and whether you need HR features beyond payroll.
1 to 10 employees on Xero: Wagepoint. This is our default recommendation and the tool we use with the majority of our clients. Wagepoint's Xero integration is the best in the market, the interface is simple enough for business owners to run payroll themselves, and CRA compliance is handled automatically. If you need time tracking, add a dedicated tool like Clockify or Deputy and import hours into Wagepoint.
10 to 50 employees needing HR and benefits: Rise People or Humi. If you are hiring actively and need onboarding workflows, employee self-service, benefits administration, and time-off management alongside payroll, either Rise or Humi is the better choice. Rise has a more established track record with CPA firms. Humi offers a more modern interface and includes time tracking natively. Both handle Canadian compliance well. Evaluate both based on which feature set aligns with your priorities.
50+ employees with complex requirements: Ceridian Dayforce. If you have multi-province operations, unionised employees, complex shift scheduling, or regulatory reporting requirements that exceed what small business tools can handle, Dayforce is the enterprise-grade solution. Budget for a three to six month implementation and dedicated project management.
QuickBooks users with simple payroll: QBO built-in payroll. If you are already on QuickBooks Online and have no plans to switch to Xero, the built-in payroll module avoids the complexity of a separate integration. Accept that the ROE and T4 workflows are less polished, and consider having your bookkeeper handle year-end filings to avoid errors.
CPA Pro Tip: Regardless of which payroll tool you choose, run a parallel test for the first two pay periods. Process payroll in both your old system (or manually) and the new tool, then compare the results. This catches mapping errors, provincial tax miscalculations, and benefit deduction discrepancies before they become real problems with real employees. The cost of running parallel for two cycles is trivial compared to the cost of correcting a month of incorrect pay stubs.
If you are unsure which payroll solution fits your business, our team can help. We set up and manage payroll for Canadian businesses as part of our bookkeeping services, and we offer payroll system selection as part of our advisory engagements. We configure the tool, map it to your accounting software, and handle CRA compliance so you can focus on running your business.
Frequently Asked Questions
Seb ProstCPA, Ex-CRA
Licensed CPA with 10+ years of experience, including work with the Canada Revenue Agency. Founder of LedgerLogic, a cloud accounting firm serving Canadian SMEs. Xero Certified Advisor.
