The ePayroll project

The ePayroll project is a Government of Canada initiative to modernize how employers send payroll, employment, and demographic information to government departments and agencies.

Currently, employers send payroll information to the government at a particular time, such as when they issue a T4 slip, or a Record of Employment for employment insurance. Employers often provide the same information to multiple government departments and agencies. 

The goal of ePayroll is to reduce the administrative burden for Canadian employers and streamline the delivery of government benefits and services.

About ePayroll in Canada

Our vision for ePayroll in Canada is a service through which Canadian employers can securely send payroll, employment, and demographic information to a protected Government of Canada repository. Government departments and agencies could then access the information when they need it for programs and services without having to go back to employers to ask for the information repeatedly. 

Some expected benefits of an ePayroll approach include:

• reducing the administrative burden on Canadian employers and businesses
• improving speed and accuracy in delivering government services and benefits, such as employment insurance benefits and future wage subsidies, to Canadians through access to more accurate and up-to-date employment data

ePayroll is not a payroll processing system run by the government. Canadian employers will still be free to choose the payroll processing system that suits them.

About the ePayroll project

The Canada Revenue Agency (CRA) is leading this project for the Government of Canada in partnership with Employment and Social Development Canada (ESDC) and the Office of the Chief Information Officer (OCIO) in the Treasury Board of Canada Secretariat. 

The ePayroll project is part of the government’s commitment in Budget 2021 to propose a real-time ePayroll solution to better enable service to Canadian Business.

From 2021 to 2024, the ePayroll Project Team will consult with other government departments, businesses, and employers of all sizes, employees, stakeholder groups and associations, and payroll software and service providers. Stakeholders will help identify challenges and opportunities, and provide input on what features they would like to see in a future ePayroll solution.

The ePayroll project is not currently implementing any changes to how payroll, demographic, or employment information is collected. Input from these stakeholder consultations will inform the planning work CRA and ESDC have been doing towards the implementation of a real-time ePayroll system, and ensure that businesses of all sizes benefit from this work. 

Public consultation on an ePayroll solution

The CRA and ESDC want to improve government programs and services by better understanding clients’ needs and expectations when interacting with those programs and services.

The consultations included discussions exploring:

• participants’ current experiences as they relate to reporting payroll and employment data to the Government
• how participants see ePayroll supporting them as employers or business administrators
• how ePayroll could play a role in building a stronger and more efficient tax and social service system

Who we spoke to

The consultations on the development of an ePayroll solution brought together 155 business owners, payroll professionals, and payroll software and service providers, representing businesses of all sizes, Indigenous businesses, and non-profit and community organizations from across the country. The formal consultations included eight in-person sessions and six virtual sessions.

What we learned during the formal consultations

Participants were cautiously optimistic about the idea of an ePayroll solution. They recognized that ePayroll could provide employers with some benefits, which include: 

• reducing some administrative burden when reporting to the Government of Canada, especially in cases where irregularities occur in their payroll or tax reporting processes
• increasing the efficiency and accessibility of communication with the CRA and ESDC, by improving data available to the telephone agents
• the ability to use ePayroll to:
  • verify and reconcile information
  • get help with complex calculations
  • send remittance payments

However, they viewed the primary benefits as being with their employees or with the broader Canadian public. These perceived benefits include:

• the automated and efficient delivery of benefits and services like employment insurance, or future emergency benefits like the Canada emergency response benefit
• an opportunity to streamline and simplify tax-filing processes
• the potential to integrate ePayroll data with other digital platforms (like CRA MyAccount) to give individuals more oversight over their tax information, store past T4 slips and income tax reports, as well as receive more information and communications related to tax and social services

Participants highlighted some key concerns including important questions around security, private information, consent, and data storage and protection. Also, they advised that these concerns are of paramount importance. They recognized that many questions remain unanswered, as the service is still to be developed, but they implore the Project Team to work slowly and methodically to build a secure data management and storage program. They also advocated for proper testing before rolling out the service. For example, they highlighted:

• the security risks associated with the transfer and storage of personal information, including questions about archiving and accessing past records

Other concerns included: 

• the Government of Canada’s experience implementing digital solutions
• the cost of compliance for businesses, either to onboard to digital payroll programs, or increased costs incurred through a software provider
• the risk of resistance among businesses that operate manually, or that benefit from providing additional tax-related services that might be eliminated by ePayroll

Participants believe that the Government of Canada needs to take the time to properly plan, build, and then test an ePayroll solution before it is implemented for all employers. They commend the CRA and ESDC for taking the time to consult with them as employers, but encourage the ePayroll Project Team to conduct further consultations with the business community and with the Canadian public. The participants recognize that ePayroll is an opportunity to lay the foundation for transformational change in how Canada administers tax and social services. But this will only be the case if, and when there is buy-in from Canadians: buy-in that will be easier to build alongside ePayroll, from the ground-up, by working with Canadians to deliver this solution.

Related information

A copy of the full report is available here : Public consultation on an ePayroll solution - What we learned Report - ca-ciconline.com

ePayroll roundtables

Between May 2023 and October 2023, the CRA held seven roundtable events across Canada with employers, stakeholder groups and payroll service providers to create awareness and validate findings from previous consultations and public opinion research.

Who we spoke to

The roundtables brought together 88 employers and payroll professionals representing local businesses of all sizes, Indigenous businesses, and non-profit and community organizations. 

What we learned during the roundtables

Similar to the consultations, participants who attended the roundtables largely expressed cautious optimism with regard to an ePayroll solution in Canada. Following a presentation on what ePayroll is envisioned to be, participants noted that some potential benefits could be:

• the ability to make corrections and adjustments throughout the year
• storing data in a secure database and having access to the data, rather than relying on paper copies, which can easily get lost
• faster and more efficient filing and delivery of benefits and services
• having one solution where other government organizations can access required data, rather than having to submit or enter data multiple times would relieve a lot of their current burden
• the Government would have a better idea of Canadians’ payroll information and, in the event of another pandemic, an ePayroll solution could result in less or no overpayments
• the idea of transparency and being able to view one’s payroll and tax information in real time

Concerns shared by participants in each location were very similar and mostly related to data privacy and security and the move from paper to digital, especially for those with limited access to the Internet or technology. Overall, the most discussed concerns amongst participants were:

• If an employer, for any reason (such as no access to the Internet on the day they should be submitting), could not submit information on time, would they incur penalties
  • A similar concern expressed by participants is whether there would be exceptions for those with no access to the Internet or to technology. They wondered whether there might be some exceptions in these cases
• Issues with logging into My Account or My Service Account and lockouts. Participants were concerned what the process would be with ePayroll should they experience trouble with log-ins or locked accounts
• The data stored in this solution will be very sensitive, so participants were concerned with how protected the data would be
• Concerns over whether this could lead to higher prices for payroll software

During these roundtable discussions, participants expressed the need for the Government of Canada to continue these discussions with stakeholders as the project moves forward. They agreed that this input from stakeholders is vital to planning and implementing a future ePayroll solution, and that consultations should be done during each phase of the project. 

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Contact us

email: ePayrollCWG-PaieelectroniqueGTC@cra-arc.gc.ca

Related information

Budget 2021 section 10.3