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Start early: Setting the foundation

One of the biggest mistakes employers make is waiting until the new year to address tax requirements.

“To prepare for a smooth tax season, organizations should review their payroll and tax processes early to ensure all employee data is accurate,” said Ciambella.

Starting early means verifying employee information (such as addresses and Social Insurance Numbers) and reviewing any payroll adjustments made throughout the year. This includes changes in benefit plans, new hires, or updates in regulatory requirements. If a new provincial rule alters how certain expenses are taxed, it’s best to catch it long before tax slips go out.

Synchronizing departmental calendars

Tax season isn’t a single uniform period for everyone.

“Payroll teams’ big push is getting the new year tax changes in,” said Patterson “Finance is working through all of their corporate filings. HR handles communications to employees.”

Because each department is busy at slightly different times, a mutual calendar of key deadlines helps co-ordinate efforts. Payroll’s priority might be generating T4s in January and February, while finance focuses on corporate tax deadlines, and HR must stay ready to field questions from employees.

Sharing a timeline ensures one team isn’t left scrambling at the last minute.

Streamline communications with employees

Patterson said HR often bears the brunt of employee queries, even when the root cause is a regulatory shift beyond the employer’s control. Workers rarely see the behind-the-scenes calculations or government-mandated changes — what they notice is a fluctuation in their net pay.

“They need to present it in way to the employee population that makes sense — what’s just happened and why they might be presented with a different (amount) than previously,” she said. “HR is the steward, or the carrier, of the message to employees to try to translate it into something that they can consume and that they can understand the implications. ”

A joint FAQ document can help. By bringing together payroll’s technical details, finance’s cost analysis, and HR’s communication skills, employers can anticipate the top employee questions and provide answers in plain language.

Messages should also be tailored and delivered only to those they impact. For example, Patterson pointed to a new rule in Manitoba for 2025 that affects individuals earning over $200,000.

“That’s not of interest to everyone, but it is going to be of interest to those who are impacted,” she said.

Leverage technology for accuracy

Ciambella said “technology is critical in streamlining tax tasks by integrating payroll and HR systems, ensuring smooth data flow.” Automation can handle repetitive tasks such as calculating deductions and generating reports. The result is fewer manual errors and faster completion times.

Patterson said her organization, Dayforce, issues an annual document summarizing “what’s changed” for pay period one. If your organization uses a similar platform or an outsourced provider, find out if they offer a comparable feature or update.

Ensuring your software is current reduces the risk of outdated tax tables or incorrect codes.

Designate a point person — or three

Cross-departmental ownership is key. HR, payroll, and finance all have distinct roles, but each team needs a dedicated point person who can represent their area’s priorities. This ensures no questions or tasks go unanswered.

“Implementing clear communication protocols and designating compliance champions within each department can help with collaboration,” Ciambella said.

Such champions streamline decision-making. Instead of emailing a long list of people, you can rely on a few knowledgeable contacts to confirm details quickly — whether it’s a question about pension adjustments or an inquiry into a new provincial tax bracket.

Small businesses: Outsource if necessary

Tax season can be even more daunting for small enterprises lacking in-house expertise. There’s no shame in looking outside the walls for help, said Patterson.

“It's absolutely understandable why that model [outsourcing payroll or certain tasks] has some appeal to an employer who says, ‘I'm a busy sole proprietor,’” she said.

She stressed that outsourcing is “still a partnership.” Even if a small company entrusts day-to-day payroll tasks to a provider, it must still communicate major changes — like a big hiring push or shifts in compensation structure — to ensure accurate returns.

Ciambella added that technology aimed at small businesses can also fill knowledge gaps while reducing manual workloads.

Manage employee expectations

HR plays the key role in preparing employees for changes in their year-end forms or paycheques. For instance, if employees receive new T4 codes or if certain taxable benefits increase, a proactive email or group meeting can help. Employees are often focused on net pay fluctuations — getting ahead of concerns alleviates confusion and a lineup at the door when cheques are deposited.

Patterson added that “a lot of people… might have done their TD1 form 20 years ago,” not realizing they can adjust it if their circumstances change. Encouraging employees to review their tax withholdings can prevent over- or under-deductions, which in turn reduces panic at tax time.

Foster a culture of shared responsibility

Ultimately, seamless tax seasons hinge on a culture where HR, payroll, and finance cooperate year-round — not just in the frantic weeks of January and February. When these departments align on goals and keep communication open, they can spot potential errors early, craft consistent employee messaging, and navigate new regulations with minimal disruption.

Ciambella underscored the difference strong collaboration can make: “Investing in technology that automates tasks can significantly enhance efficiency and accuracy… Maintaining open communication across departments is essential.”

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