The Cost of Employer Compliance and Public Policy Implications


In addition to the approximately $9.9 billion in employer costs related to compliance activities, there is a cost for activities directly related to additional work required as a result of non-compliance (actual or perceived).

The report quantifies the approximate cost of these additional resource activities borne by employers to be $1.7 billion, or 14 per cent of the total cost of compliance.

These additional activities include:

  • Responding to payroll-related information requests from the CRA
  • Facilitating payroll audits
  • Processing trust exam notifications
  • Conducting Pensionable and Insurable Earnings Reviews (PIERs)
  • Meeting provincially regulated payroll obligations such as employer health and post-secondary education taxes and levies, as well as Workers’ Compensation Board requirements

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In estimating the total cost of employer compliance for this report, PwC Canada did not incorporate indirect costs such as:

  • Legal fees
  • Third party provider costs
  • Service charges from payroll software service providers
  • Professional membership fees
  • Activities not directly related to the payroll function, such as strategy and planning
  • Hours required by individuals in finance for approving overall payroll reporting

These indirect costs are significant.