18 It’s Farming. And It’s Better. Better Farming | April 2024 Farm owners & payroll How Ontario farm workers get compensated has become more formalized and organized, and both employees and employers are seeing the benefits. Levi Derksen, senior manager with ag-focused accounting firm Buckberger Baerg & Partners, says that payrolls have become more common as farm sizes have increased – as has their need for full-time workers. “The trend started as farms grew, with more work being done by non-family members,” he says. Kathy Neufeld, management and advisory services coordinator with Stark & Marsh, says farming has changed significantly over the past generation, and so has farm owners’ progress with financial reporting. “Producers are aware of compliance with Canada Revenue Agency (CRA), so accountability has become more significant,” she says. “We see more organized payroll practices and engaging professionals to assist and/or process from beginning to end.” Stark & Marsh offers farmers accounting, tax, audit, consulting, and financial planning services. Employer benefits The appeal for interested producers are the numerous benefits that payrolls can offer. “Having employees on payroll can formalize an employment relationship, leading to better employee retention,” says Derksen. He also explains that arm’s length wages are allowable expenses for AgriStability, increasing the likelihood of an AgriStability claim in a poor farming year. Farm Management Canada executive director Heather Watson points to additional benefits like predictable expenses for budgeting and cash flow management. Neufeld further explains that accurate and up-to-date payroll processing gives farm operators a better understanding of their weekly, monthly, and annual payroll expenses and how many employees their farm can afford. Entry-level personnel or a manager can take some responsibilities off owners and let them be more productive elsewhere. Also, automated payments are a plus. “I would argue that the more employees, the greater the chance automated payroll would be beneficial to the farm operation,” says Watson. Not only is this a timesaver, but there’s a green aspect of not using paper for cheques or paystubs – the latter which can be sent in PDF form via email, says Neufeld. Employee benefits The advantages of payrolls also extend to employees. “The main benefit is Canada Pension Plan (CPP) contributions matched by the employers, and Employment Insurance (EI) contributions, which allows employees to potentially collect EI in the future,” says Derksen. Employees may also access additional benefits like Registered Retirement Savings Plan (RRSP) contributions, says Watson. “The benefits of payroll for employees are an increased sense of security ‘DO YOUR BEST & HIRE THE REST.’ FARM PAYROLL PRACTICES By RICHARD KAMCHEN Geoff Small/E+ photo
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