What’s payroll really costing you?

Time & labour

Assumption	Value	Source
Base hours per pay run	2.0 hrs	Industry surveys
Per-employee processing time	4 min	Industry estimate
Annual turnover (ad-hoc runs & ROEs)	12%	Mercer Canada
Hours per termination run	1.5 hrs	Final pay, vacation calc, processing
Bonus runs per year	2	Conservative (annual + mid-year)
Hours per bonus run	2.0 hrs	Setup, verify, process
Leave rate (for ROEs)	6%	Maternity, medical, layoffs
Hours per ROE	0.75 hrs	Prepare, verify codes, file
Year-end base hours	8 hrs	Reconciliation, CRA filing, testing
Year-end per-employee hours	0.4 hrs	Verify earnings, CPP/EI/tax, T4 gen
Time per run with Fully Managed Payroll	0.75 hrs	Rise internal (submit + approve)

Error & compliance

Assumption	Value	Source
Base errors per pay run	0.5	EY (scaled for SMB)
Additional errors per employee per run	0.02	Derived from EY payroll study
Cost per error	$407	Ernst & Young (converted to CAD)
Termination error rate	25%	Industry estimate (vacation miscalc, severance)
Cost per termination error	$400	Industry estimate (higher: legal exposure)
T4 amendment rate	4%	Industry estimate
Cost per T4 amendment	$150	Industry estimate (re-file, re-issue)
Late remittance probability	15%/yr	Conservative estimate
CRA remittance penalty	10% first; 20% repeat	Canada.ca (on amount over $500)
Remittance as % of gross payroll	25%	CPP + EI + income tax estimate
T4 late filing probability	10%/yr	Conservative estimate
T4 late filing penalty	$10–15/day	CRA ($10/day ≤50 returns; $15/day 51–500)

Retention & opportunity

Assumption	Value	Source
Average salary	$65,000	Conservative (StatsCanada avg ~$75K)
Payroll-attributable turnover	1.5%/yr	Derived from HRdive.com
Replacement cost	33% of salary	Employee Benefit News (SHRM cites 50–200%)
Strategic value multiplier	2.5–4x	Varies by role (higher for executives)