One Way to Make Tax Time Less Taxing for You and Your Employees
With the tax deadline a month us now, many of us have either had a happy, sad, or surprising time (or a combination of all three). If you’re a business owner, there’s one benefit you can offer to help employees come tax time. It’s a great way to set your benefit offerings apart from your competitors.
A GRSP (or a Group Retirement Savings Plan) helps employers help their employees save for retirement. Like an RRSP, contributions to a GRSP are tax-deductible. So in a way, you are able to pay employees more, without employees having to pay more taxes (albeit with money that can’t be accessed right away).
If there’s one thing people like procrastinating on, it’s saving for retirement. As an employer, helping employees with this important (but all often forgotten) part of life, is going to win big bonus points.
Many employers are attracting younger talent by helping pay student loans, but the next logical step is helping people pay for retirement as well. The younger you start saving, the more beneficial your savings. For young people, helping save for retirement can be a great thing for an employer to help with.
Why Your Employees Will Get Behind a GRSP:
- The largest benefit to your employees will be helping with returns come tax time. Contributions to a GRSP or RRSP could move people into different tax brackets having them pay less taxes overall
- Payments are made directly off a paystub it makes saving easy and not another thing to think about and manage outside of the office.
- Those who save together stay together. People who contribute and save for retirement together will have consolidation as they save together for retirement.
- Most GRSPs have online software are easy to manage online and you can see your savings grow
- You don’t need a full office for a GRSP to make sense. As long as you have 2 people per year contributing a minimum of $10,000 per year.
Bonus: Add A DPSP for More Tax Saving:
In a win-win situation for your employees, you can combine a GRSP with a deferred profit sharing plan (DPSP). A DPSP allows employees to share profits with the company and only withdraw money and claim as income when they are ready. This allows an employer to save on payroll taxes, and allows your employee to only withdraw money when they choose to do so (which could also save money on taxes year to year).
This stuff can get pretty technical, so if you’re interested, don’t hesitate to reach out! We would love to help you find a solution that works best for you and your employees to save that tax money next year.