Best practices when hiring employees

1. Clearly define job roles and expectations – Before posting a job, create a detailed job description outlining duties, qualifications, and expectations.
2. Hire for skills and fit – Technical skills are important, but cultural fit and adaptability can be just as critical.
3. Use structured hiring processes – Standardized application screening, interviews, and evaluations ensure fairness and effectiveness.
4. Leverage local networks and word-of-mouth – Rural communities often have strong local connections; use them to find trustworthy candidates.
5. Offer competitive but realistic compensation – Even if budgets are tight, highlight benefits like flexible hours, work-life balance, or growth opportunities.

Effectively advertising job opportunities to attract qualified candidates

• Post on multiple platforms – Use job boards (Indeed, LinkedIn), local community boards, business associations, and social media.
• Engage local schools and training centers – Partnering with colleges, trade schools, and workforce development programs can bring in fresh talent.
• Make job descriptions appealing – Highlight company culture, growth potential, and benefits beyond salary.
• Use employee referrals – Current employees can recommend great candidates who align with the business needs.
• Attend local networking events – Job fairs, industry meetups, and community events can provide access to untapped talent.

Effective interview and candidate evaluation process

• Prepare interview questions in advance – Focus on both technical skills and soft skills.
• Use structured interviews – Ask each candidate the same set of key questions to fairly compare responses.
• Incorporate practical evaluations – Consider asking candidates to perform relevant tasks or solve real-world problems.
• Conduct multiple rounds if necessary – Start with a phone screening before inviting top candidates for an in-person interview.
• Check references thoroughly – Speak with previous employers to verify skills, reliability, and work ethic.

Basic management skills that are essential for small business owners

• Leadership & Decision-Making – Ability to inspire, motivate, and make clear business decisions that align with long-term goals.
• Financial Management – Understanding budgets, cash flow, and profitability to keep the business financially healthy.
• Time Management & Organization – Balancing multiple responsibilities without losing track of priorities.
• Communication & Conflict Resolution – Effectively conveying expectations and resolving workplace issues proactively.
• Delegation & Team Building – Trusting employees to take ownership of tasks while fostering a strong workplace culture.
• Adaptability & Problem-Solving – Navigating challenges and adjusting business strategies when needed.
• Customer Service & Relationship Management – Keeping customers engaged and ensuring a positive experience.

Setting and managing employee performance goals

• Define SMART Goals – Goals should be Specific, Measurable, Achievable, Relevant, and Time-bound.
• Align Goals with Business Needs – Employee targets should support the overall objectives of the business.
• Use Regular Check-ins – Conduct one-on-one meetings to provide feedback and track progress.
• Encourage Growth & Development – Offer training, mentorship, and opportunities for advancement.
• Recognize & Reward Achievements – Acknowledging good work boosts morale and retention.
• Adjust Goals as Needed – Be flexible in refining expectations based on performance and market changes.

Critical employment laws for small businesses

• Employment Standards – Covers minimum wage, overtime pay, vacation entitlements, and statutory holidays.
• Workplace Safety – Businesses must follow occupational health and safety regulations to provide a safe work environment.
• Anti-Discrimination & Human Rights – Employers cannot discriminate based on race, gender, disability, or other protected characteristics.
• Payroll & Tax Compliance – Employers must deduct and remit taxes, including Canada Pension Plan (CPP) and Employment Insurance (EI) contributions.
• Termination & Severance – Employers must provide proper notice or severance pay when terminating employees.
• Privacy & Employee Data Protection – Businesses must handle employee information responsibly and comply with privacy laws.

Handling terminations and workplace disputes legally and effectively

• Follow Proper Termination Procedures – Provide written notice or severance pay as required by law.
• Differentiate Between ‘With Cause’ & ‘Without Cause’ Termination – Terminating an employee for misconduct requires documented evidence.
• Use Progressive Discipline – Before termination, offer warnings and corrective actions to improve performance.
• Resolve Workplace Disputes Professionally – Encourage open communication, mediation, and fair resolution processes.
• Seek Legal Advice When Necessary – If unsure about termination or dispute resolution, consult an employment lawyer.

Setting fair wages and compensation packages

1.  Research Industry Standards – Use government wage databases, job boards, and industry reports to determine fair pay rates.
2. Consider Cost of Living – Adjust wages based on local living expenses, especially in rural areas where affordability varies.
3. Offer Performance-Based Incentives – Bonuses, profit-sharing, or commission structures can motivate employees while managing costs.
4. Provide Non-Monetary Perks – Flexible schedules, remote work options, and professional development opportunities can enhance compensation.
5. Ensure Transparency – Clearly communicate pay structures and growth opportunities to build trust and engagement.

Benefits to offer employees to enhance retention

•  Health & Wellness Benefits – Health Spending Accounts (HSA), mental health support, and gym memberships provide affordable alternatives to traditional insurance.
• Retirement & Financial Security – Group RRSPs with employer matching help employees plan for the future.
• Work-Life Balance Perks – Flexible work arrangements, paid time off, and parental leave support employee well-being.
• Professional Development – Training programs, tuition reimbursement, and mentorship opportunities encourage growth.
• Recognition & Rewards – Employee appreciation programs, milestone bonuses, and team-building events boost morale.

Can the Business Pay the Business Owner?

There are 3 options for business owners for getting paid in a sole proprietorship or partnership:

1. Pay themselves a wage and make payroll deductions as though they are an employee. Each pay period they will receive their pay less deductions.
2. Take a “drawing”, which is a set amount each pay period.
3. A little of both: a wage that they can top up with drawings when they can afford it.

Note: If they take drawings, then understand this isn’t what they will be taxed on. They will still be taxed on the net profit of the business. The business owner and partners will also make CPP payments and quarterly tax payments.

Tax Preparation Basics

There’s no getting around it – you’ll have to pay tax if you make a profit. Although this is primarily a job for your accountant/bookkeeper or advisor to help you calculate how much, it’s important that you understand the basics.

There are three main business taxes: GST/HST, income tax and payroll tax. The federal government charges a tax on most things you buy in Canada, which is what’s called GST/HST. There are three different taxes:

• GST (Goods and Services Tax)
• PST (Provincial Sales Tax)
• HST (Harmonized Sales Tax), which is a combination of the above two.

As a business you charge all your customers tax on what you sell.

How Does HST Work?

• HST in not a business tax: it is a consumer tax.
• When you invoice you’ll add the applicable tax to the amount they pay.
• When you invoice, the HST is owed to the government whether you get paid or not.  This is where allowance for doubtful comes in.
• When you pay for any business expenses, you pay the tax that applies.
• Each tax period you only pay the government the difference between what you’ve collected in HST and what you’ve paid in HST (if you collected more than paid out, otherwise you get a credit).
• Note: you don’t charge your customers GST/PST/HST for goods and services that are zero rated (such as basic groceries, rental accommodation, medical & dental services, financial services and day care).
• You must register your business if your sales exceed $30,000 in a fiscal year

Income Tax

Every business that makes a profit must pay a percentage of the profit as a business tax. There are some variations depending on the legal structure:

• Sole proprietors report the profit on their personal income tax return.
• Partnerships decide on the profit split between partners, and then each person reports their profit on their own personal return.
• Corporations are much more complicated; a corporation must file its own tax return as a separate entity from the shareholders.

Next steps: It’s very important to get professional advice and support about the best way to structure your business for tax. Get advice early from your financial advisor or talk to the CRA

Payroll Tax

If the business has employees, or if the business intends to pay the owner a wage, then you’ll also need to deduct the income tax from their pay and submit it to the government before you pay the employee.

The business owner will need to:

• Open a payroll account
• Get the right information from your employees
• Calculate the right deductions
• Keep all the records you need to keep (for up to six years)
• As you’d expect, there are a few other things to consider such as:
  • Pension plan (CPP) and Employment Insurance premiums.
  • Any employee taxable benefits such as the use of a company car or parking.
  • Any employee commissions.

Get help early from your financial advisor so you know you are doing everything right.