Switching payroll software mid year

Why a Mid-Year Payroll Software Switch Can Make Sense for Canadian Accounting Practices

Written by Rob Lockie | Jun 27, 2025 5:59:08 PM

As we hit the mid-year mark, many accounting professionals take time to evaluate their systems and vendors — especially those that impact client service and compliance. One area often ripe for review? Payroll software.

At Côté and Associates, we believe June and July present the perfect window for Canadian firms to consider whether their payroll solution still meets their needs. Whether it’s clunky client access, lack of CRA compliance features, or poor integration with your accounting stack — now is the time to make a strategic change.

Why Switch Payroll Software Mid-Year?

Here are common reasons Canadian firms consider switching payroll platforms during the year:

  • Poor customer service: Delays in support, unresolved tickets, or lack of bilingual help.

  • Filing errors: Issues with CRA source deductions, WSIB/WCB submissions, or ROEs.

  • Missing integrations: Incompatibility with tools like QBO Canada, Xero, or project management platforms.

  • Limited HR functions: No PTO tracking, vacation accruals, or employee onboarding support.

  • Restricted employee access: No secure portal for pay stubs, tax slips, or personal updates.

  • Fiscal year alignment: Some firms and clients begin their fiscal year in the summer and budget for software upgrades in Q2 or Q3.

📊 72% of Canadian firms now include payroll in their monthly service bundles.
— 2025 Canadian Accounting Tech Survey

Key Considerations Before Switching

Before making the switch, ask:

  • Can the new provider support multiple pay frequencies (weekly, biweekly, semi-monthly)?

  • Are they equipped to handle T4A, T5018, and ROE filings?

  • Do they manage the migration of YTD payroll data, or will you?

  • Will the previous provider handle Q1/Q2 filings accurately?

  • Can they manage complex scenarios like shareholder benefits, clergy housing, or subcontractor payroll?

Also, check for:

✅ CRA business number compatibility
✅ Secure data transfer options
✅ Client-level access to payroll reports and employee portals
✅ Integration with your core accounting software

Get Your Payroll Data Ready

Start collecting necessary information 30–60 days before your target switch date. You’ll need:

  • Employee details (SIN, address, email)

  • Direct deposit banking info

  • CRA business number and provincial WSIB/WCB account numbers

  • Year-to-date wage, bonus, and deduction history

  • TD1 forms and garnishment documents

  • Vacation accrual balances and policies

  • Copies of prior PD7A or ROE filings

  • Any special pay structures (e.g., tipped wages, clergy exemptions)

💡 Best practice: Keep your old platform live for one final run to ensure continuity and accurate reconciliation.

Smart Questions to Ask New Vendors

To ensure a smooth transition, ask these during your evaluation:

  • Do you import historical payroll data? Is there a cost?

  • Will you test integrations with QuickBooks or other tools before launch?

  • Is training provided for our team and our clients?

  • What support channels are available — email, phone, live chat, or bilingual help centre?

Communication Is Key During the Switch

Give your clients early notice. They may need to:

  • Learn a new portal interface

  • Adjust how they request vacation or view pay history

  • Reconfirm employee details and banking info

Review data carefully before your first live payroll to ensure:

✅ Prior wages are accurate
✅ Deductions and benefits are mapped properly
✅ Taxation is calculated correctly, especially for CRA and provincial requirements

When Special Tax Situations Drive the Change

Many Canadian firms make a mid-year switch due to special tax needs, including:

  • Proper handling of clergy housing allowances

  • Shareholder health benefit deductions and reporting

  • Owner/manager T4 optimization

  • Subcontractor ROE and T5018 requirements

  • Cross-border payroll for U.S. contractors or remote workers

Not all payroll software can manage these edge cases. If yours can’t — it’s time to change.

Côté and Associates Is Here to Help

Switching payroll software mid-year doesn’t have to be stressful. With the right partner and planning, it can actually streamline your operations, improve compliance, and create a better client experience.

At Côté and Associates, we help Canadian firms:

✅ Evaluate current payroll software gaps
✅ Plan a migration timeline aligned with compliance deadlines
✅ Assist with onboarding and training
✅ Ensure CRA compliance and YTD tax accuracy
✅ Deliver bilingual support to your team and clients

Let’s make payroll easier — for you and your clients.

📞 Contact Côté and Associates today to schedule a no-obligation payroll review and migration consultation. We’ll help you assess whether now is the right time to make your switch — and guide you through every step of the transition.