6 worked Prior-Year Payroll Correction case studies — the position a client typically comes to us with, what we do, and what it is worth. Each is an illustrative example built on the rules that apply to prior-year payroll correction work, not a specific client's file.
Case Study 1 · Scaling without breaking
Second-Province Expansion Handled, $71,000 Of Cash Released — Seasonal Landscaping Employer, Moncton
Client: A landscaping company with seasonal staff · Where: Moncton, New Brunswick · Engagement: 6 weeks, fixed fee
Cash released$71,000
New registrationsComplete on day one
Compliance gapsNone
The situation — A landscaping company with seasonal staff, Moncton, New Brunswick
Revenue at a landscaping company with seasonal staff in Moncton, New Brunswick was up sharply and cash was tighter than ever. Underneath it sat long-term contractors who met every test for employment.
What we did for A landscaping company with seasonal staff, Moncton, New Brunswick
We reviewed each contractor against the CRA’s control and integration tests and converted those who met the employment tests. We priced the transition before it was forced by a ruling. Every new obligation was set up before it was triggered, not after. That covered registration, remittance frequency and provincial filing.
The result — A landscaping company with seasonal staff, Moncton, New Brunswick
$71,000 of cash was released from the working capital cycle. The expansion completed with every registration and filing obligation covered from day one.
Case Study 2 · Backlog brought current
3 Years Filed, $16,000 Removed From The Assessed Balance — Multi-Province Driver Fleet, Brampton
Client: A logistics operator with drivers in three provinces · Where: Brampton, Ontario · Engagement: 10 weeks, fixed fee
Years filed3
Assessed balance removed$16,000
CollectionsStopped
The situation — A logistics operator with drivers in three provinces, Brampton, Ontario
A logistics operator with drivers in three provinces in Brampton, Ontario had not filed for 3 years. The CRA had issued arbitrary assessments. The business was carrying T4 slips filed weeks after the deadline with no relief request made on the per-slip penalty. That came on top of a growing interest balance.
What we did for A logistics operator with drivers in three provinces, Brampton, Ontario
We started with the oldest year and worked forward so each year's closing balances fed the next. We reconstructed vehicle logbooks, calculated the standby charge and operating benefit properly, and amended the affected T4s. We filed the years in sequence rather than all at once.
The result — A logistics operator with drivers in three provinces, Brampton, Ontario
Every year is now filed and assessed on actual figures. The notional assessments were vacated and $16,000 of the estimated balance came off, with a payment arrangement covering the rest.
Case Study 3 · Records and systems rebuilt
Books Rebuilt From Source, $14,500 In Unclaimed Input Tax Found — Higher-Frequency Remitter, Hamilton
Client: An employer whose remittance frequency moved up a threshold · Where: Hamilton, Ontario · Engagement: 7 weeks, fixed fee
Unclaimed tax found$14,500
Records rebuilt27 months
ProcessDocumented
The situation — An employer whose remittance frequency moved up a threshold, Hamilton, Ontario
An employer whose remittance frequency moved up a threshold in Hamilton, Ontario could not answer basic questions about its own numbers. A bonus accrued to bring the year-end tax bill down and still unpaid more than a year later sat between the bank statements and the ledger.
What we did for An employer whose remittance frequency moved up a threshold, Hamilton, Ontario
We reconciled the payroll register, general ledger and T4 summary to the cent, then filed the amended slips. We then documented the process so the work does not depend on any one person remembering how it was done.
The result — An employer whose remittance frequency moved up a threshold, Hamilton, Ontario
Records rebuilt and reconciled, $14,500 recovered in input tax credits that the old file could not support, and a documented monthly process now in place.
Case Study 4 · CRA review defended
$39,000 Proposed Adjustment Withdrawn In Full — Part-Time Program Employer, Calgary
Client: A charity with part-time program staff · Where: Calgary, Alberta · Engagement: 10 weeks, fixed fee
Adjustment withdrawn$39,000
File closed in10 weeks
Penalties assessedNone
The situation — A charity with part-time program staff, Calgary, Alberta
A charity with part-time program staff in Calgary, Alberta received a proposal letter opening a review of prior-year payroll correction. The CRA had identified T4s that did not agree to the payroll register or the general ledger. It proposed an adjustment of $39,000, with 30 days to respond.
What we did for A charity with part-time program staff, Calgary, Alberta
We treated the response as an evidence exercise rather than an argument. We paid the accrued bonus inside the 180-day window and kept the deduction in the year it was accrued. We then indexed every supporting document against the specific line the auditor had questioned.
The result — A charity with part-time program staff, Calgary, Alberta
The proposed adjustment was withdrawn in full — all $39,000 of it. The file closed in 10 weeks with no change to the assessed amounts and no penalty.
Case Study 5 · Structure rebuilt
Reorganisation Completed Tax-Deferred, $73,000 Saved Each Year — High-Turnover Restaurant, Barrie
Client: A restaurant with heavy seasonal turnover · Where: Barrie, Ontario · Engagement: 11 weeks, fixed fee
Annual saving$73,000
Tax on reorganisationDeferred
Elections filedOn time
The situation — A restaurant with heavy seasonal turnover, Barrie, Ontario
A restaurant with heavy seasonal turnover in Barrie, Ontario had outgrown the structure it started with. Company vehicles used personally with no logbook and no taxable benefit reported was the immediate problem. The longer-term one was that the structure blocked the next step.
What we did for A restaurant with heavy seasonal turnover, Barrie, Ontario
We mapped the current structure and modelled the target. Then we corrected the CPP and EI withholding for the balance of the year. We set the employee up to recover the over-deduction on the personal return. The tax-deferred elections were filed on time and the supporting valuations documented.
The result — A restaurant with heavy seasonal turnover, Barrie, Ontario
The reorganisation completed without triggering tax, and the new structure saves approximately $73,000 a year while removing the exposure the old one carried.
Case Study 6 · Cash and remittance control
$114,000 Of Working Capital Freed From The Tax Cycle — Mixed-Crew Construction Firm, Regina
Client: A construction firm with union and non-union crews · Where: Regina, Saskatchewan · Engagement: 3 weeks, fixed fee
Working capital freed$114,000
On-time remittancesEvery period since
Forecast horizon13 weeks
The situation — A construction firm with union and non-union crews, Regina, Saskatchewan
A construction firm with union and non-union crews in Regina, Saskatchewan was profitable on paper and short of cash every month. Remittances still going out monthly after the business had moved to the accelerated threshold explained most of the gap.
What we did for A construction firm with union and non-union crews, Regina, Saskatchewan
We filed the outstanding slips and summary and requested relief on the per-slip penalty with the reasons documented in writing. We also built a thirteen-week cash view so tax payments stopped competing with payroll for the same dollars.
The result — A construction firm with union and non-union crews, Regina, Saskatchewan
$114,000 was released back into working capital. Remittances have been on time every period since, and the forecast shows the tax outflow before it lands.
Reviewed by Udit Gupta, Founder and Tax Accountant for the 2025 tax year. These case studies are illustrative worked examples composed from the CRA rules that apply to this type of work, not specific client files; figures are representative and outcomes depend on your own facts.
