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An in-house bookkeeper on a $40,000 salary in Ontario costs you $43,084.55 a year once employer CPP and EI are added, or about $3,590 a month before vacation pay and benefits. Outsourced bookkeeping is cheaper when the work needs fewer hours than that money would buy, and dearer when it needs more.
What does in-house bookkeeping really cost?
Start with what you can price. A bookkeeper on payroll is an employee, so you match their CPP and pay EI at 1.4 times theirs. On $40,000 in Ontario the payroll remittance calculator shows $2,171.75 of CPP and $912.80 of EI on your side, using 2026 rates.
Then the parts no calculator can fill in. Vacation pay, sick days, benefits if you offer them, a computer, software and the time you spend supervising. Someone has to cover the desk during holidays, too. We can’t put figures on those, and neither can a generic guide.
How do you price outsourced bookkeeping fairly?
We couldn’t confirm what bookkeepers charge from any official source, so we won’t quote a range. Collect two or three written quotes and turn each into a yearly figure. A flat monthly fee times twelve is easy. An hourly quote needs an estimate of your monthly hours.
Here’s a way to see the break-even without knowing anyone’s rates. The table uses made-up hourly rates purely for illustration. It shows how many hours the in-house cost of $43,084.55 would buy at each one.
| Illustrative hourly rate | Hours a year | Hours a week | Hours a month |
|---|---|---|---|
| $40 | 1,077 | 20.7 | 89.8 |
| $60 | 718 | 13.8 | 59.8 |
| $80 | 539 | 10.4 | 44.9 |
Read it like this. If your books take fewer than 14 hours a week and the outside rate is $60, outsourcing costs less than the employee. If they take 25 hours a week, the hire wins on price. Your own numbers will differ, so swap in the real quotes.
Which option costs less for a small business?
For most very small businesses, outsourcing, because the work doesn’t fill a job. A shop with 30 invoices a month and one bank account might need a few hours of attention. Paying a full salary for that would be strange.
The balance moves as you grow. Daily invoices, many suppliers, payroll for several people and constant questions from the owner all push the hours up. Somewhere around a part-time role, the in-house cost starts to look fair, and you get a person who knows your customers by name.
A middle route exists too. Hire part-time, or keep a bookkeeper on payroll and send only the year end to an outside accountant. Neither changes the maths above, and neither is a magic fix, because what shifts is only the number of hours you’re paying for and who does the rest of the work when the busy weeks arrive, which is usually you.
What do you forget when comparing costs?
Your own time, mostly.
If you do the books after supper, it feels free, but each hour is one you couldn’t spend selling. The profit margin calculator can show what an hour of billable work brings in, which gives you something to weigh against a bookkeeping fee.
Then there’s the cost of mistakes. Late payroll remittances draw CRA penalties from 3% to 10% of the amount, depending on how late; the CRA’s employers’ guide gives the scale. A missed GST/HST filing means trouble of its own. A cheaper option that misses deadlines isn’t cheaper. And whichever way you go, you still have to keep records for six years from the end of the last tax year they relate to.
Also check what each quote leaves out. A flat fee might exclude payroll, catch-up work on old books or answers to CRA letters. Ask that up front.
Does the tax treatment change the answer?
Probably not by much, and an accountant can tell you for your own structure. Incorporated owners can look at the corporate tax calculator for the rate on business income by province. Sole proprietors can try the self-employed tax calculator, which works from net business income, so run it after you’ve subtracted what you spend on bookkeeping.
What would a real small business do?
Consider Ravi, who runs a four-person HVAC company in Brampton. His books take about eight hours a week in busy months and three in quiet ones. That averages five or six, well under the 14-hour mark, so a part-time outside bookkeeper beats a salaried hire by a wide margin. If he doubles the crew and the paperwork follows, the answer could flip, so he plans to redo the sum each January with real hours instead of gut feeling.
What is a sensible way to decide?
Track your real bookkeeping hours for two months, including the time spent hunting for receipts. Get two written outside quotes for that workload. Then compare the yearly totals with the in-house figure above, adding vacation pay and benefits if you’d hire. If the outside option is clearly lower and the work gets done on time, you have your answer. If it’s close, pick the one that frees up your evenings, because that part has no price tag in a spreadsheet. A loonie saved on paper isn’t saved if you lose a weekend to it.
Where the numbers come from
Employer CPP and EI figures come from the calculators on this site, which use 2026 rates. The penalty range comes from the Canada Revenue Agency, and the 1.4 times EI rule is the one our payroll calculator applies. The six-year record rule is also a CRA rule. Hourly rates in the table are examples, not market data, and we found no official figure for bookkeeping fees. This site has no link with any government body or bookkeeping firm.
Frequently asked questions
Is outsourced bookkeeping cheaper than hiring?
Often for a small business, when the work is a few hours a week. Turn each quote into a yearly figure and compare it with the salary plus employer costs.
What does an employer pay on top of a bookkeeper's salary?
Employer CPP matching the employee's, EI at 1.4 times theirs, plus vacation pay and any benefits.
How much do bookkeepers charge?
We couldn't confirm typical fees from an official source. Ask for written quotes and compare what each covers.
What are the penalties for late payroll remittances?
The CRA lists 3% to 10% of the amount, depending on how late the payment is.
How long do I keep bookkeeping records?
Six years from the end of the last tax year they relate to, unless the CRA gives permission to destroy them sooner.
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