Bookkeeping Basics
Tara Cairns
March 4, 2026
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This past April, the Ontario government announced a minimum wage increase from $17.20 to $17.60 an hour effective October 1, 2025.
Minimum wage is often a contentious topic in our economic landscape. As the cost of living increases, some argue that increasing the wage improves the standard of living amongst minimum wage workers, while others may classify it as a source of inflation that ultimately leads to job loss. No matter which way you see it, we know that wage increases impact your business, so it’s important to be prepared while navigating these changes.
As minimum wage increases, so will your payroll expenses. An increased expense can have many implications on your business – this can often mean cutting resources from areas of the business to offset increased costs. An expense like minimum wage increase has such a large impact on your business as you’re not only incurring the cost of the increased wage to meet the new minimum, but if you have staff that works above this wage, an increase in their wages is also necessary to maintain wage differentials.
Cashflow can also be a major pain point that many SMEs may face as wages increase. This lost cash flow has to be recovered from somewhere – whether it be through price increases on your goods and/or services or trying to find efficiencies in other areas of your business.
Sourcing labour and how you structure your workforce is also greatly impacted by minimum wage increases. What can this look like? Cutting down your workforce or even utilizing automation where applicable – either way, neither option is an easy or straightforward process.
For SMEs, it’s important that preparation commence as early as possible. Payroll discrepancies can prove to be a major challenge, and in order to prevent these errors, preparing a few months ahead of time can really save your business from potential noncompliance.
If your business doesn’t utilize cloud-based applications for your bookkeeping already, they can also serve as a great way to make many processes more efficient. Wagepoint for example saves you time as it automatically calculates and processes payroll rates, overtime, and tax deductions. Introducing efficiencies in these processes opens up more time for you to focus on other areas of your business. If tools like QBO – QuickBooks Online – are currently being utilized by your business, it’s important to make all payroll related adjustments, especially as QBO allows you to access different reporting tools to analyze and predict wage costs. Platforms like Payworks can also prove to be very useful, allowing you to preview your payroll as many times as you’d like before processing.
A group of skilled bookkeepers – like our team at NVS Connect, can be an extremely useful resource and support for navigating these challenges. Bookkeepers can leverage their wide array of knowledge in the practice to help you update and optimize your cash flow projections to account for increase in spend on labour and provide insights on it to help your business maintain stability.
Whether you use cloud-based applications or not, bookkeepers can also help utilize them to the greatest potential. Bookkeepers can use tools like QBO, Wagepoint, and Payworks to figure out where it makes sense to reduce costs, how to manage your workforce, and overall reduce the risk of not complying with policies. Their expertise allows them to not only understand your numbers but also be able to prepare for legislative changes like a wage increase.
As the minimum wage increase is scheduled to take effect in October of this year, it’s crucial for your business’s success and long-term growth to stay on top of making any necessary updates in a timely manner. The right resources – whether that be different cloud-based applications or an experienced and knowledgeable bookkeeper, you can make sure that your business navigates these changes with ease.
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This article was written by the team at NVS Connect, bookkeeping professionals proudly serving Simcoe County, the GTA, and surrounding areas. The information provided is for general guidance and is intended for informational purposes only. For advice specific to your business, we encourage you to reach out to our experienced team.
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