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7 Reasons to Work with a PEO Service in Canada

Posted by Ray Gonder


Aug 16, 2017 9:00:00 AM

7 Reasons to Work with a PEO Service in Canada--.jpgExpanding your business into a new country is cause for excitement. However, it also means you have a lot of work to do. To comply with Canadian laws and manage a new location, there’s a lot of homework that must be done on your end. Thinking about how you’ll manage it all seems like a daunting task. But it doesn’t have to be.

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Working with a PEO service in Canada allows you to grow your business, while still focusing on the more important aspects of business. From payroll to HR, PEO services take care of the administrative tasks, letting you focus on your business and its success.

1. Efficiency in Payroll

Many businesses choose to outsource payroll to better allocate time. Managing payroll can be a seriously time-consuming task, especially when it’s added to an already busy schedule. PEO services in Canada can help you stay on top of your administrative tasks, while also ensuring your payroll is following federal and provincial laws. You can rest easy knowing your employees are taken care of and your business isn’t left at risk.

2. CRA Compliance

As mentioned above, it’s vitally important that your business complies with Canadian laws and regulations. The last thing you need is a lawsuit. Something as simple as failing to obtain an employee’s Social Insurance Number can get you a $100 fine for every number you don’t try to get. Navigating the world of these regulations can be extremely confusing. Limit the frustrations and work with a PEO service in Canada.

3. Hiring and Training

Recruiting employees is one thing, but training them is completely different. Each takes time and commitment, adding to your schedule and your responsibilities. With a PEO service in Canada, you can hand your HR responsibilities over, letting yourself focus on more important business functions. Employees will be trained and HR duties will be handled entirely from Canada.

4. Happier Employees

Studies show that happy employees are 12 percent more productive, creative, and willing to work collaboratively. Having efficient payroll services and easily accessible HR personnel all contribute to a positive working environment. Everyone wants to be paid on time and have their concerns heard. Ensure your employees are properly cared for by working with a PEO service in Canada. 

5. Get Moving

It’s no surprise that expanding a business to another country can take time. Sometimes it takes years! Bypass the slow timeline and work with a PEO service in Canada. As experts in the field, these companies can help you with every aspect of expanding your business. From recruiting new employees to setting up insurance and bank accounts, you can sit back and relax.

6. Saves Money

Hiring in-house professionals to handle HR and admin duties costs money. It’s often expensive and isn’t something all businesses are capable of handling. In fact, many businesses unknowingly lose money due to not properly filing taxes, or through the benefits they offer employees.

PEO services in Canada can eliminate some of the costs associated with these tasks. From the cost of hiring, employee benefits, and 401(k) plans, PEOs work to get your business the best deals possible.

7. Reduces Risks

One of the biggest benefits of working with a PEO service in Canada, is the elimination of risk. From underqualified staff, to new guidelines and regulations, there are many places where your business could fall into trouble, such as the stressful audits or lack of CRA compliance. By working with experts in the field, you can work stress-free, knowing the growth of your business is being handled in the most secure way possible.

What US Companies Need to Know about Paying Employees in Canada

Topics: Professional Employer Organization

5 Benefits of Working with Canadian Payroll Providers

Posted by Karen McMullen


Aug 14, 2017 9:00:00 AM

5 Benefits of Working with Canadian Payroll Providers.jpgOne of the most important aspects of any business is payroll. However, it can also be one of the most complicated and time consuming aspects of running a business. Employees need to be paid, and you need to comply with regulations and laws. But it seems like there aren’t enough hours in a day to get it all done.

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Working with Canadian payroll providers is one of the most efficient ways of handling payroll duties. Not sure how? Read on to see the top five benefits of working with Canadian payroll providers.

1. Expert Knowledge

Most business owners and payroll staff don’t have the time or resources to memorize the rapidly changing laws and regulations regarding employee classification, taxation deadlines, or government forms. Some smaller businesses don’t have the means to hire payroll staff at all. This leaves you in a tricky situation, trying to grow your business without the right resources.

Working with Canadian payroll providers ensures your business continues to run smoothly, without hiring a full-time payroll employee or learning all the regulations yourself. With an expert knowledge of HR and payroll, you can trust that your employees are taken care of, with experts handling employee benefits, training, retirement plans, and payroll services.

2. Avoid CRA Penalties

According to the IRS, 40 percent of small businesses pay an average penalty of $845 per year for late or incorrect filings and payments. And the findings are similar in Canada. There are so many deadlines, classifications, and deductions, knowing all of them seems impossible. This leaves your business at risk of losing money due to improperly filed taxes. Perhaps even worse, your business could find itself at risk of an audit.

Canadian payroll providers are there to protect you, ensuring you and your business aren’t left at risk of Canadian Revenue Agency (CRA) penalties.

3. Increase Security

Payroll management is intricate and sometimes risky business. Even with the most trusted staff, there’s always the risk of identity theft, embezzlement of company income, or tampering with files for personal gain. In fact, Forbes estimates that approximately 4 million fraudulent insurance accounts are opened every year using stolen personal information. The risk is high. On the other hand, leaving sensitive data on a company server can leave your business vulnerable to cyber-attacks or crashes. How safe is your server?

Working with Canadian payroll providers leaves your payroll services in trusted hands. With state-of-the-art systems for storing and protecting data, you can rest easy knowing your business and employee information is protected.

4. Refocuses Time

Your business has needs and it’s up to you to handle them. The last thing you want is time taken out of your day to handle both the simple and complicated aspects of payroll. There aren’t enough hours in a day to manage your business, while also managing payroll and HR duties.

There are many signs it’s time to outsource payroll, but finding yourself spending more than enough time on the task is often the biggest tell. Working with Canadian payroll providers keeps your employees paid, and your energy focused on more important business functions. With more time on your hands, growing your business and working towards your goals can become your focus.

5. Peace of Mind

Running a business is stressful. However, research has shown that carrying stress can have negative impacts on many aspects of your health, from your physical well-being to your love life. Working with too much stress can put both you and your business in a dangerous situation.

Give yourself a break and consider outsourcing payroll. Working with Canadian payroll providers ensures nothing with your business is left to chance, letting you relax and your business run with ease.

What US Companies Need to Know about Paying Employees in Canada

Topics: Payroll Processing

Is It Time for Business Expansion? 13 Questions to Ask

Posted by Corinne Camara


Aug 11, 2017 9:00:00 AM

Is It Time for Business Expansion 13 Questions to Ask.jpgHow do you know when it’s time for business expansion? Sometimes you can’t see the answer to the question right away. You want your business to grow without putting yourself in a high-risk situation. How can you deem whether it will fail or be a booming success?

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There are questions you can ask to help determine whether it’s time to expand or not. Keep reading to see 13 questions you should ask yourself if you’re really considering business expansion.

1. Where will you expand?

You need to determine where you plan on expanding your business. Expanding into a country with similar consumer needs and client base will help limit risks, as you know the market has a need for your product or service.

2. How will you handle finances?

Business expansion is impossible without the ability to handle finances and payroll. Outsourcing payroll has become an increasingly popular option, especially for small businesses or businesses that are expanding.

3. How is your business unique from competitors?

Consider if there are any competitors offering the same services or products as your business. What makes you different and why should a consumer choose you over the “other guys”?

4. Are there new laws or regulations you should be aware of?

Different countries have different laws. If you don’t comply with them, you can find yourself in a significant amount of legal troubles. Ensure you know the regulations of a country before you expand, and consider working with a PEO firm for further assurance.

5. How will you maintain relationships with your current clients?

Did you know 67 percent of customers would churn if they encounter a bad experience with a company? Have a clear plan in place for maintaining relationships with your current customers before expanding your business.

6. Do you have enough cash flow for expansion?

If things go south, do you have enough money saved to help with damage control? If things go well, do you have enough for further expansion?

7. Have you done your research on new markets?

Expanding into unfamiliar territory is high risk. Ensure you know the new market inside and out before committing to opening a new location in a new city or country.

8. How will you hire new employees?

Recruitment and HR is time consuming. Have you considered how you will handle this task? Outsourcing HR responsibilities is another great move for businesses that are new to a country.

9. Is there a significant downside or loss if you do not expand?

Is there an opportunity screaming your name? If your business doesn’t expand, will you be missing out on something great?

10. How will you manage the stress that comes with expansion?

Studies suggest that activities such as reading, yoga, and laughing can greatly reduce stress levels. Do you have a plan in place for managing the added stress of business expansion? Does that plan extend to all staff?

11. How will you maintain quality service?

It would be a mistake to compromise your businesses service or product quality for expansion. Will you be able to ensure that your product’s quality remains unscathed by business expansion?

12. Are you committed?

This might seem like a silly question, but it’s perhaps the most important. Expanding a business takes time, hard work, and commitment. Is this a business venture that you are 100 percent ready to embark on? If there’s even a hint of doubt, it might be time to reconsider.

13. How do you get started?

If you’ve answered all the questions and still think business expansion is the logical next step, it’s time to get things moving. Request a quote from The Payroll Edge and see how a PEO firm can make the transition faster, more cost effective, and risk-free.

What US Companies Need to Know about Paying Employees in Canada

Topics: Business Expansion

Why You Need to Work with a Canadian PEO

Posted by Karen McMullen


Aug 9, 2017 9:00:00 AM

Expanding your business into a Canada is an exciting venture. It means business is booming and you’re beginning to grow. However, there are some things you should consider as your business expands into the Great North. For instance, should you work with a Canadian PEO?

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It may not be something you’ve thought about, but working with a Canadian PEO can be the difference between successful expansion and a business nightmare. Keep reading to learn some of the reasons why you need to work with a Canadian PEO.

How Do They Help Your Business?

PEO services in Canada look out for businesses and help them simplify the expansion process. They offer all-inclusive support in many areas of business, such as HR, payroll and administration, recruitment and hiring, as well as training, benefits, and compensation. PEO firms are also responsible for ensuring your company is following Canadian laws and regulations, helping you avoid any legal or financial troubles while you find your way in new territory.

While each PEO firm offers different benefits, it’s important that you work with a PEO that offers your company the services you need. Remember, your PEO should share the same vision as you: business growth and success.

Reduce Risk

One of the most obvious reasons to work with a PEO is the reduced amount of risk. Canadian laws are confusing, and it’s imperative to stay on top of changing legislation. As your business grows, there will be a million other things you need to focus on. Learning each Canadian regulation won’t be at the top of your list.

A Canadian PEO acts as your Employer of Record (EOR), helping you decipher Canadian laws and regulations set by the Canadian Revenue Agency (CRA). From legal requirements, tax regulations, and employee classification, the right PEO will ensure you’re in compliance with such laws and give you legal peace of mind.

If these guidelines are ignored or done improperly, you and your business can face some serious repercussions. For instance, misclassifying employees as independent contractors can leave you with criminal penalties and even worse, prison time. This leaves you in a serious situation, but the good news is that it’s easy to avoid this scenario.

Cut Costs

The right PEO will help you meet your business goals while also finding ways for you to further limit costs. With a professional knowledge of Canadian tax regulations, a Canadian PEO knows how you can save on tax refunds and credits. Additionally, ensuring your company avoids costly mistakes will always save you money in the long run.

Save Time

Setting up your business in Canada takes time. There’s a lot to consider and it can seem overwhelming. Working with a PEO allows you to set up your business almost instantly. Your company won’t have to worry about how employees are being hired, trained, or paid, and you can focus on more important business duties. Knowing professionals are handling the job allows you have confidence in your business and its success.

HR Duties

While it may not seem like the most important aspect of business, working with a PEO firm will lift the burden of handling HR duties on your own. From payroll to hiring employees, working with a Canadian PEO will ensure that your business is taken care of from the ground up.

From the day your business expands into Canada, a PEO will handle the recruitment, hiring, and training of employees. Not to mention supervising vacation requests, handling terminations, and controlling sensitive employee issues or concerns. The right PEO will serve as your partner, allowing you to focus on the front line of business duties.

What US Companies Need to Know about Paying Employees in Canada

How Unintentional Payroll Errors Can Harm Your Business

Posted by Ray Gonder


Aug 7, 2017 9:00:00 AM

How Unintentional Payroll Errors Can Harm Your Business.jpgEveryone makes mistakes. However, when it comes to payroll, the world becomes a little less forgiving. In 2014 alone, U.S. businesses were fined roughly $5 billion in payroll tax penalties. That’s a lot of money considering most of these errors were completely unintentional.

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From jail time to costly penalties, your business is at risk any time payroll errors occur. So, what exactly are the risks that come with unintentional payroll errors? Where can a business go wrong? Keep reading to see some of the most common payroll errors and how they can harm your business.

Missing Deadlines

If you’ve ever wondered why payroll schedules are so important, this is your reason. Employers can suffer penalties ranging from 3 percent to 10 percent when they fail to remit deductions to the Canadian Revenue Agency (CRA) on time. For any business, this can be devastating.

By staying up to date with the CRA’s schedule, you can ensure that your business doesn't unintentionally submit late payments and lose money. Mark key dates on your calendar, like the 15th of each month, and set reminders so you don’t forget. If you find yourself regularly falling victim to these fees, it might be time to consider outsourcing payroll.

Improper Bookkeeping

One should never underestimate the importance of proper bookkeeping. Failure to maintain or provide adequate records puts your business at serious risk. The CRA has specific guidelines for how records should be maintained and can request that your books and records be updated if they are found inadequate. If a business fails to abide by such a request or does not provide the requested information and documents, the person may be prosecuted. Penalties are serious, ranging from fines, to imprisonment.

Now that you know the risks, you can begin to abide by the laws. Keep your bookkeeping and records maintained and in compliance with the CRA to eliminate any risks to both you, and your business.

Incorrect Worker Classification

While it may not seem like a big deal, misclassifying employees can leave you in serious trouble. It may be an unintentional error for some, but classifying a worker as an independent contractor saves a company from paying expenses such as overtime pay, employee benefits, and workers compensation insurance. For this reason, some employees find themselves misclassified for the company’s benefit. In fact, an estimated 3.4 million employees are misclassified as independent contractors.

The ramifications for an employer vary, depending on whether the misclassification is deemed unintentional, intentional, or even fraudulent. Lawsuits, audits, fines, and even jail time are all possibilities. Not to mention the loss of credibility and poor reputation you and your business will face. The best way to avoid the risks of misclassification is to prioritize compliance and seek out a company that can help. When it comes to payroll guidance, you can never be too safe.

Ignoring New Laws & Regulations

The world of taxes and payroll is always changing. Keeping up to date with new laws and regulations that affect payroll will ensure your business isn’t directly impacted by law changes. However, it’s a time-consuming process that many business owners find difficult. This can lead to issues when maintaining records and payroll gets put on the back burner.

Ignoring new laws and regulations puts you and your employees at risk. If your business faces a lawsuit or fines, your staff will pay the price, too. Limit the risk and have your payroll ducks in a row, before it affects your business.

What US Companies Need to Know about Paying Employees in Canada

Outsourcing Payroll in Canada? Here Are Some Things You Need to Know

Posted by Corinne Camara


Aug 4, 2017 9:00:00 AM

Outsourcing Payroll in Canada_Here Are Some Things You Need to Know.jpgIn many businesses, back-office activities such as payroll, can take up more time than one would expect. It’s not as easy as it seems, especially as a business grows and it’s needs expand. However, there is a solution you should consider: outsourcing payroll.

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Outsourcing payroll in Canada has many benefits, all that allow you to focus on more important aspects of your business. In many ways, it’s a simple solution that protects your business and helps you grow. If you’re considering outsourcing payroll, here are some things you should know.

Why Should You Outsource Payroll?

There are many reasons why should consider outsourcing payroll in Canada, and they all provide benefits for your business. With strict regulations in place by The Canadian Revenue agency (CRA), having an expert running your payroll is a tremendous asset that limits risks. Saving time, reducing costs, and bringing an expert to your payroll services are just some of the most obvious benefits. From paychecks to federal regulations, you can rest easy knowing all your vital back-end tasks are being taken care of by experts in the field.

Always on Time

Things get busy. It’s completely understandable that payroll not be at the forefront of your business to-do list. However, your employees rely on you for their paycheck. While it might not seem like the biggest concern, regulated payroll keeps your employees happy and your business afloat.

By outsourcing payroll in Canada, you have guaranteed on time payroll processing. No longer will you have to worry about staying on schedule and managing timesheets—it will all be taken care of efficiently and quickly.

Knowledge of Regulations

As mentioned before, the CRA has strict guidelines and regulations for almost every aspect of your business finances. If you don’t think it’s serious, consider that failing to file Record of Employment can get you up to six months in prison, a $2,000 fine, or both. The list of penalties and consequences is long and complex. Not complying with these can get you and your business into some hot water, and as your business grows, the last thing you want is a lawsuit.

Outsourcing payroll in Canada means a professional is ensuring that your business is complying with federal and provincial regulations. They are up to date with legislative changes regarding employment standards and payroll taxation, as well as year-end tax reports. From worker’s compensation to T4s, you will no longer have to worry that your business will be at risk of an audit.

Reduce Costs

To answer the biggest question on your mind, outsourcing payroll in Canada will save you money. In fact, organizations that manage payroll services in-house spend on average 18 percent more than organizations that outsourced these functions. Depending on the size of your business, managing payroll can take multiple employees. The larger the business, the more money to be saved by outsourcing these functions. From accurately tracking employee timesheets, to accurately filing for taxes, outsourcing payroll gives you the upper hand.

Increase Your Productivity

Outsourcing payroll in Canada is easy and effective. It takes some of work off your shoulders, and lets you refocus your energy on more pressing business matters. From expanding your business, building new leads, and improving customer relationships, the last thing on your mind should be payroll. Give yourself a break and your business a boost by letting professionals take care of the back end of your business. From day one, you will see nothing but amazing results.

What US Companies Need to Know about Paying Employees in Canada

Topics: Payroll

How Canadian Employer of Record Services Can Help Your Company

Posted by Stacey Duggan


Aug 2, 2017 9:00:00 AM

So, your company is growing at a rapid pace and you’re beginning to expand your business into Canada. Congratulations! That’s great news. Business growth is the goal for every company, however sometimes it happens faster than anticipated. Keeping up with new payroll regulations, expansion of HR duties, and Canadian regulations can be daunting and costly.

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But there is a solution that can help your business continue to grow while you focus on important tasks. It’s called an employer of record. These companies help you organize your HR and payroll administration duties, working completely on your behalf. Keep reading to see how Canadian employer of record services can help your company navigate through this newly found territory.

HR Support

While you focus on growing your business, sometimes HR duties become the last thing on your mind. Between recruiting, hiring, training, and terminating employees, it’s possible the task of managing it all has become too much. You need more time to focus on your business and its goals, and less time spent worrying about administrative duties.

With Canadian employer of record services, you’ll be able to hand off these administrative tasks confidently. All HR responsibilities will be handled, leaving you to sit back and manage the other aspects of your company with ease. This improved process will help your company expand into Canada, while you continue to take control of things back home.

Rules and Regulations

Staying on top of another countries rules and regulations adds a handful of duties and education to your plate. If managed incorrectly, you can be left in an expensive situation, facing multiple lawsuits and expensive fines. For example, submitting your payroll data to the CRA (Canadian Revenue Agency) late, even by three days, can leave you responsible for late filing fees. And that’s one of the smaller legal responsibilities. It’s a mistake you don’t want to make, especially as your company tries to grow.

Avoid the hassle and stay on top of things by working with Canadian employer of record services. Keeping track of all important dates, legal regulations, and taxation policies are just some of the many benefits these professionals provide. Expanding into Canada can seem intimidating, but working with an EOR helps you streamline the process and avoid mistakes.

Speeds Up the Process

Establishing your business on new soil can be a slow process. For some companies, it can take years to get their company functioning in Canada. Without knowledge of the country and its regulations, getting things moving is inevitably slow.

Avoid the painstakingly slow process and consider Canadian employer of record services. These professionals take care of all the tasks involved with breaking ground in Canada, like employee recruitment, payroll, and staying up to date with regulations. This saves you time, allowing you to focus on the other aspects of growing your business.

Saves Your Money

If done correctly, expanding your business into Canada can be an extremely smart move. In fact, in 2014 Canadians spent $22.9 billion dollars in ecommerce sales, and the numbers are expected to rise. With audiences very similar to the US, Canadian consumers can become the perfect target audience for many American businesses.

However, setting up a business in Canada can be incredibly expensive. The cost of hiring and training employees alone costs thousands of dollars. Not to mention any fees associated with errors in payroll or CRA mishaps. It seems like there’s a lot of room for costly errors.

Canadian employer of record services help you save money as you expand your company into Canada. From keeping up with regulations, training employees, and handling all payroll functions, working with a EOR might be the smartest investment you can make.

What US Companies Need to Know about Paying Employees in Canada

Topics: Canadian Employer of Record

What You Need to Know About Vacation Policies for Canada

Posted by Stacey Duggan


Jul 31, 2017 9:00:00 AM

What You Need to Know About Vacation Policies for Canada--.jpgWhether it’s to another country, into the Canadian wilderness, or just a relaxing staycation at home, Canadians love their vacation time. So much so, that many Canadians take this into account when negotiating their employment contracts.

In fact, Canada was the only country that chose vacation time as their preferred benefits. 20 percent of Canadians said that they would prefer an additional week of vacation time, compared to a $500 salary increase. Clearly Canadians know their priorities!

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With vacation time comes vacation policies for Canada. Companies and employees alike need to be aware of what the rules and regulations surrounding Canadian vacation policies to properly account for accurate payroll processing. There are many myths surrounding vacation policies for Canada and it’s important to know truth from fiction. If you don’t already, here’s four things you’ll need to know about vacation policies for Canada.

They’re Different in Every Province

That’s right, if you conduct business in only one province, you’ll only have to know your province’s vacation policies. However, if you conduct business and hire employees in multiple provinces, you’ll need to be aware of the differences to ensure proper payroll accuracy and ensure compliance.

If you have trouble keeping track of provincial regulations, it may be a smart investment for your company to enlist the support of a back office solutions provider, who can not only keep you informed on provincial differences, but handle all your payroll needs to avoid any mistakes or errors. Don’t leave your payroll to chance, trust the experts.

Vacation Policies for Canada—How it Works

Unlike Canada’s neighbours south of the border, it is mandatory for Canadian employers to offer vacation time to employees after one year of employment. Employees are entitled to two weeks of vacation time, except in Saskatchewan where the minimum is three weeks, and Quebec where the minimum is 12 days (one for every month of the year).

You may have noticed on your paycheque that every payday four percent, or six percent in Saskatchewan, is deducted for vacation pay. What does this mean? While vacation time may seem like free money, it’s actually an accumulation of a percentage of your paycheque. So, each pay period, four or six percent of your pay is withheld from you in order to pay for your time off.

For temporary employees, the accumulation of their vacation pay is given to them once they complete their employment with the individual business.

Can an Employer Reject a Request for Vacation Time?    

When it comes down to it, yes, an employer does have the right to reject requests for vacation time. Vacation policies for Canada are not meant to harm businesses, and if your employer believes that the time you have requested may negatively impact their business, they have the right to reject your request.

While they have the right, most employers do not exercise this. It diminishes employee morale, and ultimately can leave employees feeling very bitter towards their employers. While employers can reject vacation time requests, many do not in order to keep their employees happy and productive.

The Use It or Lose It Rule

Many people have heard of the use it or lose it rule, but what does it mean? The use it or lose it rule only applies to extra vacation time granted to employees by their employers. For the minimum two weeks’ vacation, employers cannot implement a use it or lose it policy.

Employees must take two full weeks off within 10 months of the end of the vacation period. You should never be fearful that you’re going to lose your vacation time unless you receive over two week’s holiday.

12 Things an American Company Looking to Hire a Worker in Canada Needs to Know

Topics: human resources

How PEO Services in Canada Can Make Your Business More Efficient

Posted by Shannon Dowdall


Jul 28, 2017 9:00:00 AM

How PEO Services in Canada Can Make Your Business More Efficient--.jpgProfessional Employer Organizations (PEOs) provide HR services to small businesses, covering everything from payroll, benefits, and taxes to assisting with provincial and federal laws and regulations. Employing a PEO is an effective means to navigate the tricky Canadian business market, but is it worth it? How can PEO services in Canada make your business more efficient?

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Why Should I Use a PEO?

PEO Services in Canada handle all your HR needs, including payroll and administration, benefits, compensation, provincial and federal compliance disputes, and even worker training. They look out for small businesses by tailoring their approach to a specific organization’s needs, resulting in plans that can offer savings and value for both the company and their employees. Moreover, PEOs offer peace of mind by taking care of HR-related administrative duties that may often overwhelm small businesses.

The job of a PEO is to deliver all-inclusive support that is effective and sustainable. A good PEO will enable businesses to optimize their operational scope and ensure that the company is focused on its vision and growth.

What Can a PEO Do for Me?

So, you’ve decided that your company should use a PEO in Canada… now what? Every PEO firm has their own pros and cons, you have to make sure that the PEO you choose provides your company with the best value. From basic payroll services to more comprehensive HR management, a PEO can help your company operate at its best in the Canadian marketplace.

Payroll and the CRA

A PEO can help your business manage employees in accordance with Canadian laws and regulations. They can help navigate labour codes, register with the Canada Revenue Agency (CRA), and adhere to Canadian compliance responsibilities. A PEO can handle these challenging, complex, and time-consuming endeavours so you don’t have to!

More than 33% of small businesses get fined every year for making payroll mistakes. PEOs take the worry out of government compliance by doing the paperwork for you. The cost of getting things wrong is high, but PEOs are experts on employment-related compliance and will make sure it’s done right.

Cut Costs and Save Big

PEOs work to save small businesses money by lowering costs and better managing risks for their clients. PEOs are experts, they reduce the danger involved in having the same tasks done in-house by potentially underqualified staff. Moreover, PEOs look out for new technologies, IT systems, and changes in government regulations that will affect your business, ensuring that they can support your company to the best of their ability.

There are never enough business hours in the day, but a PEO can help get some of that time back by taking on a lot of the employment-related administrative work. By reducing the need for internal HR professionals, PEOs save small businesses time and manpower, allowing them to develop and focus internal resources more efficiently.

Additionally, PEOs make open communication with employees a breeze! This lets your employees know what benefits they are getting and how your company is taking care of them. This kind of open appreciation sends a valuable message to your workforce, which in turn can increase productivity and reduce employee turnover.

Focus on Your Business

At the end of the day, PEOs, such as the Payroll Edge, make managing a business in Canada that much easier. By leaving the daunting task of understanding employment compliance, payroll management, and HR administration to professionals, you can better focus on improving your core business. PEO Services in Canada can give small businesses peace of mind and allow them to be more efficient, improve productivity, and most importantly: grow.

What Are You Leaving to Chance by Handling Payroll on Your Own

Topics: Professional Employer Organization

How Payroll Taxes Are Calculated

Posted by Corinne Camara


Jul 26, 2017 9:00:00 AM

How Payroll Taxes Are Calculated--.jpgPayroll is an essential business process that has strict provisions and guidelines. Managing payroll can be quite stressful on its own, but when combined with other HR-related administrative tasks, it becomes even more precarious to undertake payroll in-house.

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By outsourcing payroll duties to a payroll service provider, companies gain the ability to leverage HR, legal, and compliance expertise for any complex workforce challenge that may arise.

Payroll Is Complicated, So Outsource It!

Payroll operates somewhat differently in Canada. Here, the Canada Revenue Agency (CRA) exists to protect the rights of employees and to make sure that businesses comply with federal and provincial regulations.

Although the various types of payroll taxes depend on the province or territory the business operates in, employers are required to report and remit:

  • Income tax;
  • Canada Pension Plan (CPP) contributions; and
  • Employed Insurance (EI) premiums.

Failure to comply with Canadian payroll requirements can result in fines of $1,000 to $25,000, imprisonment for up to 12 months, or a combination of both. The CRA outlines the details for certain offenses and omissions, from failing to make the appropriate payroll deductions to filing information forms late.

Businesses have at their disposal the CRA’s Payroll Deductions Online Calculator (PDOC) or any other online payroll calculator to help determine the number of deductions required for your employees.

Deducting Income Tax

Employers are responsible for deducting income tax from the remuneration or other income they pay. The amount withheld depends on the provincial or territorial tax rates where the employee reports to work.

The easiest way to calculate how much you, as the employer owns, is to use the CRA’s PDOC. If this is still overwhelming, any payroll service would be happy to help your business accurately calculate your required payroll tax deductions.

Deducting Canada Pension Plan (CPP) Contributions

CPP deductions are a bit more complicated in that the employee must meet the following conditions:

  • is in pensionable employment during the year; and
  • is not considered to be disabled under the CPP or the Quebec Pension Plan (QPP); and
  • is 18 to 70 years old even if the employee is receiving a CPP or QPP retirement pension.

Additionally, these deductions are particularly complicated in terms of maximum pensionable earnings and annual basic exemption. Moreover, if the business operates in Quebec, a QPP is deducted instead of CPP and this must be taken into account if an employee is moved from Quebec to another province or territory.

This seems stressful, however, as with other payroll taxes, the CRA’s PDOC or a payroll service can help businesses make sure the correct amounts are paid out.

Deducting Employment Insurance (EI) Premiums

Businesses must deduct EI premiums from an employee's insurable earnings if that employee is in insurable employment during the year. In addition, employers must pay 1.4 times the amount of the employee's premiums.

It is worth noting that EI provisions cover most employment in Canada and bear no age limit restriction. Furthermore, when employee EI deductions reach the yearly maximum amount, employers stop deducting them. On top of that, some benefits and payments you give to employees can be exempt from EI altogether.

The CRA sets annual EI premium rates and maximums which determine the EI deductions for a given year. In addition, there is a separate chart for Quebec, which has a different rate structure.

Overwhelmed yet? Again, the CRA’s PDOC or a payroll service can help streamline this payroll taxation process.

Outsourcing Payroll Can Give You Peace of Mind

Managing payroll and navigating Canadian taxes on your own can be extremely stressful and time-consuming. To alleviate this burden, many businesses choose to outsource their payroll to a payroll service provider.

Ultimately, payroll services give businesses peace of mind and exist to ensure that your workforce is always paid promptly, accurately, and in full compliance with all federal and provincial regulations.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Processing

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