Home Blog

Blog

The Wrong Ways to Expand into Canada

Posted by Corinne Camara

|

Apr 24, 2019 9:00:00 AM

The Wrong Ways to Expand into CanadaLike most business owners, you see growth as a measure of success. Expanding into international markets is certainly an indication of growth.

Download "What Are You Leaving to Chance By Handling Payroll on Your Own" Guide

When you begin moving into other markets, though, you’ll need to take steps to secure your success. This is very true when you plan to expand into Canada. There are right ways and wrong ways to go about managing expansion into the Great White North.

Being aware of some of the wrong ways can help you avoid the missteps others have made before you. Learn about these mistakes as you plan your expansion, and you’ll be better prepared.

Don’t Plan to Expand into Canada Rapidly

Perhaps the best example of this misstep comes from US retailer Target. In 2011, Target bought up a number of locations in Canada and opened 124 stores in the span of less than a year in 2013.

The chain ultimately opened 133 stores before closing up shop in 2015. While there were numerous mistakes made in the Target saga, one of the key factors was rapid expansion. If Target had opened a few stores first, it could have focused on working out issues like supply chain management on a smaller scale.

Many companies have used the slow expansion model to conquer the Canadian landscape, and it generally works much better. If your brand isn’t as well-recognized as Target, take heed. Even popular brands can fail if they take on too much too soon.

Study the Culture

There are many cases of businesses experiencing culture shock when they expand to an international market. You merely need to look at the example of Mattel marketing Barbie in China. Chinese culture emphasizes educational toys and skill-building, so Barbie didn’t fare well.

In some cases, the differences in culture are much more subtle. This is certainly the case in Canada. Canadians share many cultural similarities with their American cousins, but that doesn’t mean their culture is the same.

Take some time to study Canadian culture before you expand into Canada. Whether you’re looking to connect with your employees or market to consumers, understanding cultural nuances will go a long way to ensuring your success.

You Ignored Market Trends

British supermarket Tesco tried to expand into the US in 2007, in what was a case of poor timing. Tesco’s messaging about fresh food appealed to US consumers, but the economy was on the brink of the worst recession since the 1930s.

It’s not just the economic indicators you’ll want to pay attention to when you decide to expand. You’ll also want to take a look at the competition. If your market is oversaturated, you’ll have an uphill battle to convince clients to switch to your business. If there’s no competition, are you looking at an underserved market or a non-existent one?

Doing your market research is imperative when you want to expand into Canada or any other market. Don’t forget to look at historical trends as well. If the market is shrinking, you want to know before you head across the border.

You Got Caught up in Red Tape

You hired a Canadian employee, but you forgot to file the paperwork. When it came time to let someone go, you fired them on the spot and didn’t pay termination pay. You aren’t sure about the rules regarding tax withholdings, overtime pay, or vacation time.

Legislation can protect you, your business, and your employees. It can also lead to noncompliance as you expand into Canada. Make sure you’re aware of the employment regulations and how they affect your business.

You can avoid all these mistakes and more when you work with an experienced PEO. If you need a helping hand as you expand into Canada, get in touch with an expert team today.

What US Companies Need to Know about Paying Employees in Canada

Topics: Business Expansion

5 US Tax Forms International Companies Employing Workers in the US Need to Be Familiar With

Posted by Ray Gonder

|

Apr 22, 2019 9:00:00 AM

5_US_Tax_Forms_International_Companies_Employing_Workers_in_the_US_Need_to_Be_Familiar_WithIf you’ve just expanded your business to the United States, you’ve taken a huge step toward growth. Now you want to ensure the success of your expansion. One of the best things you can do is secure the right people.

Download "7 Challenges Companies Face When Expanding into the US" eBook

Another key is making sure you’re following the law, including tax regulations and employment legislation. Whenever you hire a new worker, you’ll want to be sure you’re familiar with the forms you’re legally required to submit.

You’ll need to submit some US tax forms when you first hire an employee. Some will need to be issued on an annual basis, while others will need to be updated from time to time. Here are five forms you should be familiar with if you plan to employ even one worker in the US.

1. Form W-4 Allows You to Withhold Taxes

The first form you’ll have any employee fill out is a W-4. This form authorizes you to collect and withhold income tax from the employee’s wages.

If an employee doesn’t fill it out, you can’t pay them. It’s in their best interests to complete this form and allow you to file it as soon as possible.

2. Form I-9 Verifies Employment Eligibility

Everyone you hire for your business operations in the US should be legally allowed to work. That’s why they must fill out Form I-9, Verification of Eligibility for Employment. If an employee refuses to fill out and file an I-9, they may not be eligible to work.

Hiring workers who aren’t eligible to work in the US can have repercussions on your business. You may be penalized by the IRS or even subject to visits from immigration officers. It can also disrupt tax withholding and payroll, as employees who are not eligible for employment may also not fill out Form W-4 discussed above.

3. Form W-2 Must Be Filed for Income Tax

As an employer, you’ll also need to fill out and remit Form W-2 each tax year. If you pay any employee more than $600 US in a year, you must complete this form and file it with the IRS.

A copy of your filing should also be sent to the employee for their records. Legally, you must send out W-2s before the end of January each year for the previous year. If you know this is going to be a challenge for your business, you may want to outsource payroll.

4. Form 1099 Is for Contractors

There may be times when you hire workers who don’t quite fit the bill as “employees.” You may hire them for a special project or for consulting work. These people are contractors, and you’ll need to fill out Form 1099.

Contractors engage with you on a business-to-business case, so you don’t need to withhold taxes from them. They don’t need to fill out Form W-4 to authorize you to withhold taxes since they look after their own taxes. Instead of a Form W-2, you’ll provide them with Form 1099 at the end of each tax year.

Make sure you’re classifying your employees and contractors correctly. Employee misclassification can result in penalties for your business.

5. Form SS-5 Must Be Filled out If an Employee Doesn’t Have a Social Security Number

If you hire a new employee, but they don’t yet have a social security number, then they need to apply for one. Form SS-5 is the form they’ll need to fill out.

You’ll need to be sure the employee obtains a Social Security number before you can proceed with the rest of the forms.

These are only some of the forms you’ll need to look after if you employ workers in the US. If you're having trouble keeping up with all the paperwork, you might want to think about outsourcing to a professional employer organization (PEO).

blog-cta-us-payroll-services-2

Topics: Payroll

4 Tips to Compare US Payroll Service Providers

Posted by Karen McMullen

|

Apr 17, 2019 9:00:00 AM

4 Tips to Compare US Payroll Service ProvidersWhen you’re expanding to the US market, there are many challenges you’ll face. One of the ongoing issues for global companies is employing American workers. From hiring to termination, there are many tasks to be managed, and you’ll need to be familiar with the ins and outs of American employment regulations.

Request a quote for US payroll services today!

One way to make these tasks easier is to work with US payroll service providers or a professional employer organization (PEO). The experts on staff can help you manage payroll, monitor compliance, and more.

The question is, how can you be sure you’re hiring the right company? During the decision-making process, you’ll need to compare and contrast different providers. Use these tips, and selecting the right provider will be easier.

1. Ask about Support from US Payroll Service Providers

The first thing you should do is ask about the kind of support you’ll receive with your payroll service. Will you have a dedicated agent or team of people working on your account? Can you contact them? If there’s a significant time zone difference, and how will they manage this?

You should also ask about support for different systems and programs they use. Will you be required to use their programs to log information?

Support is a key factor in finding the right payroll service provider.

2. Determine Your Needs

When you’re comparing US payroll service providers, it’s easy to get caught up with extras you don’t necessarily need. It can also be tempting to choose a bare-bones plan that doesn’t meet all your needs because it fits your budget.

Always keep your needs in mind. If you’re going to need help with more than just US payroll, it might be a good idea to work with a professional employer organization that offers support for human resources, compliance, legal, and more.

3. Ask How They’ll Grow with You

As a business leader, you need to be forward-thinking, so you should take steps to future-proof your relationship with your payroll provider.

You plan to grow your US operations, so ask how the payroll provider will scale with you. Can they keep conduct payroll for 100 or 10,000 employees? If not, it might be time to consider someone else.

4. Think Beyond Payroll

Payroll is certainly one of the more time-intensive tasks related to the employer-employee relationship in the US. It’s far from the only aspect you need to consider.

As you compare US payroll service providers, you should consider whether you need services that go beyond payroll. Would it be helpful to have assistance with HR compliance? What about delivering training and onboarding?

You may want to consider PEOs over US payroll providers alone. A PEO can help you manage payroll and so much more, which could be key to your success in the US market.

blog-cta-us-payroll-services

Topics: Payroll

5 Common Mistakes International Companies Make in the US Payroll Process

Posted by Anna Mastrandrea

|

Apr 15, 2019 9:00:00 AM

5_Common_Mistakes_International_Companies_Make_in_the_US_Payroll_ProcessPayroll becomes more complex when you’re dealing with the payroll rules of another country. International companies may find they struggle with the US payroll process even more than they do with the process at home.

Download "7 Challenges Companies Face When Expanding into the US" eBook

If you’re planning to expand to the US, here are a few of the most common mistakes to watch out for when you complete payroll.

1. Keeping on Top of Deadlines Is a Challenge in the US Payroll Process

Missed deadlines are probably the most common mistakes in the US payroll process for any business, international or otherwise.

The IRS sets out a schedule of remittances, which is usually based on how often you complete payroll. If you pay your employees every two weeks, you’ll need to make sure you’re remitting the tax withholdings to the IRS within so many days of completion.

There are other deadlines as well, such as the deadline for sending in information for new hires and the deadline for sending out certain income tax forms.

2. Worker Misclassification Is Common

Worker misclassification has become an important topic in the last ten years or so. The IRS now offers guidelines on how to classify your workers, and they’ll also review cases to determine whether misclassification took place. Some states have introduced their own penalties for misclassifying workers.

Accidental worker misclassification is easier and more common than you might realize. You may think you’ve hired a contractor, but if you have control over all aspects of the job, it’s likely you’ve hired an employee.

Your responsibilities as an employer are different when you work with a contractor. This can affect the US payroll process, so you’ll want to be sure you classify your people correctly.

3. Poor Record-Keeping

Many countries set standards for record-keeping, and they’ll also lay out regulations regarding how long you need to keep those records for. The rules surrounding records in the US payroll process are different from those you encounter at home, so you’ll want to read the fine print.

Poor record-keeping is common in the US, particularly with regard to data entry. You may want to check you’re not only keeping the right records but keeping accurate records as well.

Finally, be sure to verify both state and federal law about how long you need to keep records on hand. Different types of payroll records need to be kept for different amounts of time. The rules may even change depending on the job or the industry you’re in.

4. Paying the Wrong Tax Rates

The US has a graded system of taxes, which means the more an employee earns, the more they pay in tax. These tax brackets are always changing, so you need to be sure you’re using the right taxation rate. If you don’t, you or the employee could end up owing the IRS at the end of the year.

There are other taxes you’ll need to withhold as well, including withholding for Social Security and Medicare.

5. Miscalculating Overtime

Another common error for international businesses is paying overtime incorrectly. Be sure to check the rate, as well as whether there are any exemptions.

The US payroll process can be challenging, which is why it’s never a bad idea to get a helping hand. Get in touch with a professional employer organization (PEO) and make your US payroll easier than ever.

7-challenges-companies-face-when-expanding-into-the-us

Topics: Payroll

International Companies FAQ: Who Pays Payroll Taxes in the US?

Posted by Corinne Camara

|

Apr 10, 2019 9:00:00 AM

international-companies-faq-who-pays-payroll-taxes-in-the-usAs you expand your business operations across international borders, you have to familiarize yourself with new regulations. Employment law is one major area of concern. Health and safety might be another. Most international companies are also concerned with business structure and tax programs.

Download "7 Challenges Companies Face When Expanding into the US" eBook

Another worry you likely have is US payroll. Most international companies deal with payroll, and most people have questions about how to handle tasks like calculating overtime and paying payroll taxes.

You may even ask, “Who pays payroll taxes in the US?” The answer is a bit more complicated than you might expect.

Who Pays Payroll Taxes in the US?

Several entities may be called on to pay payroll taxes in the US. The most likely scenario is that you as the employer will need to handle payroll taxes for your employees.

As the employer, you’re in charge of paying your employees. You know they’ll need to pay a certain portion of their income to the IRS at the end of the year. If they don’t, you could end up on the hook for their missing payments.

Employers are thus mandated to hold back a portion of an employee’s paycheck and submit that money to the IRS. This is a form of “safe keeping.” Individuals are less likely to save on their own, so this makes it easier for your employees to know they won’t owe the IRS large lump-sum payments.

It also means the IRS won’t turn to your company to find the money your employees aren’t paying them.

The IRS requires employers to remit their payroll taxes on a regular basis.

Contractors Pay Payroll Taxes in the US

There’s another group that comes to mind when you ask, “Who pays payroll taxes in the US?” Contractors are responsible for their own payroll taxes.

Independent contractors, or 1099 employees as they’re sometimes known, act as independent businesses. They’re more like partners than employees. You might hire them to deliver certain services or to produce a product.

Since they’re operating as their own business entities, you’re not responsible for collecting and paying payroll tax for them. These self-employed entrepreneurs will be responsible for remitting their own taxes.

You want to be sure you’re filing the proper paperwork on 1099 contractors. Use the IRS’s assessment to determine whether someone is a contractor or an employee to avoid misclassification. Then have the contractor sign the right forms to release you from withholding obligations.

A PEO Handles Payroll Tax on Your Behalf

There’s another type of entity that can pay payroll taxes in the US. That’s the professional employer organization, or PEO.

Many international companies hire PEOs to help them conduct payroll activities in the US. Generally, the international company pays a fee to the PEO that helps them cover salaries, benefits, and other costs associated with employees.

The PEO would be responsible for paying payroll taxes. Since they’re handling your payroll, they’ll calculate not only what employees should be paid but also what needs to be held back and remitted to the IRS. Although you’re ultimately paying the tax, the PEO handles the calculation, paperwork, and remittance.

So, who pays payroll tax in the US? Several different entities may be responsible. If you need a hand with your payroll, talk to a PEO and discover how they can help.

7-challenges-companies-face-when-expanding-into-the-us

Topics: Payroll

US Payroll Considerations to Keep in Mind before Expanding

Posted by Shannon Dowdall

|

Apr 8, 2019 9:00:00 AM

US Payroll Considerations to Keep in Mind before ExpandingIf you’re planning to expand your business to the United States, you have plenty to learn about your new market. Some of it will be cultural, while other challenges will appear in logistics, supply chain management, and employment.

Request a quote for US payroll services today!

There will also be rules and regulations you have to familiarize yourself with. Some of those will be associated with US payroll. If you plan to hire and pay American workers, you’ll want to keep these considerations in mind.

US Payroll May Have to Be Conducted at Certain Intervals

There is no federal regulation dictating when you have to pay your employees in the US. If you want to pay them once a month or once a year, that’s absolutely legal according to federal law.

Individual states may have different rules on the matter, so you’ll want to check the legal fine print wherever you choose to set up shop. If you’ll be operating in two or more states, keep in mind that the regulations may differ.

The IRS Schedules Remittance Payments

Once you’ve established a schedule for conducting payroll, you’ll need to consult with the IRS to determine when your payroll remittances will be due.

The IRS collects federal income tax withholdings, which can range from around 10 to almost 40 percent of an employee’s wages. This is tied to how much they make.

The tax you withhold from your employees must be remitted to the IRS within a specified period. If you don’t submit on time, you’ll be subject to penalties for late payment. You’ll also need to get the proper paperwork submitted.

Tax Isn’t the Only Withholding

Income tax is the biggest portion of US payroll withholdings, but you will also have to hold back funds for programs like Social Security and Medicare. These withholdings are assessed as a percentage of wages.

As the employer, you’ll be required to supply a match for what you hold back from your employees. Keep in mind that portions of some employees’ salaries may be exempt if they make above a certain amount.

Misclassification Is an Easy Mistake

In recent years, the IRS and several states have become more concerned with employee misclassification. This situation usually arises when an employee is misclassified as a contractor.

You may know that, in US payroll, you don’t need to hold back income tax or payments to social programs like Medicare from 1099 contractors. If an employee has been misclassified, however, you may need to pay.

It’s a good idea to monitor worker classification to ensure compliance.

Minimum Wages and Overtime

Other aspects of US payroll you’ll want to keep in mind are regulations about minimum wages and overtime. The US federal minimum wage is $7.25 per hour.

Individual states are allowed to set minimums higher than the federal wage. Some states do not set their own minimum. Most do, and some of them have wages that are substantially higher than others.

Overtime is another key concern for employers. Some employees are exempt from overtime requirements, but many are paid time and a half if they exceed full-time work hours. The number of hours that count as “full time” can vary by industry and even by position, so you’ll need to pay careful attention to this aspect of your payroll activities.

Help Is Close at Hand

Perhaps the most important matter to keep in mind when it comes to US payroll is that you don’t have to go it alone. A professional employer organization can help you navigate the waters and conduct payroll correctly and on time.

blog-cta-us-payroll-services

Topics: Payroll

5 FAQs about Expanding Your Business from Canada to the US

Posted by Stacey Jones

|

Apr 3, 2019 9:00:00 AM

5 FAQs about Expanding Your Business from Canada to the USExpanding a business from Canada to the US is often a logical move for Canadian entrepreneurs. For some people, it may even be a goal.

Download "7 Challenges Companies Face When Expanding into the US" eBook

The US is the nearest international market. It’s also one of the largest markets in the world, and Canada and the US share close economic ties and similar cultures.

As you consider expanding your business, though, you likely have some concerns. This is perfectly normal. Many people ask questions about this very subject. Here are a few of the most frequently asked questions and their answers.

1. How Do You Go about Expanding Your Business to the US?

The first step in crossing the border to the US is setting up as a subsidiary company. Generally speaking, you’ll have the choice of setting up the business as a limited liability company, a C corporation, or an S corporation. You may have a few other options, depending on the type of business you run.

The process for setting up the subsidiary can be quite lengthy, so it’s best to make this decision early on in the expansion process. You’ll want to consider taxation, as each type of business entity is taxed differently. The state you operate in may also affect taxation, as well as the shape your business takes.

You can expect to spend three or four months setting up the subsidiary.

2. Which State Should I Penetrate First?

This is a question each individual business owner will need to answer on their own. That said, the state of Delaware is a popular choice for foreign businesses for a few reasons.

Delaware has a relatively low rate of corporate tax, which makes it more attractive to foreign companies looking to gain a foothold in America. Another reason some businesses choose Delaware is that the state provides a relatively simple set of corporate structure and tax rules.

Setting up in a state like Delaware can help you begin doing business across the US. However, each state offers its own advantages and disadvantages.

You’ll want to consider access to your target market and access to infrastructure and resources. Even the job market can have an impact on your decision. If you’re looking for computer engineers and software designers, for example, you might find an abundance of them in California.

3. How Can You Reduce the Risks of Expanding to the US?

The US market is one of the world’s largest, but it also has a reputation for being difficult to penetrate.

Entering the American market can be a risky venture. It’s only natural that business owners like you would look for ways to mitigate those risks.

One option you have is to work with a professional employer organization (PEO) who has expertise in the US market. This partner can help you navigate the web of US laws, ensure compliance, and even fund payroll. They can also assist with some of the paperwork and other administrative functions.

4. How Can You Determine Whether Your Company Is Ready for the US Market?

Another common question is how to know when it’s right to consider expanding your business into the US. A little prep work can help you determine whether your business is ready to cross the border.

You should conduct thorough market research and competitive analysis. Also, take a look at your finances. Finally, make sure you discuss the decision with a business advisor.

5. Who Can You Ask for Help?

These are only some of the questions you may have as you consider expanding your business to the US. You probably have more. Who can you ask for help?

Business advisors, lawyers, and other corporate experts are good choices. A PEO can be an excellent resource as well.

7-challenges-companies-face-when-expanding-into-the-us

 

Topics: Business Expansion

Global Companies: 5 Challenges to Employing US Workers

Posted by Karen McMullen

|

Apr 1, 2019 9:00:00 AM

global-companies-5-challenges-to-employing-us-workersYour business is on the move, and your next target is the coveted American market. Like many global companies before you, you’re confident that you’re ready to face this challenge.

Download "7 Challenges Companies Face When Expanding into the US" eBook

Opening a US office or starting up operations in the US market means hiring American workers. The American labour market comes with unique challenges. Some of them are cultural, while others are legal.

Whether you’ve just hired your first American worker, or you already have a few US workers on your payroll, keep these five challenges in mind.

1. Global Companies Are at Risk of Misclassifying Employees

Can you explain how the IRS defines a contractor? If not, you’re not alone. Many business owners can’t, whether they’re running an international business or the US is their home base.

A lack of familiarity with American regulations causes some trouble for international employers, putting them at higher risk of misclassifying their workers. The IRS and several states have started cracking down on misclassification in recent years.

Take care that you review the definitions of both 1099 workers and other employees. This will help you avoid misclassification and the associated penalties.

2. State Law Can Vary from Federal Law

Learning the legal framework of any new country is a big task for companies looking to expand beyond its borders. This usually results in a lack of familiarity with an employer’s legal requirements.

In the United States, the situation can become increasingly complex. You’ve acquainted yourself with the federal legal framework, but laws change from state to state.

Minimum wage is one example. The federal government has set a minimum wage, but many states have enacted their own minimums. For each state you operate in, you’ll need to ensure you’re acting in compliance with the law.

States may also have their own laws around working hours for certain industries and even how you terminate employment with an employee. Before you hire an employee in any given state, you’ll want to check the fine print on these points.

3. Payroll Deductions and Remittances to the IRS Are Challenging

Another challenge for global companies is payroll deductions and the remittances they must send to the IRS when they employ American workers.

As the employer, you’ll be responsible for withholding income tax for your employees. How much you withhold from their paycheck depends on how much they earn.

You’ll also need to withhold for social programs like Medicare and Social Security. These withholdings have to be remitted to the IRS on a regular basis, usually in accordance with how often you conduct payroll.

As a result, administering payroll and sending payments to the IRS is a big challenge for most employers. Global companies can get the help they need by partnering with a professional employer organization (PEO) that offers payroll processing services.

4. The Job Market Can Pose a Challenge

Unemployment in the US has dipped over the last couple of years. There are fewer workers on the market as a result.

This situation can pose challenges for global companies who are searching for top talent. Your choice of state can also affect your hiring options. If you’re hiring in an area where the talent pool is relatively limited, you may have to pay more competitive wages.

Learning the job market is often something that happens after you’re actively seeking out new employees.

5. You May Need to Adjust to Employee Expectations

Cultural challenges can crop up in almost any aspect of the employer-employee relationship. Your employees may expect you to offer certain benefits or that they’ll receive certain amounts of time off.

They may also expect that you’ll communicate with them in particular ways.

Obviously, global companies have plenty to think about when it comes to hiring US workers. Getting a helping hand from a PEO can help you navigate the employee-employer relationship with ease.

blog-cta-us-payroll-services

Topics: Business Expansion

Expanding into Canada? How to Avoid the Problems Target Faced

Posted by Anna Mastrandrea

|

Mar 27, 2019 9:00:00 AM

Expanding into Canada How to Avoid the Problems Target FacedExpanding a business can be an exciting opportunity and a monumental challenge for any management team. Even American companies expanding into Canada can face an uphill battle when finding success beyond the 49th parallel.

Download "7 Signs It's Time to Outsource Payroll" Guide

One of the most infamous examples in recent memory is Target. The US retail chain thought it saw an opportunity in Canada when fellow retailer HBC closed its discount chain, Zellers. Target moved swiftly, buying up previous Zellers locations. Canadian consumers, who had been lobbying for Target for years, celebrated, and success seemed all but guaranteed.

Even in the first year of Canadian branch operations, however, there were signs of trouble. Within two years, Target announced it was shuttering the doors on its Canadian experiment.

The move left the business community asking, “What went wrong?” As it turns out, Target made a number of missteps when entering Canada. If you’re planning a Canadian expansion, heed these lessons and avoid making the same errors.

Conduct a Thorough Market Analysis

One of the biggest problems Target encountered was that top brass didn’t fully understand the Canadian market before crossing the border. This led to a number of problems, from market strategies to issues with the supply chain.

It’s easy for American businesses to assume they know how to deal with supply chain logistics. After all, the US is a geographic giant with many of the same geographical features and challenges. In Canada, however, issues within supply chains snowball due to smaller population centers. Servicing the same number of stores spread across the same area is even more costly and difficult when the population you’re working with is less than half of an American population.

The other major issue with Target’s market analysis was that it didn’t accurately portray why Canadians loved the brand. In addition to the empty shelves caused by supply chain issues, Target also failed to bring the exclusives it boasted in the US. Management mistakenly thought the excitement expressed by Canadian consumers was for low prices. If that had been the case, Zellers would have survived Walmart’s incursion.

Instead, Target made the error of going toe-to-toe with Walmart by offering low prices. It also tried to compete with other Canadian retailers, such as supermarket giant Loblaw’s, which offers chic, affordable fashion alongside groceries.

Take Smaller Steps

Within its first year, Target’s executives were admitting the retailer had bitten off more than it could chew with its Canadian expansion. This was apparent in the supply chain issues mentioned above.

Target overestimated enthusiasm and misunderstood what Canadians thought its brand offered. This led to overconfidence, and the brand bought up many former Zellers locations in short order, expanding rapidly throughout the country.

Opening fewer locations would have allowed for a more controlled, cautious expansion process. This, in turn, would have allowed Target to experiment on a smaller scale. The supply chain issues could have been resolved before they became widespread problems affecting thousands of Canadian consumers.

Tailor for Canadian Sensibilities

A slower expansion also would have allowed Target to tweak its Canadian strategy. One of the problems Target encountered was a failure to translate. Again misreading the market, Target thought Canadians wanted a pure replication of what they found in the US.

This didn’t work. Canadian consumers who were unfamiliar with the brand saw no reason to shop there. Those who were already Target customers in the US complained about higher prices and lack of selection.

In short, Target alienated the people who had advocated for it and failed to appeal to Canadian consumers who were unfamiliar with the brand.

Your strategy must be aligned with the Canadian market. Although Canada and the US share some cultural similarities, a carbon copy of a US company rarely finds a foothold in Canada.

If you keep these factors in mind, you’ll have a better chance at a successful Canadian expansion.

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

Topics: Business Expansion

An International Employer’s Basic Guide to American Payroll

Posted by Corinne Camara

|

Mar 25, 2019 9:00:00 AM

There are many different factors to consider when expanding to the US market. You’ll want to research local laws, as well as the American understanding of your product or service. How much demand is there for what you offer?

Request a quote for US payroll services today!

Another challenge of expansion is hiring and paying American employees. Payroll can be challenging in any market, but international employers may be at a loss when following American regulations.

If you’re seeking direction, start with this basic guide to American payroll. It outlines the major facets of conducting payroll for your US operations. From this solid foundation, you’ll be able to learn and grow.

The Basic Guide to American Payroll Starts with Compensation

Many countries, including the United States, have laws regulating compensation.

The federal government sets a minimum wage for US employees. Some states also set their own minimums. In most cases, state minimum wages exceed the federal level. Some states don’t set minimum wages.

The federal government has no legislation for how often employees must be paid. In the absence of a law, you can choose how often you want to conduct payroll. You could conduct it once a week, once a month, or even once a quarter if you wish.

States do provide regulations on the frequency of pay periods. Depending on where you operate, you may be obligated to conduct payroll on a more regular basis that you might otherwise choose to.

Taxation and Withholding

The next point in this basic guide to American payroll is taxation and withholding. As in some other countries you may operate in, you’ll be expected to withhold income tax from your employees’ wages.

You’ll need to consult with the most current income tax tables, which are published by the IRS. Tax brackets in the US range from about 10 percent to nearly 40 percent. The applicable tax bracket for any given worker depends on how much they earn. Those who make more will be taxed at a higher rate.

As the employer, you’ll be responsible for filing certain forms, as well as remitting payroll taxes to the IRS on time. For example, you’ll need to file Form 941 for quarterly reconciliation.

Employees must also pay into government-sponsored programs like Medicare and Social Security. You’ll be expected to deduct these premiums from employees’ pay, as well as to provide the employer match portion.

In some states, you must collect and remit state income tax. Finally, you should understand the unemployment tax regulations regarding what you may need to collect and remit.

Considering Labor Laws in the US

How you compensate an employee may be governed by a federal or state regulation.

For example, there are laws about when you’ll need to pay overtime. Some employees are exempt from overtime requirements.

Termination may be another area of concern. There is no federal law governing how employees are terminated, but individual states can set their own rules. In some places, you may need to pay employees for unused time off.

Finally, you’ll want to keep track of paid and unpaid time off. The Fair Labor Standards Act (FLSA) provides little in the way of paid leave. The Family Medical Leave Act (FMLA) provides for 12 weeks of unpaid leave. There are 10 national holidays, but they aren’t paid days off.

A basic guide to American payroll can help you get started and stay on track when it comes to paying your employees in the US. Once you’ve mastered the basics, you’ll have an easier time administering payroll.

blog-cta-us-payroll-services-2

Topics: Payroll

Subscribe to Email Updates

Recent Posts

Posts by Topic

see all