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How Americans Can Take Advantage of Payroll Services in Canada

Posted by Shannon Dowdall

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Oct 18, 2017 9:00:00 AM

How Americans Can Take Advantage of Payroll Services in Canada.jpgLooking to expand your workforce into Canada? It’s a popular option for American companies, especially in the era of mobile work. There are plenty of talented and skilled Canadian workers who fit the bill for roles with American companies, even if you’re not planning a branch office in Vancouver or Calgary just yet. 

There’s one major problem: payroll. Many companies decide to stay south of the border in order to avoid the headaches of paying foreign workers. 

Download our free guide on what US companies need to know about paying  employees in Canada.

Luckily, there’s an option for you: payroll services in Canada. Even if you’re not planning to expand into Canada, you can still take advantage of payroll services offered by Canadian providers. Here’s how it can work for you.

Paying Canadian Workers

If you work for an American company employing Canadians, you could run into trouble in terms of paying these workers. Payroll services in Canada are the usual answer to this conundrum. 

A Canadian payroll services provider has the expertise you need to navigate Canadian laws. Its team knows all about the various legislation protecting workers in different locations. 

If you choose the right partner, its team should also have expertise in helping American firms who have Canadian employees.

Using Payroll Services in Canada

Some American firms don’t employ Canadians nor do they operate branch offices in Canada. Why would they want to employ payroll services in Canada then? 

There’s a fairly obvious answer: price. The American dollar is currently worth more than the Canadian dollar, meaning US companies can pay less for the same service just by heading north. Since many Canadian payroll services companies already work with US firms that have Canadian operations, they have a great understanding of the US laws surrounding employment, reporting, and payroll. 

It’s a great option for American firms looking to outsource their payroll services.

More Advantages

There’s another reason going north of the border for payroll services works so well for American companies. Since the vendor is Canadian, in Canada, and operating on Canadian soil, you don’t need to worry about tax the same way you would if you hired an American firm.

Since Canada and the US have tax agreements, you can realize some tax advantages by outsourcing to Canada. Although things may be changing in the US, so far, relations and tax arrangements remain favourable.

How to Do It

One reason American companies don’t contract in Canada is that it seems complicated! For many, particularly small businesses, it seems much easier to employ a US company.

Yet it’s no more difficult than contracting to another outsourced vendor in another country. Many companies do that, so you know it can’t be too difficult. If it were, they just wouldn’t do it.

Why Go North?

Why should you choose a provider in Canada? There are two reasons. The first is familiarity with US law. Many Canadian companies must be aware of US laws around worker compensation, taxation, and so on. Canadian and American businesses work together closely all the time, which means payroll services in Canada often have the advantage of a team of experts who truly understand the legal issues.

The other reason is that you may eventually cross the border. Canada is one of the first markets US companies expand to, precisely because of favourable trade arrangements. Canada is also a first-stop for American companies looking for skilled and expert workers. In short, you may soon be eyeing the Canadian market! Getting payroll services in Canada will only ease this eventual move into a new market.

Get the Advice You Need

It’s easy to see how and why American companies should take advantage of payroll services in Canada. Talk to a potential partner today and find out just how easy it is.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Processing

4 Payroll Mistakes That Arise from Seasonal Employment

Posted by Anna Mastrandrea

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Oct 16, 2017 9:00:00 AM

4 Payroll Mistakes That Arise from Seasonal Employment--.jpgFor many businesses and workers alike, seasonal employment is a good thing! Businesses find the extra helping hands they need during peak seasons, while workers can gain experience or earn extra money. 

Some businesses use seasonal employment as a way to reduce overheads and save money. In some cases, this can be a good move. In other cases, however, seasonal employment can become a payroll tangle. This is particularly true if you don’t know the ins and outs of handling payroll for seasonal employees. 

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These four payroll mistakes are among the most common employers make when it comes to dealing with their seasonal employees. Steer clear of them to ensure seasonal employment remains a good option for your business.

1. Holiday Pay

Since seasonal employees are with you for a short time, you may not think they’re entitled to holiday pay. You might be wrong. It depends on how long the employee is working for you. 

If the employee works 16 weeks or less, they aren’t entitled to any public holiday pay. If they work more than 16 weeks for you, you need to compensate them for public holidays. For example, if your business in Ontario hired students to work from May 1 to August 31, you’d need to pay them for Victoria Day, Canada Day, and the August Civic Holiday/Simcoe Day. Why? The term of their employment is 18 weeks, which is above the 16-week cut-off. 

Employees you hire in the fall to work from October 1 to December 31, however, would only work 14 weeks. They would not be entitled to holiday pay.

2. Overtime Pay

Do you know the rules around paying seasonal employees overtime? Do you need to pay overtime at all? 

Like holiday pay, overtime compensation depends a lot on how long the employee is working for you. If the employee works more than 24 weeks of the year, you’ll need to provide overtime compensation as you would to any other employee. 

For those who work 24 weeks or less, you still have to pay overtime. However, the rules change a little. Those employees who work less than 24 weeks per year are entitled to overtime compensation, but only after they work 50 hours in a week. 

In theory, both of your seasonal employees—the summer students and the fall seasonal employees—could be eligible for overtime. Keep an eye on the hours you assign and any additional shifts the employees might trade or pick up from their co-workers to be sure you’re compliant.

3. The (Un)Exceptional Hospitality Industry

One of the industries that rely heavily on seasonal workers is the hospitality industry. Restaurants, bars, taverns, hotels, motels, and tourist resorts are heavily impacted by seasonal changes in tourism. A ski resort may be very busy in the winter but virtually dead in the summer. Other tourist attractions may see a boom in business during the summer.

There’s a common misperception: Seasonal employees in this industry have special exemptions or regulations. It’s not true. Everything in Canada’s Employment Standards Act applies to seasonal employees in the hospitality industry, including payroll regulations.

4. Severance Pay

Did you know you may actually need to pay a seasonal employee severance? You might not have realized this. Few employers do. It seems a bit strange: You and the employee are both aware of the seasonal nature of the role at the outset. The employee is aware the job will come to an end.

Yet, according to the Employment Standards Act, a seasonal employee might be eligible for severance pay even if you both knew the job would wrap up. Again, it depends on how long the employee spends in your employ.

If you keep an eye on these issues, you’ll be able to make the most of seasonal employment for your business.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

Outsource Payroll in Canada to Ease End-of-Year Business Woes

Posted by Corinne Camara

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Oct 13, 2017 10:30:00 AM

Outsource Payroll in Canada to Ease End-of-Year Business Woes--.jpgThe end of the year is certainly a busy time. Many small businesses end the fiscal year on December 31. Not only are you recovering from the holidays and making preparations for a new year, you’re also scrambling to close the books while everyone’s on vacation. 

Even if your year-end is at a different time—some businesses close their books on April 30 while others wait until September—it’s crunch time. You need to do paperwork and take inventory, in addition to keeping the business running as usual.

Getting a helping hand is never a bad idea, particularly when you’re busy.

Download our free guide on what US companies need to know about paying  employees in Canada.

It’s why a move to outsource payroll in Canada can help you ease your end-of-year business woes.

Better Recordkeeping

Ideally, you’d outsource payroll in Canada prior to your end-of-year activities. When you do, your partner provider has a better chance of easing your business woes. Why? The team will have better records to work with. 

Recordkeeping is a time-consuming task. Many business owners let it fall by the wayside, particularly when they’re busy. The sooner your payroll provider steps in, the sooner its team can get you back on track with better recordkeeping

If you must bring someone in last minute, your payroll provider can help you sort through your records, clean them up, and start with a clean slate for your new year.

Avoiding Audits and Fines

When you outsource payroll in Canada, you may be hoping to avoid a CRA audit or associated fines for your tax return. Your payroll provider can help, although it may not be able to get you out of an audit if you’ve been engaged in particular practices. 

Your provider can help you ensure you’re maintaining proper records and can provide them to the CRA. The provider’s team can also help you keep your payroll accounting on the up and up. Sometimes, you’re simply too busy or you’re unsure of the ins and outs of reporting. Your payroll partner knows payroll backward and forward and will make sure you’re reporting what you need to report.

Save Time

If you’ve been busy, you may not have kept great records, which can make the end-of-year crunch even worse as you attempt to sort out both math and paperwork. Even if you’ve kept good records, doing up the books for the end of the year can still be time-consuming. It’s less than ideal, since you’re already busy enough!

This is why many businesses outsource payroll in Canada: It saves time. Since your payroll partner is an expert, it takes less time to do up the books, even at the end of the year. While messy records may make the task somewhat more involved, your payroll provider can usually sort things out more quickly and easily.

As the team works on getting the books in shipshape for the end of the year, you can get back to focusing on the things that really matter for your business.

Save Money

You might think you’re saving money by keeping payroll in-house. Yet businesses, particularly smaller ones, usually run up rather large bills when they do so. Most of the costs are hidden, however, so it may look like you’re saving money!

You can spend a lot of your valuable time dealing with payroll, particularly at the end of the year. If it’s not your area of expertise, you might spend more time than you need to, and you also might make mistakes. More mistakes could translate into more fines.

When you outsource payroll in Canada, you’ll save time, which translates into cost savings. You’ll also find fewer errors in your reporting, which can help you avoid fines.

Get a Helping Hand

It should be clear that payroll services can help you and your business succeed. You can save time and money, and complete your end of year with less frustration than ever before.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

What to Prioritize When Seeking Payroll Services in Canada

Posted by Karen McMullen

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Oct 11, 2017 9:00:00 AM

What to Prioritize When Seeking Payroll Services in Canada--.jpgYou’ve made the decision: You’re going to partner with a payroll services firm to get your payroll done right. Now you need to evaluate your potential partners. 

Sometimes, finding the right partner is even more difficult than making the initial decision to send your payroll operations out of house. If you’re feeling lost when it comes to scrutinizing offers and potential partners, take a look at these factors.

Download our free guide on what US companies need to know about paying  employees in Canada.

Experience

Whether you’re a small Canadian business or an American firm looking to expand north of the border, you want any partner offering you payroll services in Canada to have experience. 

While you might be able to score a “good deal” by partnering with a less experienced company, you also increase the risk you’ll run into audit issues come tax time. You or your employees may also suffer, particularly if the inexperienced provider makes mistakes. 

An experienced provider of payroll services in Canada knows what it’s doing. It’ll minimize mistakes, streamline your processes, and look out for audit issues before they even become issues.

Expertise

While experience is important, so is expertise. The two often go hand in hand—but not always. Just because a potential provider is experienced doesn’t mean its team has the expertise and training to handle your payroll! 

This is particularly true when it comes to compliance issues. A provider may have experience but it could also have a track record of non-compliance. If so, steer clear! 

You want any firm providing payroll services in Canada to be an expert. Not only will an expert provider handle your services correctly, it’ll also be able to answer any questions you have and steer you in the right direction.

All-in-One Services

You may not be looking to outsource all of your HR functions right now. You might be looking at sending only payroll out for now. Have you thought about the future, however? As your business grows and expands, it may become beneficial to have an HR partner waiting in the wings.

Your payroll services provider should offer you all-in-one services, not just for your payroll needs but for HR as a whole. This gives you unprecedented flexibility when it comes to scaling your services.

If a provider doesn’t offer this, you may end up being nickel-and-dimed for every service you need, both now and in the future. If you’re hoping to save some money by moving payroll services over to a provider in Canada, this situation is less than ideal.

Full Remittance Coverage

One thing you need to be careful of when you’re looking for payroll services in Canada is dishonest operators. You’ll know them when you see them because they often play this trick:

Many service providers in Canada will claim to cover all of your remittances. In reality, however, they only cover the payroll tax. You want a provider that covers everything, including worker’s compensation and any other provincial tax you might encounter.

You should press any potential provider on the remittances it covers. Always be leery if providers claim they “cover everything” but then want to charge additional fees. Read over the fine print before you sign on the dotted line.

Superior Customer Service

What do others have to say about this payroll service provider? Are they impressed? Did they like working with the team?

Do a little independent research before you sign up with a provider. Reviews from clients can be helpful. Of course, you should also discuss the level of customer service support with the company you’ll be working with.

Remember: If you’re not impressed by the customer service you receive during the negotiation phase, it probably won’t get any better once you’ve signed up. Look for payroll services in Canada offered by a provider that aims to wow you from your initial conversation.

If you prioritize these factors, you’ll be able to select the right partner for your business.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

Calling Businesses in Canada: Payroll Audit Fines & How to Avoid Them

Posted by Stacey Duggan

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Oct 9, 2017 9:00:00 AM

Calling Businesses in Canada Payroll Audit Fines & How to Avoid Them--.jpgYou’ve been selected for a payroll audit. It’s not exactly pleasant news, and few business owners want to hear it. Yet, provided you’re doing everything on the up and up, an audit shouldn’t have you too strung out. Yes, it’s additional work, but you’re on the right side of the law. 

For many Canadian business owners, however, audits often leave them with a few payroll audit fines for things they didn’t even know they weren’t supposed to be doing. Here are some of the common payroll audit fines and how you can avoid them.

Download our free guide on what US companies need to know about paying  employees in Canada.

Unreported Payments

The CRA is very concerned about the underground economy in Canada, and one of their goals is to eliminate it. It’s easy to see why: Workers paid “under the table” rarely pay income tax on their wages. For businesses, there’s incentive to pay people above board, such as writing off the expense, but there’s equal incentive to pay people and keep it off the books. 

If you’ve been paying individual workers under the table for their services, you could end up paying costly fines if your payroll is audited. Instead, keep everything above board. There’s one major advantage for you in doing this: You can write off these payments against your taxes.

Improper Reporting of Securities and Stock Options

Employees aren’t taxed for securities or stock options until they exercise or dispose of the option. You, as the employer, however, need to be keeping track of employee stock options and reporting on them. If you don’t, you could end up paying fines for improperly reporting this information.

Reclassifying Employees

You’ve probably heard about businesses firing people, only to rehire them, often at a lower wage. Another common practice is to fire someone, then hire them to perform similar or the same services as a contractor. 

The CRA frowns on this. The act of firing and rehiring may be enough to initiate an audit in the first place. If the CRA finds the rehired worker is conducting similar work in the same or a similar workspace, they’re likely to fine you. 

Avoid this by ensuring you use proper contracts and have the worker agree to all of the clauses laid out therein.

Personal Expenses

Some employers in Canada offer their employees additional “perks,” such as reimbursement for living expenses. The CRA sometimes finds these perks taxable, pensionable, and insurable. If that’s the case, you might be accused of hidden remuneration. 

Avoid fines on this front simply by reporting your employees’ personal expenses, if you offer this perk.

Failure to Maintain Records

This is a particular danger for small business owners: The CRA may cite you for failure to provide or maintain adequate records. You may be struggling to keep the books yourself, or you may have passed the duty to someone else. 

While inadequate bookkeeping is unlikely to sink your business, it could result in a request for compliance from the CRA and a fine of up to $1,000. 

The biggest problem is usually business owners who believe they have proper bookkeeping, but may not have kept records in accordance with the Income Tax Act. If the bookkeeping hasn’t been up to snuff, the CRA may find additional problems during an audit, resulting in more payroll audit fines for the business. 

The solution? Hire someone to keep the books properly! Many services are much more affordable then you think they are. Getting expert help in simply keeping proper records can help you avoid many of the payroll audit fines you’re likely to encounter.

Getting Help

Partnering with a payroll services provider can help you avoid many of the payroll audit fines in Canada. They know the ins and outs of the law and the best practices to keep you on the up and up.

7 Signs It's Time to Outsource Payroll

Make Sure You Know These 5 Audit Issues

Posted by Stacey Duggan

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Oct 6, 2017 9:00:00 AM

Make Sure You Know These 5 Audit Issues--.jpgWhether you’re managing it in-house or working with a PEO company, the importance of managing payroll correctly isn’t lost on you. 

Yet many companies still struggle. This is especially apparent when tax time comes along and the CRA selects you for a payroll audit. Keep these five issues in mind during the entire payroll process to help prevent an audit.

Download our free guide on what US companies need to know about paying  employees in Canada.

1. Salary Expenses

Salary expenses are among the most common infractions the CRA looks for when it conducts an audit. You might think this is the easiest factor to get right, yet many businesses get nailed on it. 

Why? It seems simple enough: You pay your employees, you note it down on their T4s, and you call it a day. But some businesses forget about bonuses, commissions, and cash payments made to employees, so they don’t go through payroll properly. Other businesses purposely leave these items off the payroll, in effect paying employees “under the table.” 

The CRA is very concerned with the underground labour market in Canada, so you can bet it’ll be watching for irregularities relating to payments.

2. Shareholder Benefits

Shareholder benefits are often incorrectly reported or calculated. Part of the problem is the misunderstanding between accounts payable and human capital managers. They might be on different pages about how shareholder benefits should be handled! 

The best thing you can do to avoid audit issues related to the calculation of shareholder benefits is to check out the CRA’s website. The agency provides exact guidelines about when to report shareholder benefits and how to calculate them. 

Of course, if you don’t follow the CRA’s guidelines, they’re going to find out when they audit you. It’s better to play it safe.

3. Director Fees

Another sticking point is director fees. There’s often confusion about when and how to calculate director fees. Most of the time, these fees aren’t insurable, but in some circumstances, they are taxable and pensionable.

Much of it depends on how directors are selected in your company and the benefits bestowed on them. Some directors are elected while others are appointed. Some are entitled to a stipend. Different situations mean different rules when it comes to paying and reporting these fees.

Again, the CRA’s website lays down the law, so use its guidance to avoid audit issues later on.

4. Parking

Did you know parking is a taxable benefit? Many employers don’t! While there are exceptions, you should treat parking you offer to your employees as a taxable benefit. Doing so will help you avoid audit issues if the CRA decides to investigate your books.

Parking isn’t always a taxable benefit. For example, providing parking for a disabled employee is non-taxable. The same is true of parking situations where there are fewer spaces than employees. In most other situations, however, the CRA considers the provision of parking as a taxable benefit, whether or not you own the lot.

You should report the fair market value of this benefit, less any cost your employee bears. If you pay for your employees’ parking, talk to your payroll provider about how to report this benefit.

5. Automobile Operating Expenses

Do your employees often drive for work? If they do, you’ll need to keep accurate logs about who is driving, when, where, and how far. If you have fleet vehicles—company-provided cars, trucks, or vans—you must keep logs. 

Employees who use personal vehicles for company purposes should also keep a log. You’re not necessarily required to, but it’s a good idea for both you and the employee. Employees often report inaccurately, which leads to you having incorrect data for your books. Use an app to cut down on incorrect reporting.

If you keep an eye on these five audit issues, audit time will be much less stressful!

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

Topics: Compliance

5 Audit Issues You Can't Ignore

Posted by Ray Gonder

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Oct 4, 2017 12:45:00 PM

5 Audit Issues You Cant Ignore.jpgSometimes, it’s easy to turn a blind eye to potential issues with payroll. After all, you’re not planning on being audited any time soon.

Unfortunately, who and when the CRA decides to audit isn’t up to you, so you may find yourself facing an audit sooner than you’d like. While it’s an unpleasant situation to find yourself in, you won’t have much to fear if you’ve kept payroll on the up and up.

Download our free guide on what US companies need to know about paying  employees in Canada.

With that in mind, here are five common audit issues you can’t afford to ignore.

1. Unreported Payments to Independents

Businesses hire independent contractors for any number of different services these days. You might have a contractor deliver services on an ongoing basis or you might decide to contract out a one-time project or job. Services rendered range from HR functions to maintenance jobs around the office.

You must report every payment you make to your independent contractors. Many business owners don’t, instead paying by cash or otherwise leaving the payment off the books. This is especially the case for services such as office maintenance, but it happens with other contractors as well.

If you’re audited, however, the CRA will notice gaps in your accounting and question where the funds went. Since it is trying to crack down on the underground labour market, you could find yourself facing legal trouble.

2. Reclassifying Employees

Another issue the CRA watches for is the reclassification and misclassification of employees. Some unscrupulous employers might “reclassify” employees in order to reap particular benefits, such as lower overheads or tax write-offs.

One particular way of doing this is letting an employee go, then re-hiring the same person, sometimes as an independent contract, to do the same or similar work. The CRA frowns on this practice in particular.

If this happens, make sure you have a written agreement with the contractor laying out the facts. It’s best to have your bases covered.

3. Reimbursement of Personal Expenses

Do you offer your employees perks, such as a subsidized living expense? If you have a travelling sales team, you might reimburse them for their travel time and costs through an expense account.

If you do offer anything of the sort, the CRA is likely to consider it taxable, pensionable, and insurable. Do yourself a favour and ensure reimbursement payments of all personal expenses are reported. It’ll save you a lot of trouble at audit time!

4. Vehicle Allowances

If you offer your employees a flat-rate allowance to drive for work-related reasons, you’ve provided them with a taxable, insurable, and pensionable benefit. This kind of benefit is not reliant on the number of kilometres driven but is instead a flat-fee you pay your employees if they have to drive on your behalf.

Some employers administer a vehicle allowance instead of reimbursing by the kilometre because their employees have to drive often. Yet a surprising number of employers fail to report this benefit, which spells trouble when the CRA audits payroll.

Be sure to report vehicle allowances and collect the appropriate CPP and EI amounts. A good plan of action is to use payroll software to automate this or hire a PEO to help.

5. Security and Stock Options

Do you report your employees’ securities and stock options? You probably should since this can be classed as a taxable benefit. If you fail to report, the CRA may consider it hidden remuneration.

The situation is tricky since securities and stock options only become taxable when employees actually exercise or dispose of their options. In theory, if none of your employees took advantage of the option, there would be no need to report.

Your employees are likely to exercise or dispose of their stock options, however, so it’s just as easy to keep tabs on them and report them.

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

Topics: Compliance

Expanding Your Business? Canadian Payroll Service Providers Can Help

Posted by Shannon Dowdall

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Oct 3, 2017 9:00:00 AM

Expanding Your Business- Canadian Payroll Service Providers Can Help.jpgA growing business is a good thing! It doesn’t ease the growing pains you might encounter as you expand your business. As the business gets larger, there are more and more tasks to be taken care of. You need more hands on deck to keep things running smoothly.

This is true whether you’re a Canadian business expanding into new markets across the country, or an American firm looking to come north of the border. No matter where you’re based, however, the fact remains: The business is getting bigger, and you need a helping hand.

Dealing with Payroll

As businesses expand, many leadership groups consider the possibility of sending certain responsibilities out of house. Often, they choose an expert provider to team up with. The provider then delivers the business service, using their expertise in the area.

Payroll is one of the services business owners commonly think about turning over to a partner. There are numerous reasons for this. First, payroll tends to be a routine function. You perform it week in and week out, often in a very similar way. Second, a partner, such as Canadian payroll service providers, have expertise in the area you and your team may not.

As a result, Canadian payroll service providers can usually deliver superior service in less time. Letting the experts deal with payroll allows you to get back to the really important things in your business!

The Provincial Tangle

Another reason businesses team up with Canadian payroll service providers has a more legal aspect. There are many different laws and regulations governing worker compensation, benefits, and even record-keeping. Working with someone who knows the ins and outs of the legalities can save you a lot of headaches when it comes time to close the books.

Canadian small businesses might not think they need the help of a payroll service provider. After all, they’re already operating in one Canadian province, so they know everything they need to know if they want to open up shop in another.

Rules and laws vary from province to province, however, so most Canadian businesses benefit from the expertise of a Canada-wide payroll service provider. They know the differences between provincial jurisdictions, and they can navigate them with ease.

If you’re a Canadian business looking to expand your operations into other provinces, Canadian payroll service providers can help!

Foreign Affairs

Many businesses from outside of Canada also look to expand into the Canadian market. American companies often look to Canada as their first “foreign” market. Many American firms open up branch offices and run operations in Canada.

Of course, the rules are different in Canada versus the United States or anywhere else for that matter. American companies can benefit from the expertise Canadian payroll service providers offer them when it comes to record-keeping, paying workers, offering benefits and other forms of compensation, and virtually everything else. These payroll experts will keep things running smoothly when you come north of the border.

Businesses with headquarters in other countries can also benefit from this expertise when they look to enter the Canadian market.

What about Lawyers?

If all you need is legal advice about how to keep the books, why bother engaging a payroll service provider? Wouldn’t you be better served by consulting a law firm to get the scoop on what’s different in Canadian and provincial law?

Canadian payroll service providers don’t just dole out advice, which is the difference here. Instead, these providers are your partners in actually ensuring your accounting and bookkeeping are on the up and up.

Legal advice might be helpful when you’re just getting started, but the law firm probably won’t be as much help when the CRA decides to audit your books.

Good Business Sense

If you’re looking to expand your business into Canada, there’s no better partner than Canadian payroll service providers.

What US Companies Need to Know about Paying Employees in Canada

Topics: Canadian Payroll

How to Avoid Payroll Fraud When Expanding into Canada

Posted by Stacey Duggan

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Sep 27, 2017 9:00:00 AM

How to Avoid Payroll Fraud When Expanding into Canada---1.jpgWhether it’s done unintentionally by a business, or intentionally by its employees, payroll fraud is a lot more common than you think. In fact, payroll fraud happens in 27 percent of all American businesses and occurs nearly twice as often in small organizations with less than 100 employees than in large ones. If your business is expanding into Canada, committing payroll fraud can be done unintentionally and it’s a lot easier to do than you think.

Download our free guide on what US companies need to know about paying  employees in Canada.

Avoiding payroll fraud is an absolute must for expanding businesses. Expansion should start on the right foot—not with a lawsuit. In order to ensure your business is in compliance with Canadian payroll laws and avoids internal payroll fraud, here are some things you need to consider.

The Types of Payroll Fraud

In most cases, there are two major ways payroll fraud can occur: at the fault of employees or at the fault of a business. Employees can embezzle money from the business they work for, while businesses can curve taxes from the government. Whether it’s intentional or not, in the eyes of the law, payroll fraud is always a crime. If you don’t take the necessary precautions, you can be prosecuted.

First and foremost, your employees can commit payroll fraud. If your payroll system isn’t closely monitored or handled by a trusted professional, it can actually be quite easy. Ghost employees are one of the most common types of payroll fraud. This involves a payroll manager or staff member creating fake employees or failing to remove terminated employees from the payroll system. Funds are then diverted to these ghost employees and a payroll staff member claims the money. Timesheet fraud is also a major concern, as more than just payroll staff can commit this type of fraud. Timesheet fraud involves employees incorrectly documenting the .

00number of hours they’ve worked, leading to a higher paycheck, for hours that aren’t actually real.

On the other end of the spectrum, employers are also capable of committing payroll fraud, and the Canadian Revenue Agency often isn’t very forgiving. Worker misclassification for example, can be committed intentionally or due to a misunderstanding of the rules: a mistakes that’s easy to make for businesses expanding into Canada.

The CRA requires businesses to classify each and every employee as full-time employees or independent contractors, depending on the type of work, benefits, and pay the employee receives. However, to avoid paying health insurance premiums, sick pay, payroll taxes, and other fees, some employers will intentionally classify workers as independent contractors, when they’re not. Whether it’s done on purpose or on accident, worker misclassification leaves your business responsible for paying up to $25,000 per instance, and in some cases, you can even face jail time.

For businesses expanding into Canada, it’s easy to overlook the important of regulated payroll, inner-business audits, and a thorough understanding of Canada’s payroll rules.

How to Avoid Payroll Fraud

Now that you know how payroll fraud can occur, it’s time to figure out how to avoid it.

For many businesses, solutions are as simple as introducing regular payroll audits, advanced punch-in systems, and payroll staff the company can trust. However, for businesses that are expanding into Canada, these tips aren’t enough. The greatest solution involves outsourcing payroll.

When you outsource payroll, not only is a trusted and professional business monitoring your payroll functions, you can also rest easy knowing all Canadian laws are being abided by. This leaves you in a safer situation to focus on other aspects of business, without neglecting the importance of payroll.

Where to Start

Reaching out to a payroll service provider is an absolute must. All your questions and concerns regarding payroll fraud and expanding into Canada can be addressed online, or through a quick phone call. Don’t leave your business at risk: learn how a payroll provider can help

What US Companies Need to Know about Paying Employees in Canada

Topics: Compliance

A US Company Wants to Hire a Canadian Staffing Agency: Next Steps

Posted by Karen McMullen

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Sep 25, 2017 9:00:00 AM

A US Company Wants to Hire a Canadian Staffing Agency- Next Steps.jpgAs an American company expanding into Canada, hiring a staffing agency is a smart move. Managing business on the other side of the border can be a handful, especially when you have other, more important business duties to handle. However, how can you ensure you pick the right Canadian staffing agency?

Download our free guide on what US companies need to know about paying  employees in Canada.

If a US company wants to hire a Canadian staffing agency, there are some questions you must ask yourself before making the investment. Otherwise, you risk working with an agency that doesn’t cover all the services or needs you require. Continue reading for some valuable next steps for when a US company wants to hire a staffing agency in Canada.

What Are Your Staffing Needs?

The first step you should take when looking for a Canadian staffing agency, is considering what you need in terms of staff. How many people are you looking to hire? What skills does each candidate need? Is there any past experience that must be on the qualifying list? Will anyone you hire be a contract worker, or is everyone a full-time hire? Yes—the questions can be overwhelming. But without understanding them, you won’t be able to provide your staffing agency with the information they need to make the right calls in terms of hiring.

Before you reach out to a hiring agency, make sure you have a clear list of exactly what employees you need in order for business to run smoothly. This helps the agency make clear job descriptions, better interview candidates, and determine who would be the best fit for your business.

Do You Need Services Beyond Hiring?

This might be a question you haven’t considered. Of course, most staffing agencies only help with the recruitment of new hires. However, as you expand into Canada, you might find yourself in need of more than just the basic recruitment services. How will you handle employee training? If something doesn’t workout, who will handle terminations? Have you considered how you’re going to handle the payroll of all these new hires?

From employment standards to payroll regulations, there’s a lot to handle when you expand your business into Canada. Unfortunately, if it isn’t done right, you can find yourself facing a long list of fines and penalties. In 2013 alone, the Ministry of Labour initiated 286 prosecutions due to violations in the Employment Standards Acts. Violations can range from improperly distributed vacation pay to failure to provide Employment Insurance. Regardless, there’s a lot of room for error.

Thankfully, some agencies in Canada offer more than just recruiting services. Consider outsourcing your business needs to an Employer of Record (EOR). When you work with an EOR, a reputable company with decades of experience in international business will handle everything from hiring, training, to proper payroll functions.

How Will You Ensure You’re in Compliance with Canadian Laws?

As mentioned above, Canada has a lot of rules and regulations that are very different from the US. If a US company wants to hire a Canadian staffing agency, a vital step is looking for agencies that are experts in Canadian taxation, payroll, and employment standards. 

Every year, Canadian standards evolve both federally and in each individual province. For many business owners, it’s too much to keep up with. A staffing agency won’t likely take these laws into consider past the recruiting process, leaving you to handle compliance on your own. 

However, if you consider working with an EOR, you can rest easy knowing your business is running in compliance with all Canadian laws. From taxes, employment standards, all the way to payroll regulations, an EOR provides much more than just hiring service. 

If a US company wants to hire a Canadian staffing agency, expanding their search to include an Employer of Record will give you more bang for your buck and a better expansion process in the long run.

What US Companies Need to Know about Paying Employees in Canada

Topics: Business Expansion

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