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What International Companies Need to Know about Severance in Canada

Posted by Stacey Duggan

|

Apr 6, 2018 9:00:00 AM

What-International-Companies-Need-to-Know-about-Severance-in-Canada-compressor.jpgAs an international company operating in Canada, you’re well aware of the differences in rules. Payroll is most definitely not the same, and the business taxes you face are also quite different. There may be different regulations for the products or services you offer. 

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

This is also true when it comes to employment legislation and the rules around hiring employees, compensating them for vacation time and leaves, and so much more. Letting an employee go might be another issue. While you hoped never to face it, you now need to terminate someone’s employment with your company. 

Severance may be one thing you’re wondering about. How exactly is it handled in Canada?

When Must You Provide Severance?

The first question you’ll need to ask is when you’ll need to provide severance pay. There are quite a few scenarios. 

If you dismiss or stop employing the person, they may be entitled to severance pay. If you’ve gone bankrupt or declared insolvency, you cease to employ the person and they’ll be entitled to severance. If you give employees an ultimatum and they decide to resign as a result, they’re entitled to severance. 

If you lay off an employee for more than 35 weeks in a 52-week period, their employment is considered terminated. If you decide to close an office or discontinue business at a location, you’re considered to have laid off the employee.

A Mix of Notice and Severance

If you give an employee written notice of their termination and the employee then resigns with two weeks’ notice, you may be required to pay them severance. This situation would come up if the employee was still entitled to termination pay beyond those two weeks.

Other Reasons to Provide Severance

These aren’t the only scenarios when you may be required to or even want to provide severance to employees. If you need to lay off employees, you might offer a severance package immediately. Employees who opted to take it would be free to seek out other employment.

A restructuring activity may also put severance on the table. Some employees may not like the new terms you’re offering them and, since they’re not the terms they were hired under, they have legal grounds to refuse. You can offer these employees severance.

What Are the Rules?

Like virtually everything else in Canada, severance rules differ from province to province. If you operate in Ontario, you’ll need to look at the rules for severance in Ontario. Someone operating in BC will need to look at that province’s legislation.

To fully understand severance pay, you’ll need to look at the employment legislation for each province you operate in.

Compensation for Long Service

Generally speaking, severance pay is awarded to employees who have been with your company for some time. They may be senior employees or they may have a long-service track record. Often, they have seniority in the firm and they may even have specific skill sets and expertise. Severance is designed to compensate them for the loss of employment.

As a result, you may wish to offer severance in other circumstances than those required by law. You’re only bound to provide severance in the cases specified by the law, however.

How Do You Calculate It?

Each province lays out its own rules for calculating severance pay. In Ontario, you add together the number of years of employment plus the number of months of an incomplete year. Take the sum and multiply it by the employee’s regular weekly wages. This will give you their weekly severance pay for a maximum of 26 weeks.

Different provinces use different formulations, of course, so severance pay for an employee in BC can’t be calculated the same way.

If you’re concerned about severance pay or need to calculate what it will cost you, talk to a Canadian EOR and payroll service provider. They can walk you through the steps and help you navigate the nuances.

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

Topics: Business Expansion

Try Our 2018 Canadian Payroll Calculator

Posted by Stacey Duggan

|

Mar 9, 2018 9:00:00 AM

Try-Our-2018-Canadian-Payroll-Calculator---compressor.jpgTax season has arrived! As you busily prepare your return for the 2017 year, your thoughts may have already turned to how you can better prepare for this year. If your bookkeepers are flustered and overworked as they scramble to get your 2017 tax return in order, they’ve no doubt wondered if there’s an easier way to do things. 

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

As the old saying goes, an ounce of prevention is worth a pound of cure. Instead of trying to fix everything at the end of the year, you’re thinking about how you can get it right out of the gate instead. Wouldn’t it be wonderful if you could be sure you were calculating and collecting the proper payroll taxes and calculating vacation pay properly? 

You can! Give the updated 2018 Canadian payroll calculator a shot.

Updated CRA Rules

As with almost any government revenue department, the Canada Revenue Agency (CRA) updates its rules and processes on an almost yearly basis. This reflects changes in legislation, which then affect how businesses are to administer payroll and what withholdings they need to collect. 

Sometimes, legislation changes are the result of new government bills being passed into law. In other cases, the changes result from provisions in laws already on the books, which see increases (or decreases) over time. 

New tax credits come and go, and income tax rates change. You should always check in with the CRA or your Canadian PEO to find out about the latest changes and updated rules to make sure you’re up to date.

Changes in the Business

The other issues complicating payroll are the changes within your own business. Employees get raises or are promoted and end up in new tax brackets. Someone accrues more vacation days or more sick days because of the length of their tenure with your business. You may decide to offer a benefit or restrict your existing plan. All of these changes can affect your payroll and the withholdings you need to collect. 

You might also change your operations. Maybe you’re hiring temporary or seasonal employees for the first time. Maybe you’ve just expanded your operations from Ontario into British Columbia as well. You have lots to learn.

Why Use a Canadian Payroll Calculator?

With so many different things to keep track of, from CRA rules to expansions in your business itself, you might wish there was a tool to help you.

The good news is there are tools available. Payroll calculators were created to help business owners and accounting professionals keep things straight when it comes to figuring out payroll and withholdings. A Canadian payroll calculator in particular helps you keep track of payroll deductions for each of the 10 provinces and three territories.

Calculators come with pre-set functions. You input the information, such as the employee’s hours, their rate of pay, and where they work, and the calculator will do the rest. The best calculators ask for more information, but even the most basic can give you a quick check to ensure you’re on the right track with payroll.

The 2018 Update

As useful as calculators are, they’re not much help if they’re outdated. It’s why you need to give the new 2018 Canadian payroll calculator a whirl. If you’ve been using the 2017 calculator, you may be surprised to find just how much has changed between last year and this year.

What changes are there? You can take a look at the CRA’s website for a comprehensive listing of all the changes to the tax regime in Canada. The updated 2018 calculator reflects all of these changes, which will help you estimate payroll more accurately. Better estimates mean fewer errors to correct and less scrambling later on.

Try the new 2018 Canadian payroll calculator for yourself! Your accounting and HR staff will thank you.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Processing

4 Signs Your Company Needs Employer of Record Services

Posted by Stacey Duggan

|

Feb 19, 2018 9:00:00 AM

4_Signs_Your_Company_Needs_Employer_of_Record_Services.jpgEmployer of record services have been growing in popularity in recent years. As the size of the contingent workforce has grown, and more businesses and industries have adopted contingent working arrangements, the need for these services has also grown.

The contingent workforce is predicted to keep growing into the future, which means EOR services aren’t going anywhere any time soon. In fact, you might be looking at adopting them for your business in the near future. You may even need these services right now!

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

How can you tell if you need to adopt employer of record services in your business? These four signs may provide some clues.


1. You’re Hiring Many New Contractors

Until recently, most companies used part-time and full-time permanent working arrangements. You’d hire an employee and they’d stay with you until you let them go or they quit. If you didn’t need another person working 40 hours a week, you may have hired someone part-time versus full-time, but that was about as much flexibility as you had.

Now, you have a choice of many different options, all designed to give you much more flexibility. Seasonal, temporary, and contract workers have all become much more popular. Today’s business environment demands organizations be nimble, and a contingent workforce helps you navigate this environment more easily.

If you’ve recently started hiring contractors or you’ve hired quite a few of them, you may find you don’t have the resources to manage them properly. In this case, employer of record services could be just what you need.


2. You Don’t Know the Legislation

Are you expanding your operations into Canada?

This situation can quickly become confusing. How well do you know the legislation in Canada? You may be surprised by the number of differences between Quebec and Ontario! Foreign firms have a large challenge ahead of them. The Canadian payroll and taxation system is quite different from that of the US or the UK. Add in the fact that legislation changes between provinces and territories, and you have a recipe for trouble.

Employer of record services help you avoid any trouble with the Canada Revenue Agency. Since the service provider handles everything to do with payroll, you don’t need to worry the CRA is going to come knocking on your door about a tax error you didn’t even know was an error.


3. Your HR Department Is Overwhelmed

Whether it’s because you’ve suddenly expanded your contingent workforce or because you’re operating in many new jurisdictions, you just don’t have the HR personnel to keep up with payroll and taxes any longer. Your people are constantly run off their feet.

What should you do? Hiring is one option, but you’re not sure your budget can take it. Take some of the load off by getting employer of record services. These services are often a more economical solution than hiring more staffers for the HR department. It allows your team to focus on their core tasks, rather than trying to learn Canadian tax legislation and Saskatchewan vacation time rules inside out.


4. You’re Concerned about Compliance

Maybe you’re operating in a new jurisdiction. Maybe you’ve had a tax audit in the past.

Whatever the reason, you want to make sure you’re compliant. Employer of record services make it easy!

If you see these signs in your business, consider employer of record services as a solution. Talk to a provider today and discover how they can help you run your business more effectively and efficiently by taking over the legal management of your employees.


What US Companies Need to Know about Paying Employees in Canada

Topics: Employer of Record

9 Payroll Solutions to Save Your Business Time and Money

Posted by Stacey Duggan

|

Jan 22, 2018 9:00:00 AM

11_Payroll_Solutions_to_Save_Your_Business_Time_and_Money.jpgEvery company is unique and has its own strengths, weaknesses, values, and goals. But almost every company can agree on a common source of frustration: payroll. There are many ways to reduce payroll mistakes, but if you’re serious about saving your business time and money, it’s probably time to implement some of the following payroll solutions.

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


1. Switch to Salaries

This payroll solution may seem like a big change, but it could save you lots of money. When you begin paying your employees by salary rather than hourly wages, it simplifies the payroll process and ends up saving you time every payday. Staff hours won’t fluctuate anymore and you won’t need to keep track of hours worked or fiddle with inputting different values every week.


2. Outsource

If you want to save yourself time and you find that the payroll process has become quite arduous, try outsourcing. You save labour hours by taking the task off of your hands and handing it over to professionals who may be able to complete the process faster.

Not to mention, you may be putting your company at risk by handling payroll on your own.


3. Go Green

Still issuing paper pay stubs? It may be time to switch it up. Make online pay stubs mandatory and you could save your company money on paper and postage. You could take it a step further and save money on tasks other than payroll; like these companies, who not only saved money but also made money by going green.  


4. Open a Second Bank Account

Tax professionals suggest that you operate a separate bank account that is used for payroll only. This separates money that is appropriated for payroll and payroll taxes from general business funds. It helps you stay organized and reduces your chances of making a mistake.


5. Make Direct Deposit Mandatory

The more uniform your payroll practices are, the easier they will be. Direct deposit is more convenient for your staff and it saves you money spent on drawing up paper paycheques.


6. Offer Unlimited Holiday Time

By giving your staff unlimited PTO, you reduce the number of pay-codes you have to deal with. Not to mention, it can dramatically increase morale.


7. Use the Cloud

More and more companies are planning to move payroll to the cloud. Doing so can reduce labour time by eliminating manual work. Even better, you can integrate this with other HR software.


8. Start an Internship Program

There’s never a shortage of students looking for professional experience. Consider partnering with a local college or business school and starting an internship program. This way, you can become better involved in the community while receiving additional help.


9. Allow for Attrition

Attrition can save you money gradually, over a long period of time, and you don’t even have to do much. Simply eliminate as many unnecessary staff functions as possible in order to consolidate positions. This payroll solution can save you big bucks and even increases efficiency.


7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

7 Audit Issues Canadian Payroll Companies Must Avoid

Posted by Stacey Duggan

|

Jan 12, 2018 9:00:00 AM

7-Audit-Issues-Canadian-Payroll-Companies-Must-Avoid---compressor.jpgAt some point or another, you might have to deal with the CRA if you’ve been audited. However, audits are easier to get through when the business is compliant with CRA guidelines. 

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

Steer clear of these seven audit issues.

1. Personal Expense Reimbursement

Ensuring business and personal expenses are kept separate maintains a clear distinction. Wider-ranging CRA audit guidelines allow auditors to cast a wide net, and they might look into these reimbursements. You don’t want them to appear as hidden remuneration, and offering these kinds of perks may be found taxable, pensionable, and insurable by the CRA.

2. Employee Reclassification

Canadian payroll companies have to classify employees correctly to ensure the right tax amounts are deducted. Don’t use loopholes to attempt to get around employee classification, like terminating an employee and re-hiring them as a contractor. 

What’s the difference between employees and independent contractors? If you’re unsure whether you’ve defined your employees correctly, the CRA website lists helpful tips.

3. Vehicle Allowances

The standard definition of vehicle allowance is a flat rate allowance to drive for work-related purposes. The benefit of personal use of a company vehicle must be included on staff members’ T4 slips as income. Taxable benefits for vehicles indicate they’re pensionable and insurable, which requires reporting CPP, EI, and income tax.

The CRA recognizes two taxable benefits related to company vehicles: a standby charge similar to car wear and tear, and operating a cost benefit related to the number of kilometres a vehicle is driven. Whether it’s a fleet vehicle or personal, best practice for Canadian payroll companies is to keep a logbook for both types to avoid any auditing issues.

4. The Independent Contractor

Independent contractors are not employees, which means they’re paid differently than your salary staff. Employees must be classified correctly to ensure adequate payroll and tax deductions.

Consider making it a mandatory policy to use the T4A slip for subcontractors or independent consultants.

5. Timely Remittances

Not remitting government deductions on time is a CRA red flag. Money that’s collected from payroll sources and GST has to be submitted on time. Knowing how payroll taxes are calculated is important, in addition to knowing remittance deadlines. Failing to submit them on time results in stiff penalties by the CRA.

The government considers these amounts as their own “funds in trust” held by a business on a government’s behalf. Canadian payroll companies should ensure they submit their payments on time and in the correct amounts. Staying diligent about this duty keeps you clear of any auditing mishaps.

6. Salary Expenses

Bonuses, cash payments, and extra compensation for employees should go through payroll to ensure they’re included on the T4 slip. The CRA looks out for this to ensure you’re keeping an updated record of any staff gifts and to guarantee these gifts are properly reported.

7. “Associated” Companies

Canadian payroll companies with other businesses or “associated” companies are more likely to attract additional attention. Businesses with multiple companies can enjoy lower tax rates on taxable active business income due to small business deductions. But this section can get complex fast.

Ensure clear ownership lines and defined majority shares. Increasing the number of shareholders within multiple groups owned by the same people can get sticky. If you are debating moving people around within your organizations, consider using an accountant to assist and keep an accurate record of changes.

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

Topics: Payroll Processing

How Canada Payroll Service Providers Can Grow Your Business

Posted by Stacey Duggan

|

Dec 27, 2017 9:00:00 AM

How-Canada-Payroll-Service-Providers-Can-Grow-Your-Business---compressor.jpgGrowing a business takes a lot of time, energy, and money. Every business owner is seeking to expand sales and make their business better than the year before. Growth is imperative for a business. 

Canada payroll service providers can help you grow your business. With their help, you’ll be that much closer to success.

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

Saving You Time

As the saying goes, time is money. For a business owner, this is even truer. 

Processing payroll on your own can be time consuming—you could be wasting time that could otherwise be better spent on other core business tasks. That time could be used to put plans into place or to role out changes to help your business grow, but you can’t do any of that because you’re working on payroll. 

When you hire Canada payroll service providers, you’re able to hand off the payroll management to them. In return, you can get back your valuable time, so you can focus on growing your business. Lose some of your stress and hire a payroll services provider.

Better Technology

Hiring Canada payroll service providers means you automatically update your technology. A payroll service provider always invests in top-of-the-line software. When you hire such a company, you can take advantage of this benefit.

Having access to better technology can help your business grow because everything is now processed faster and more efficiently. Employees have fewer problems with their payroll because everything is on time and on schedule. Using current technology can show investors, employees, and others that your business is organized and running smoothly.

People are more likely to be interested in a company that has its internal processes sorted out. A business is only as a good as its inner workings.

Eliminating Administrative Hold-Ups

Administrative work can hinder your business growth. If you’re not good with the details and the paperwork, your whole business can fall apart.

When looking to grow your business, it can be hard to make any real progress if your internal systems and processes are a mess. You lose time sorting them out or trying to organize them. But you’re also stuck because it’s hard to grow a business when you’re not sure who is getting paid what, who’s working when, who needs benefits, who’s left the company, etc. Your internal systems and processes should function like a well-oiled machine; when they don’t, it hinders your business growth because nothing can get done.

Hiring Canada payroll service providers to help clean up some of your backend processes gives you a better understanding of the state of your business. With that knowledge, you’re in a better position to make decisions about your company.

Canada payroll services providers can grow your business by helping you save time, aiding you with administrative hold-ups and hang-ups, and giving you access to newer and better technology.

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

Topics: Payroll Processing

Wondering How to Pay International Employees? Follow These 5 Steps

Posted by Stacey Duggan

|

Dec 13, 2017 9:00:00 AM

Wondering How to Pay International Employees Follow These 5 Steps--.jpgIf your business has gone international, it’s time to figure out how you’re going to pay your staff in other countries. Even if you’ve expanded from the US to Canada, there’s a number of steps you must take to ensure your business runs smoothly, your employees are paid on time, and it’s all in compliance with international regulations.

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

In terms of paying international staff members, knowing where to start can be tricky. If you’re wondering how to pay international employees, here are some of the steps you must follow.

1. Register Your Business in Both Countries

Depending on where your business has expanded, it’s an essential first step to register your business in both countries. This is the easiest way to create a smooth transition and ensure your employees are being paid properly.

Even if you’re a Canadian business that’s moved South, it’s still important for you to register your business in both countries. Regardless of whether it’s a big expansion or a small one, it’s a simple first step that will create benefits down the road. Plus, for the most part, registering your business in another country is as easy as registering it in your own.

2. Do Some Research

Before you even think about how to pay international employees, you must research the country’s rules and nuances surrounding payroll. For instances, in some countries, it’s expected that employees be paid monthly rather than bi-weekly. In others, overtime pay is rare or restricted by law.

It’s always best to do research or consult experts before you jump into hiring and paying an international employee.

3. Consider Exchange Rates

If you’re planning a trip overseas, you’re definitely going to consider exchange rates. The same thing applies when you’re hiring and paying an international employee.

As you learn how to pay international employees, having a clear outlook of exchange rates is crucial. It would be wise to have an understanding of your budget and how much you can spend on a new employee, and then factor exchange rates into the equation.

As exchange rates begin to fluctuate, you may find yourself going over or under budget due to an international hire. One of the easiest ways around this is paying your international employees in your own currency. So if you’re an American business that’s hired an employee in Canada, paying them US dollars can reduce complications, as long as you’ve considered the policies and rules that are involved.

4. Classify Them Properly

If you want to avoid trouble when hiring an international employee, do the research and make sure they’re classified properly. It might be easier to claim all international employees are independent contractors so you can just cut a cheque and avoid payroll and tax legislature, but if you do so, you run the risk of having the CRA, the IRS, or a dozen other international organizations penalize you.

Just as you would with a seasonal employee, double check which employee classification regulations you must abide by in terms of paying international workers properly.

In the long run, when you don’t run into trouble, you’ll be glad you took the extra time to classify them properly.

5. Get Professional Help

While it might sound easy, knowing how to pay an international employee is difficult. With varying laws and fluctuating exchange rates, managing payroll can become quite the burden.

To make the process easier and to give you peace of mind, consider reaching out to a payroll service provider. When you outsource payroll, you can rest easy knowing your employees are being paid efficiently and within the laws of the country you’ve expanded to.

What US Companies Need to Know about Paying Employees in Canada

Topics: Business Expansion

How Is Your Payroll Affected by Employing a Canadian?

Posted by Stacey Duggan

|

Nov 22, 2017 9:00:00 AM

How Is Your Payroll Affected by Employing a Canadian--.jpgDo you operate a branch office in Canada? Are you thinking about opening a Canadian subsidiary? Maybe you just finished acquiring a Canadian firm. Any of these situations could leave you wondering, “How does employing a Canadian affect my payroll?” 

It’s a good question to ask! Preparing payroll in Canada isn’t necessarily hard, but it is different. A nuanced understanding will help you avoid mistakes.

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

Two Levels of Government

Employment standards and taxation are handled at two levels of government in Canada. Both the federal and provincial governments are involved in regulating how payroll is conducted. 

Federal employment standards only apply to federal employees, who make up about ten percent of the workforce. The other 90 percent of Canadian employees are covered by provincial legislation. 

Provincial legislation covers topics like vacation pay, minimum wage, and shift lengths. Federal legislation is more important when it comes to social programs such as the Canadian Pension Plan and Employment Insurance.

Where Do You Operate?

Different provinces have different legislation pertaining to payroll, so you first need to figure out what legislation applies to your operations. You’re employing a Canadian, but where do they work? You’ll need different calculations if they work in Montreal than if they work in Saskatoon. 

Once you’ve determined the legislation

x cvoverning your operations, you can begin calculating payroll.

What You Need to Consider

In all provinces and territories, businesses employing a Canadian will need to consider calculations for CPP and EI. You’ll also need to calculate and set aside federal income tax for your employees as well.

Next, you’ll turn your attention to provincial withholdings. Most provinces also assess income tax. Income tax brackets range from as little as four percent for the lowest earners in Nunavut to 21 percent for high earners in Nova Scotia!

The provinces also lay down the law when it comes to vacation pay, leaves of absence, parental leaves, and other types of paid and unpaid leaves.

The federal government also regulates what is considered a “taxable benefit.” This definition is shifting, so be sure to check. Employers commonly misunderstand what is a taxable benefit and what’s not. Avoid any trouble by double-checking.

The Role of the CRA

The Canada Revenue Agency (CRA) is the governing body for almost all tax- and payroll-related issues in Canada. You’ll submit your tax return to the CRA for both provincial and federal taxes and calculations.

The CRA assesses your return and determines if it’s accurate. It’ll also assess any penalties if you’ve submitted an erroneous return. It also has the power to audit your business operations in Canada.

The CRA offers many tools for employers to avoid tax penalties related to payroll. Not only do they explain the payroll tax regulations in Canada, they also provide tools such as calculators designed to help you calculate your return correctly.

Getting Help

If you need help with payroll because you’re employing a Canadian, don’t worry. There are many free tools designed to help you calculate your withholdings. The CRA itself is a good resource, as already mentioned.

Other resources exist. A Canadian payroll service provider may be your best bet. Some offer free resources to help you understand how employing a Canadian could affect your payroll. You could also team up with them to ensure payroll is done right.

Getting Things Right

If you’re employing a Canadian, you’ve taken the first major step by asking how this affects your payroll. The next step is making sure you use this knowledge to good effect. Discover more about your obligations as an employer.

If you’re still having trouble with payroll calculations, consider employing a Canadian payroll services provider. They know the ins and outs of payroll in Canada, and they’d be more than happy to help.

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

Topics: Business Expansion

Top 6 Resources For Understanding Canadian Payroll Tax Regulations

Posted by Stacey Duggan

|

Nov 3, 2017 9:00:00 AM

Top 6 Resources For Understanding Canadian Payroll Tax Regulations--.jpgTo the casual observer, Canadian payroll tax regulations may not seem all that complicated. There’s more than meets the eye, however, as all good employers are aware. Understanding Canadian payroll tax regulations can be a bit tricky. 

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

Fortunately, there are many resources to help. These are the top six resources you need in your corner if you want to understand the Canadian regulations around payroll tax.

1. The Canadian Revenue Agency

The Canada Revenue Agency (CRA) is the number-one resource for understanding Canadian payroll tax regulations. The CRA is the body responsible for administering the regulations. 

The CRA provides a number of helpful resources through its website, including different aspects of payroll tax regulations, such as penalties associated with payroll.

2. The Canadian Payroll Association

The Canadian Payroll Association (CPA) is an industry association for those involved in providing payroll in Canada. One of its primary goals is payroll excellence and leadership through education. As a result, the CPA provides plenty of educational materials, publications, and other resources for those trying to understand Canadian payroll tax regulations. 

Members of the CPA can also attend training seminars and other educational events. If joining the CPA isn’t high up on your to-do list, you can still get access to free resources, such as payroll guidelines and information about relevant legislation online.

3. Your Payroll Provider

If you’ve contracted payroll services in Canada, your provider can be another great source of information for understanding Canadian payroll tax regulations. Your provider’s team will have the expertise and knowledge to help you not only understand but fully comply with payroll expectations.

If you haven’t signed up with a Canadian payroll provider just yet, you can still look to these providers as great sources of information. Many offer free resources, including informational blog posts and whitepapers.

4. Canada Business Network

Another Government of Canada resource, the Canada Business Network provides resources on many aspects of operating a business in Canada. Topics include hiring, employment legislation, taxes, and yes, payroll.

5. Provincial Regulations and Legislation

Understanding Canadian payroll tax regulations means you should also look at provincial regulations and legislation. Different provinces administer taxes differently. For example, the provincial rules around calculating and paying vacation time are different in Quebec than the rest of Canada.

Be sure to visit provincial resources pertaining to payroll in the province your business operates in. If you’re not sure where to look, your payroll provider may be able to help you.

6. The Legal Field

A law firm or lawyer specializing in payroll and corporate taxes may also be able to help you better understand Canadian payroll tax regulations. Of course, they’re not going to be able to tell you much your payroll provider doesn’t already know.

Individual pieces of legislation can also be enlightening for understanding Canadian payroll tax regulations, as can court cases. Legislation and court cases are freely available for your review. You may need some help deciphering what these documents mean. Your payroll provider or a legal consultant would be more than happy to help.

Information You Trust

Since Canadian payroll tax regulations have legal implications about how you operate your business, you should always get your information from trustworthy sources, such as the CRA or your payroll provider.

Since Canadian payroll regulations and tax tables are always changing, you should keep up to date with your knowledge too. Be sure the payroll provider you’re working with is also committed to keeping their understanding of Canadian payroll tax regulations up to date.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Processing

What You Need to Know about the Outsourcing of Employees

Posted by Stacey Duggan

|

Oct 23, 2017 9:00:00 AM

What You Need to Know about the Outsourcing of Employees--.jpgOutsourcing is a hot topic in business circles today. Most often, discussion centres on outsourcing certain processes or tasks, such as payroll or customer service functions. Accounting and other human resources functions are often considered for outsourcing as well. 

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

One trend in outsourcing right now is actually the outsourcing of employees. It’s a popular option for many businesses around the world. Here’s what you need to know about employee outsourcing.

What Is It?

The terminology used for this particular type of outsourcing might seem a little baffling at first. After all, the difference between “outsourced” and “in-house” hinges on the idea of employees: Employees perform internal functions for the company in an in-house department, while in an outsourcing situation, there are no employees. How can you outsource employees if employees are, by definition, in-house? 

The outsourcing of employees is an HR solution more businesses are opting for. What happens in this situation is a service provider, sometimes called a Professional Employer Organization (PEO), looks after all or most of the human resources tasks relating to employees for a company. 

In this situation, the PEO looks after the hiring, firing, and training of employees for the client company. The PEO may even look after the paperwork, such as records of employment and payroll. It may also provide benefits and worker compensation for the employees.

A Joint Responsibility

The idea of “outsourcing” employees first cropped up in the 1970s. Employee leasing became very popular in the 1970s and 1980s, but the system was rife with abuse. In the 1990s, PEOs began to replace problematic employee leasing situations. 

One of the key differences is the PEO and the client company share responsibility in an employee outsourcing situation. They become, in effect, joint employers. While the PEO may handle most of the HR functions related to the worker, the client company still bears some responsibility for day-to-day operations and employee safety.

A Helping Hand

Many businesses can choose to outsource just a small number of the services a PEO can take care of. For example, your business might outsource payroll and hiring functions, although you may send these tasks to different firms. You might also opt to outsource employee training. You might send benefits and compensation work to another third party.

A PEO is different. This provider takes all of the above services and combines them to deliver a seamlessly integrated service. Your employees will be hired, trained, paid, appraised, and even fired by the PEO, depending on what services you contract.

Essentially, a PEO is an employee management system for your business! The organization can work with your internal HR department or its team can become your HR experts. Depending on the size and needs of your business, a PEO can adapt to your specific situation to provide a customized solution for you.

Good Business Sense

Why is the outsourcing of employees a good idea?

Once you understand what the term means, it’s easier to see why the outsourcing of employees is a good idea. For the most part, you’re likely outsourcing most of the functions the PEO would provide anyway. Instead of sending payroll to this firm and assigning hiring responsibilities to another, you’re simply consolidating all of your HR functions with one company that can do it all.

This is good business sense. First, there’s the rule of quantity: If you purchase more services, you’ll likely get a better rate for each service. There’s also the issue of integration. If you have several firms providing different, yet related, services, you’re likely going to run into issues. Perhaps payroll keeps records differently than the recruitment firm you’re working with, leading to trouble reconciling the books about compensation.

The outsourcing of employees helps you streamline your operations, reducing time and saving money. It’s just good business sense!

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

Topics: Professional Employer Organization

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