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How US Companies Legally Pay their Canadian Employees

Posted by Stacey Duggan


Feb 28, 2014 9:00:00 AM

How US Companies Legally Pay their Canadian EmployeesGiven our cultural similarities, many US businesses assume that all they have to do to pay Canadian employees is slap some international postage on a check. Once you start looking into the matter, you’ll quickly realize that there are a lot of legal and administrative hurdles you have to overcome to pay Canadian employees. These hurdles are so problematic, that many US businesses either give up on operating in Canada, or try to find ways to “work around” the laws. Either of these options can end up costing you money, whether it’s in unrealized revenue or in fines and penalties. On the other hand, there is an easy, affordable way to pay Canadian employees without having to jump through a lot of hoops.

Employer of Record

If you need to pay Canadian employees, you can spend months jumping through hoops, or you can spend a few minutes on the telephone. An Employer of Record (EOR) is a Canadian business that offers administration and management services to foreign companies paying Canadian employees. They operate as completely legal Canadian entities, with all of the accounts and infrastructure required by law. You pay them directly and, in return, they hire and manage Canadian employees, calculate and distribute payroll, handle tax and insurance withholdings, and otherwise oversee your business processes inside of Canada.

Rapid Deployment

Expanding your business into Canada can take months. Securing a physical address, finding a bank, setting up insurance, and government inspections will all take time and cost money. Until you’ve completed each and every step to everyone’s complete satisfaction, you can’t do a single dollar’s worth of business in Canada. That’s months of time and expenses between you and your first sale.

EORs are already established and ready to start handling your business immediately. They’ve cleared all the hurdles, jumped through all the hoops, and have been successfully helping other US businesses for years. Instead of having months of red tape standing between you and a Canadian expansion, pick up the telephone and make a long distance phone call!

Better Results

One major problem faced by US businesses is their lack of experience with Canadian employment rules and payroll laws. The laws are complex and constantly changing. Without constant training and adequate experience, it’s easy to make expensive mistakes. When you’re trying to expand, those mistakes will slow down the process, costing you more time and money. After you hire Canadian employees, mistakes could close your doors and expose you to criminal penalties.

Canadian EORs are professional employers. Their primary business is the hiring, management, and payment of Canadian employees. Day in, and day out, they deal with all aspects of Canadian employment and payroll regulations. On top of their daily experience, they also train constantly to keep up with changes to the law, meet with regulators, auditors, and legislators, and even provide input on proposed changes to the legislation. At the end of the day, an EOR is far less likely to make a mistake that will end up costing you time and money.

Expand Quickly, and Legally, with a Canadian EOR

A Canadian EOR, like The Payroll Edge, can provide all of the services you need to get your expansion up and running quickly. And, unlike the do-it-yourself route, you won’t have to deal with mistakes, misunderstandings, and red tape along the way. Why reinvent the wheel, when The Payroll Edge can have you rolling smoothly in no time?

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

Topics: Canadian Payroll, Employer of Record, U.S. Companies operating in Canada

Stacey Duggan

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