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Use Employer of Record Services for International Expansion

Posted by Corinne Camara

|

Jun 8, 2018 9:00:00 AM

You’re constantly looking Use-Employer-of-Record-Services-for-International-Expansion-compressorfor new ways to grow and expand your business. Perhaps you’ve considered reaching out to a new demographic, or maybe you’ve added a new product or service to your line up. Maybe you’ve considered expanding to a second location in the same town, the same state, or the same country.

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Now you’re thinking even bigger. You’re going to expand your business internationally. Whether this is your first international expansion or your fifteenth, you know the process will be challenging. You’ll need to conduct careful research and learn many new rules and laws. You’ll need to work with a variety of different partners, including new vendors, new suppliers, and potentially an employer of record.

What Is an EOR?

An employer of record is a business that supplies human resources services for another business. The name comes from the fact that the EOR acts as the employer of any employees the client business has. 

The employer of record provides most of the services an employer would, and they are legally recorded as the employees’ employer. They provide payroll, administer leaves and vacation pay, remit payroll taxes to the CRA, calculate and administer benefits, and even engage in hiring and termination on behalf of the international client company.

Why Use These Services?

One question you may have is why you would need to engage an EOR or use their services. After all, if you expand internationally, you’re going to set up shop in the destination country. You have your own HR department, and you can go about hiring and terminating employees as needed. After all, you do it just fine at home.

The issue here is the difference in the legal framework. An American firm is quite used to the payroll taxes and legislation set out by the US federal government and the IRS. In Canada, the rules are different, and the Canada Revenue Agency enforces them. 

The provincial governments also legislate on employment. Ontario, for example, just revised the law regarding leaves and vacations, as well as holiday pay for statutory holidays. The province of British Columbia changed how its healthcare provisions work, meaning employers who have opted in to the provincial system of insurance now pay and administer different fees. The rules are different again in Quebec, Alberta, and Nova Scotia.

It Ensures Compliance

International companies moving into Canada for the first time often aren’t as familiar with the law as they think they are. Even if you’ve operated in Canada before, legislative changes could mean what you once knew is no longer true.

Working with a partner who delivers employer of record services helps you ensure your business operations are compliant with the legislation, no matter how new or recently changed. It also means you don’t need to worry about the subtle differences between laws in BC and Alberta. The employer of record will be attuned to those differences.

This can save you both time and money. Your HR staff’s workload will be reduced significantly, as they won’t be required to learn Canadian law inside out in order to administer payroll or ensure the questions they’re asking in an interview are legal, for example. It can also reduce errors in your payroll as well as tax remittances to the CRA, which can save you from costly penalties and audits.

Selecting an Employer of Record

It should be clear just why these services are so important for businesses hoping to undergo an international expansion. In the simplest terms, it makes it easier for you to expand.

One of the biggest challenges for business owners is selecting an employer of record. Be sure to conduct some careful research and talk to several providers. Always consider what’s best for your business and how each provider will meet your needs. The right provider is out there.

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Topics: Business Expansion

3 Obstacles That Derail American Business Expansion into Canada

Posted by Stacey Duggan

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Jun 6, 2018 9:00:00 AM

3-Obstacles-That-Derail-American-Business-Expansion-into-Canada-compressorExpanding a business into Canada is an exciting move for an American business. Canada is often one of the first markets American businesses expand to. There are a number of good reasons for this. One is that Canada often represents a ready and waiting market. Other factors, such as shipping logistics, are also simplified between the US and Canada versus other markets.

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There are still challenges for American business expansion into Canada. As with any international expansion, you’ll need to do some careful research and proceed with caution. Educating yourself and your staff about the most common obstacles to American business expansion into Canada can help you achieve success more readily when you are ready to expand.

1. Underestimating the Cost of Doing Business

Perhaps the most common stumbling block for American business expansion is the cost of doing business in Canada. Quite simply put, the cost of doing business is higher in Canada. There are a number of factors that play into this. The first is often the exchange. Canadian prices are usually higher. Employment legislation may play into this, particularly where minimum wages are concerned. Ontario and Alberta are both set to have $15 per hour minimum wages in 2019. 

As the cost of paying employees increases, so too does the cost of purchasing goods. There are also other considerations. Canada is an enormous country geographically, but its population is concentrated on the US border and sparse elsewhere. The population is also much smaller than the US. The entire Canadian population is about equivalent to the state of California. As a result, it takes more money to get goods to scattered population centres. 

Taxes can also be higher, particularly employment and payroll taxes, which are used to support Canada’s social welfare programs such as Medicare, the Canada Pension Plan, and Employment Insurance. 

Many American firms underestimate the costs of doing business in Canada and soon find themselves exceeding their budgets on every item.

2. Expanding Too Quickly

Target has become something of a case study about how not to expand an American business into Canada. Target purchased many locations from the defunct Canadian discount brand Zellers. For years, many Canadians had been lobbying Target to come to Canada. Many Canadians made pilgrimages to Target locations in the US whenever they visited or if they lived close to the border. 

Target opened with much fanfare but couldn’t live up to expectations. Logistics made it difficult to get the products Canadians were used to seeing in US stores, and prices were much higher. Target ended up closing up shop quite quickly. 

Target made one other mistake. It opened about 100 stores across Canada in just under a year. That strained the budget and caused huge issues with shipping and inventory logistics. Other retailers, such as Lowe’s and Crate and Barrel, have expanded much more slowly and have been met with more success. 

American business expansion should follow the model of retailers like Crate and Barrel and Lowe’s. Slow and steady will win the race when it comes to business expansion in Canada.

3. Employment Legislation

Another obstacle for American business expansion into Canada is employment legislation. Not knowing the law around hiring, employing, paying, and terminating employees can cause a good deal of headaches for American firms. Even at home, employment legislation can cause trouble for your HR staff.

In Canada, employment legislation varies among provinces and encompasses everything from what kinds of questions you can ask in an interview to how much notice you need to give an employee when you terminate their employment.

If you want to avoid these stumbling blocks during your business expansion into Canada, consider getting help from an employer of record. They can assist you in making better decisions for your business.

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Is Business Expansion Right for You? 5 Factors to Consider

Posted by Corinne Camara

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May 21, 2018 9:00:00 AM

Is_Business_Expansion_Right_for_You_5_Factors_to_ConsiderYou likely spend a good deal of time wondering how you can spur business growth or keep the momentum you already have.

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One way to keep growing is to look into expansion. You may consider new locations around your home country. Maybe you franchise into the next town or move operations into a second or third state. Business expansion can also be international in scope.

An international expansion is obviously a little more complex than setting up shop in the next town over. Could it be the right option for your business? It just might be. If you’re wondering, consider these five factors.


1. International Markets

The first question to ask yourself when considering a business expansion of any kind is whether or not a market exists in the location you’d be expanding to. A marijuana company, for example, may not want to expand into a US state where cannabis isn’t yet legal. The market for legal operations doesn’t exist in this location. It may eventually, so the company could keep an eye on changing market conditions.

American companies often discover waiting markets abroad for their products and services. Canada, for example, is usually a location with a ready market for American firms. The availability of the market will depend on many different factors, including culture, language, law, and more.


2. Competition

If the market exists in the location you want to expand to, you may find you already have some competition. American companies will compete with other American firms in the US, but when they move north of the border into Canada, they may find themselves in competition with both American companies and native Canadian companies.

Competition isn’t necessarily a bad thing, but it can make it more difficult to expand. There may be an already-existing market, but if the market is already saturated with other competitors, you’ll have a difficult time convincing prospective clients to switch over.


3. Positioning

The key to overcoming resistance in a market or competition is your positioning. When you undergo a business expansion, you need to think about why your business should expand to these new markets. What unique services or products does your company bring to the market?

You may, for example, offer superior customer service. You may have an innovative product or more services than your competitions. Maybe your pricing is better. Whatever it is, you’ll need to think about your relative position in the market in order to successfully expand the business.


4. Legal Frameworks

As mentioned above, a marijuana company wouldn’t be wise to consider a business expansion into places where its product isn’t legal. Even if your product or service is completely legal, you’ll want to be sure you look at the legal framework as you consider your business expansion.

What steps will you need to take to operate in the new market? Even different American states have different regulations when it comes to employment, payroll, and more. The same is true of other countries. In Canada, for example, you’ll find different sets of employment laws in all ten provinces and the three territories.

Be sure to consider how your choice of structure will affect your operations. If you’re going to set up as a subsidiary company, you’ll have different requirements than if you structure the business as a branch office in a new country. Different countries also have different options for business structures.


5. A Helping Hand

How will you manage the business expansion? Think about who you’ll call on for assistance when you’re expanding into the new market and when you’re managing employees and payroll. An entity such as an employer of record can help you and make the business expansion that much easier.

A business expansion could be right for your business, although it has many different aspects you need to consider. If conditions are favourable, an expansion could very well be the right move.


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3 Strategies for Human Resources Management Success When Expanding into Canada

Posted by Shannon Dowdall

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May 18, 2018 9:00:00 AM

3-Strategies-for-Human-Resources-Management-Success-When-Expanding-into-Canada-compressorExpanding your business operations into Canada is a big move. Whether it’s your very first expansion or one of several you’ve completed, the Canadian market will present you with unique challenges. This is especially true when it comes to your human resources management. 

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While you may think HR in Canada will be relatively straightforward and simple, there is more nuance to it. HR in Canada won’t be exactly like it is in the United States or the United Kingdom or wherever else you may happen to operate. 

Careful management of your human resources as you expand into Canada will help you achieve success. Try one or more of these strategies to help you make the transition easier.

1. Adopt the Right Technology

One of the biggest challenges you may face in your HR management is technology. While technology can be a huge boon for businesses, it can also be the bane of the HR department’s existence. The wrong technology can make it more difficult to complete virtually any HR task, whether it’s hiring a new employee or administering payroll

The right technology can simplify your human resources management exponentially. This becomes even more true when you consider operating in different countries. A good human resource platform will allow you to collect the necessary data, create centralized profiles, and more easily administer HR from anywhere in the world.

2. Learn the Law (and Monitor Compliance)

Another challenge facing your human resources management when expanding into Canada is the legal framework. Each province in Canada has its own employment and human rights laws, for example. You and your HR staff should make an effort to become familiar with these laws. 

While it’s not possible for you to become an expert in Ontario or BC human rights legislation overnight, some familiarity can help you make better choices when it comes to human resources management. It can also make it easier to monitor compliance within the business. You may be aware you need to keep an eye on a particular law or you may become aware of the fact you can’t collect particular kinds of employee data from your Canadian employees. 

Monitoring compliance is important for success when expanding your business into Canada. If you don’t monitor compliance, you run the risk of making mistakes. You could end up being penalized, audited, or even charged. Keep an eye on compliance and make adjustments to your policies as necessary.

3. Partner with a Canadian EOR

An employer of record will help you on your road to human resources management success as you expand your business into Canada. In fact, that’s what they’re there for. The EOR helps you administer and monitor all aspects of your human resources operations in Canada. They’ll hire employees, terminate them, administer benefits and payroll, and even monitor compliance on your behalf.

Working with an EOR is one of the easiest ways to ensure human resources management success in Canada. After all, as familiar as you may be with Canadian law, you may not have the expertise you need to truly ensure compliance. You also may not have the resources. Your HR staff may already feel like they’re being stretched thin, and asking them to look after your Canadian employees is just adding to the pile.

The EOR provides the expertise you need and they shift the burden of HR management from your own HR department to theirs. They’ll be able to manage tasks more seamlessly. They may also have the advantage of being located in Canada, which can further ease issues.

If you use all three of these strategies together, you’re almost guaranteed to experience human resources management success as you expand into Canada. Consider adopting at least one of them to increase your chances of success.

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Topics: Business Expansion

5 Reasons to Expand Your Business into Canada

Posted by Anna Mastrandrea

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May 16, 2018 9:00:00 AM

5-Reasons-to-Expand-Your-Business-into-Canada-compressorYour business is always looking for new ways to grow. You may have been growing nationally for some time now, but you know moving outside of your borders could entail greater complexity. 

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If you’re looking to continue growing, however, international growth could be the answer. If this is the path you want to take, you may decide to start with Canada. Canada is a great place for businesses to choose as their first international expansion project. Why? There are quite a few reasons to expand your business into Canada. Consider these five.

1. A Waiting Market

The best reason to expand a business into Canada is that you already have a waiting market. Canada’s economy is import-heavy, which means Canadians are used to bringing in products from other places. Canadians also travel quite frequently, most often to the US, and so they may be highly aware of brands and products they can only find abroad. 

Many Canadians may have already encountered your brand, and they’d be quite excited to hear you were coming to Canada. While you must manage your expansion carefully, brand awareness is one of the best reasons to expand your business into Canada.

2. A Common Language

English is the lingua franca of the modern world, but it isn’t everyone’s native tongue. Many Canadians do speak English as a first language, however, and many more speak it fluently. If your business is based in the United States, the UK, Australia, or South Africa, you share a common language with Canadians. 

The same thing can also be said of France and other French-speaking countries. While the majority of Canada is English-speaking, there are pockets of French-speaking communities all across the country. Canada is officially bilingual, which means you may share a common language with Canadians in Quebec, Manitoba, and New Brunswick. 

The use of a common language can ease expansion issues as you can communicate your needs more readily. It can also help you prepare your product or service for the market more easily.

3. Geographic Proximity

This reason is certainly aimed at businesses located in the US.

Canada and the US are neighbours, and they share one of the world’s longest land borders. The proximity of many US and Canadian cities can simplify communication and shipping between your US and Canadian operations.

4. Similar Cultures

Again, this is predominately aimed at American firms, but UK companies may find they have at least something in common with Anglophone Canada in particular. American and Canadian cultures are distinct, but they share many features. For example, most Canadians are exposed to many American pop songs, TV shows, and movies. Consumers also have similar spending habits.

This makes it easy for American firms to adapt to Canadian culture and expectations. Companies based in other countries may see more disparity between their own culture and Canadian culture, even if they’re English-speaking.

5. A Similar Legal System

Both Americans and British companies will find a similar legal system in Canada. After all, Canada’s legal system is based on the British system of common law, although Quebec has adopted the French tradition of civil law.

The American system is also rooted in the British tradition. Canadian and American law evolved side by side, so the two systems also share some distinct similarities. The similar legal system is one of the best reasons to expand your business into Canada since the similarities ease the complexities of expansion, such as paying workers.

If you’ve been considering international growth and expansion, consider these five reasons to expand your business into Canada. It could be the best option for your business.

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How to Ensure Compliance When Expanding into Canada

Posted by Stacey Duggan

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May 14, 2018 9:00:00 AM

How-to-Ensure-Compliance-When-Expanding-into-Canada-compressorYour business is expanding into Canada. Perhaps this is the reality you’re currently facing or maybe it’s a possibility on the horizon. You may even be in the middle of the expansion or you might already be operating in Canada. 

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In any one of these situations, you’ll want to know more about ensuring compliance. Here are a few ways you can be sure you’re maintaining compliance when expanding into Canada.

Familiarize Yourself with the Legislature

The first thing to do when expanding into Canada is to take a look at the legal framework. Try to familiarize yourself with the rules. You’ll probably take some time to consider at least a few aspects of your Canadian operations. You might want to think about your business structure and tax implications of that structure, for example. 

Being familiar with the rules will help you make better decisions when you’re expanding into Canada. Familiarizing yourself with the rules now will also help you later on. It’s also useful, even if you engage the help of experts, since you’ll be able to understand what they’re doing.

Seek Legal Advice

The moment you decided you were expanding into Canada, you probably began looking for legal advice. While you and your staff members are all talented, you’re also busy. You also recognize you don’t have the expertise and you may not understand all the nuances of Canadian law. 

The number-one reason companies fail to maintain compliance is that they don’t fully understand what’s required of them. They may understand the basics, but they miss a key point or a particular corollary. 

Seeking legal advice can help ensure compliance when you expand your business into Canada. The legal expert can spot issues in your plan and guide you on revisions to make sure you stay on the right side of the law.

Partner with an Employer of Record

One of the easiest ways to maintain compliance when you’re expanding into Canada is to engage a Canadian employer of record (EOR) for your business. These experts will assist you with many aspects of your HR operations in Canada. They’ll administer payroll, assist with hiring and terminating employees, and deal with benefits as well.

Since they operate in Canada, they’re more familiar with compliance demands and regulations than you may be. They have a better understanding of the ins and outs of the law, and they’ll be able to guide you through HR compliance and other activities.

Most business owners and HR managers make mistakes not because they don’t understand or because they don’t care. It’s because they’re unaware of a certain law. Working with an EOR helps you avoid the most common kinds of compliance errors.

Monitor Compliance

You likely monitor compliance as part of your day-to-day activities in your home country. If you have other locations, you likely monitor compliance there as well. Things should be no different when you’re expanding into Canada. Be sure to monitor compliance for your Canadian operations as well.

Monitoring compliance is probably the best way to ensure compliance. An employer of record can help you here as well. They monitor their own compliance for you and their other clients as well. If a change occurs, they’ll be the first to know. They’ll also adjust their operations to ensure continued compliance.

Maintaining compliance doesn’t need to be difficult. It can be time-consuming, however, and it can become complex if you’re unfamiliar with the legal requirements in a new location. Familiarize yourself with the law and work with knowledgeable partners to ensure your compliance is up to date when you’re expanding into Canada.

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4 Reasons to Consider Expanding into Canada

Posted by Ray Gonder

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May 9, 2018 9:00:00 AM

4-Reasons-to-Consider-Expanding-into-Canada-compressorYou’re always looking for new ways to grow your business. Sometimes, the next step seems quite logical. In other cases, you may spend more time wondering about your next move. 

Whether you’ve hesitated about expanding into the Canadian market or the idea is totally new to your business, there are many good reasons to consider this strategic business move. Here are just a few.

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1. A Ready-Made Market

Perhaps the best reason to move your business into Canada is there’s a market and demand for your products. This is often true for American retail companies, but many others in varied industries and based in other countries find this to be the case for their businesses as well. 

Canadians often purchase from abroad. Canada actually has a trade deficit, meaning the country imports more than it exports. Canadians may be purchasing your product or service anyway. Getting on the ground in Canada may help you provide for your existing Canadian customers. You could offer lower prices without taxes and duties or tariffs imposed on your products. Services may be easier to provide. 

In some cases, you may not have Canadian customers yet, but there may be interest from the Canadian market. Take a survey and see how many people would be interested if your business were to expand into Canada. The numbers may surprise you.

2. Tax Incentives

Another reason you may consider expanding into Canada is the tax arrangements. Operating outside of the country can be costly and less efficient from a tax perspective. You could save money and streamline your tax operations by setting up shop in Canada.

The tax advantages of expanding into Canada depend largely on the business structure you select for your business. The structure you select will depend on many different factors, including what industries you want to operate in, how you wish to handle Canadian income and losses, and more. 

Sometimes, separating Canadian revenue or moving operations to Canada can reduce the taxes you pay in other jurisdictions. This is particularly true for American companies. With a major free-trade deal with the European Union in play, other companies may soon be able to realize similar advantages.

3. Other Financial Incentives

Tariffs, taxes, and duties can raise the cost of doing business in Canada. Setting up shop in Canada can help you take advantage of lower taxes or tariffs. You may be able to eliminate them altogether. Take a look at various free-trade deals and other trade provisions in Canadian law to see what advantages you can realize.

You may also be able to take advantage of other financial incentives. Canadian businesses and governments are often looking for foreign investments, so they may have programs set up to assist you with expanding into Canada.

Finally, you may be able to save some labour costs by moving into Canada. The American dollar, for example, is worth more in Canada. Wages may look higher, but they may not be in practice.

4. Investment Opportunities

You may not be thinking about operating in Canada the way you operate in the US or another country. Instead, you may be looking at expanding into Canada as an investment opportunity. This is how many oil companies operate in Alberta’s oil sands.

Of course, you may decide to expand your business into Canada and look at investment opportunities at the same time. Canada does have regulations about foreign investment, so having a Canadian operation can help you invest more efficiently and effectively.

There are many great reasons to consider expanding your business into Canada, and these are just a handful of them. Talk to the experts and discover why expanding your business into Canada might just be the right move for your business.

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What You Risk by Failing to Maintain Payroll Compliance in Canada

Posted by Corinne Camara

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May 7, 2018 9:00:00 AM

What-You-Risk-by-Failing-to-Maintain-Payroll-Compliance-in-Canada-compressorYou’re no doubt aware payroll compliance is important in your business operations. Whether you’re an American firm dealing with the Internal Revenue Service (IRS) or operating in another country and dealing with their tax collector, you’ve probably read the rules and heard stories about companies that didn’t follow the letter of the law. You may even have had run-ins with these agencies yourself. 

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Maintaining compliance in payroll can be time-consuming and sometimes complex, even in your home country where you’re relatively familiar with the laws. It can be difficult to keep up with the changing regulatory framework. What happens when you fail to maintain payroll compliance in another country where you’ve expanded your business operations? 

Many American firms and other foreign companies operating in Canada have quite a bit on the line when it comes to maintaining payroll compliance. Here’s what’s at stake.

Penalties from the CRA

The Canada Revenue Agency is the Canadian version of the IRS. Although the IRS is more infamous for levying harsh penalties, in recent years, the CRA has toughened up many of its rules. It now enforces a much harsher penalty system than in the past. 

If you fail to maintain payroll compliance in Canada, there’s a good chance you’ll be assessed penalties by the CRA. These can range from minimal, such a few hundred dollars, to thousands of dollars. The penalty will depend on the infraction, the scope of the problem, and even the size of the company. 

The best way to avoid penalties is to maintain compliance in your Canadian payroll activities.

Tax Inefficiency for the Parent Company

Failing to maintain compliance in your Canadian payroll activities can also come back onto the parent company operating in a foreign country. This depends partly on how your business is structured, but you could end up seeing tax inefficiencies in the parent company. Sometimes, this isn’t as problematic as it sounds, but it can lead to issues such as double-taxation for American firms. In this case, you could end up paying out more than you thought you might have to. Other problems can be more severe. 

You were careful in selecting the business structure you thought would most benefit your company, but maintaining compliance is absolutely necessary to ensure that selection pays off. By being compliant, you can be sure your business will realize the advantages of the structure you chose.

A CRA Audit

If you fail to maintain compliance in your Canadian payroll activities, the CRA may ask you to open your books for their inspection. An audit is never an exercise your business wants to undergo. They’re expensive, cause additional work for your staff, and can result in penalties or worse. 

Avoiding an audit starts by staying compliant with the Canadian rules and regulations about payroll.

Criminal Persecution

The CRA can actually prosecute companies, shareholders, and business owners for failure to maintain compliance. While you’ll likely be assessed penalties and undergo an audit before it ever gets to this stage, it’s something you should keep in mind.

A failure to keep proper records, among a few other payroll issues, is a criminal offence in Canada. The big concern here is fraud. If you fail to maintain payroll compliance, the CRA could charge you with fraud. While most cases of fraud are intentionally carried out, you could be engaged in fraudulent activities that put you under criminal investigation.

There’s a lot at stake when it comes to maintaining payroll compliance in Canada. Like almost anywhere else, you could be subject to penalties, audits, or even criminal charges for failing to maintain compliance in payroll. Don’t risk it by doing everything on your own. You can bolster your compliance by working with the experts.

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4 Challenges You’ll Face When Expanding Business into Canada

Posted by Stacey Duggan

|

May 2, 2018 9:00:00 AM

4-Challenges-Youll-Face-When-Expanding-Business-into-Canada-compressorExpanding a business into Canada is a big move. Whether it’s your first expansion or the latest in a series, beginning business operations in Canada has many advantages. It also comes with its fair share of challenges, many of which you’ll need to consider carefully. 

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

What kinds of challenges can you expect when expanding business into Canada? Here are a few of the most common ones American businesses face north of the border.

1. Choosing the Right Structure

The first challenge you’ll face when expanding business into Canada happens before you’ve even opened your doors. You’ll need to choose a business structure for your operations. 

This is an important consideration as your business structure has many impacts on the business itself. The most prominent of these are tax considerations. A branch office is taxed quite differently than a subsidiary, and unlimited liability corporations (ULCs) are subject to yet another tax structure. 

Your business structure has other impacts as well. Structure can impact everything from how you handle losses to who you place on your board of directors. It’s important to ensure you select the right structure for your Canadian operations.

2. Learning Employment Legislation

You’re no stranger to employment legislation. After all, you and your HR staff deal with American laws about how to hire, classify, and terminate employees, among other employee-related activities. You’re also familiar with different levels of regulation. Both the federal and state governments can impose new rules and regulations. 

In Canada, there are also two levels of government looking after employment legislation. The federal level, however, only covers federal employees or about 10 percent of the workforce. The remaining 90 percent of Canadian workers are subject to provincial employment legislation. 

Employment legislation varies from province to province, and it covers everything from how an employee is to be hired and how they’re to be terminated to how to calculate their vacation time and pay them for holidays. Learning the legislation is important so you can ensure you’re compliant with the law. 

Of course, it also takes time to learn any kind of legislation in detail. While you may understand the basics, truly understanding Canadian employment legislation will take time. If you operate in more than one province, the task will become more difficult as you’ll need to learn and apply two sets of rules at the same time.

3. Administering Payroll

Canada also has different rules and regulations about payroll, a fact most companies discover when they’re expanding business into Canada. You’re familiar with needing to deduct income tax and other amounts from an employee’s paycheque, but how much and what you’ll need to deduct vary in Canada and even from province to province.

When expanding business into Canada, you’ll need to determine how you’ll compensate your employees. Then you’ll need to determine what counts as “taxable benefits” under the Canada Revenue Agency’s rules. While you likely guessed an employee’s salary is taxable income, you’ll also need to think about compensation offered through employee discounts, stock options, benefits, and even employee reimbursement programs.

The Canada Pension Plan and Employment Insurance are also considerations for your payroll withholdings. The amounts you’ll need to withhold from an employee vary with salary, up to different maximum contributions. A payroll deduction calculator can be quite useful.

4. Needing Good Advice

When expanding business into Canada, it’s almost inevitable you’ll need to ask questions at some point or another. Many HR managers and business owners find they don’t always know where to turn when it comes to their Canadian operations.

There are many excellent resources available. The CRA has some helpful guides about payroll and payroll calculators are useful tools. Government legislation is freely available, and legal advice is close at hand. A partnership with a Canadian PEO can also make expanding business into Canada much easier.

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Topics: Business Expansion

Not Sure How to Expand Your Workforce into Canada?

Posted by Stacey Duggan

|

Apr 30, 2018 9:00:00 AM

Not-Sure-How-to-Expand-Your-Workforce-into-Canada-compressorA decision to expand a business into Canada is one thing. A move to expand your workforce into Canada is quite another. While your workforce expansion may come as a logical extension of your new business operations in Canada, it may also be that you’re expanding your workforce without necessarily setting up formal business operations in Canada. 

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

How can you go about extending your workforce into Canada? There are quite a few different methods you can employ.

Apply for TN1 Visas

If you’re an American or Mexican company, you have the advantage of the North American Free Trade Agreement (NAFTA) to help you structure trade with Canada. You also have many experts already on your team. 

If you’re expanding your business operations into Canada, you may want to send some of them north of the border to oversee the expansion. You may also want to send some of the talented professionals you employ to Canada if you create a partnership with a Canadian firm or if you happen to fund a new project, such as research on new technology. 

A TN1 visa may be one good way to expand your workforce into Canada. The TN1 visa is designed to assist qualified professionals in certain fields. If you wish to send qualified experts to Canada on a short-term assignment, the TN1 visa may be the answer. You can also use the NAFTA Intra-Company Transfer program.

Hire in Canada

The most obvious way to expand your workforce in Canada is to hire Canadians to work with your company. There are at least two ways to hire people in Canada to work with you.

The first method is to hire Canadian contractors to work with your company. These people are set up as vendors, not as employees. They sell your business a product or service. There are certain tax advantages to this situation. If you need permanent, full-time staff, however, it won’t be the right solution. 

The other option you have is to hire Canadians as employees of your business. This is much simpler if you already have business operations in place in Canada, or if you’re planning to open your doors there soon. You can hire Canadians as employees of foreign firms, but the situation regarding payroll and taxation becomes somewhat more complex. 

How can you hire Canadians and expand your workforce? You can recruit them yourself, or you may wish to work with an agent on the ground in Canada. A recruiter may be a good choice.

Work with a Professional Employer Organization

What if you need to hire many people in Canada? Maybe you had one Canadian employee and no real business structure in Canada. Now, the situation has changed and you need to expand your workforce. Perhaps you’re planning a business expansion in Canada, but you’re not sure how you’re going to go about it just yet.

Working with a Canadian professional employer organization (PEO) may be the best move in both of these situations. In fact, partnering with a PEO may be the right move for anyone looking to expand their workforce in Canada for any reason.

What does a PEO do? They act as the employer of your Canadian employees. This means they handle payroll, taxation, withholdings, compliance, and much more. Since they’re familiar with Canadian legislation on all of these points, the process becomes more streamlined and simplified.

Making the move to expand your workforce into Canada can sometimes seem like a daunting task. With these tips in hand, you can make it a much simpler process. If you’re unsure of your next steps, get in touch with a Canadian PEO today. They can help you find the right solution for your expanding workforce.

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

Topics: Business Expansion

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