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How to Establish a Canadian Administrative Presence

Posted by Shannon Dowdall

|

Feb 9, 2018 9:00:00 AM

How_to_Establish_a_Canadian_Administrative_Presence-1.jpgDoes your business operate in Canada? Are you thinking about expanding into Canada? No matter which situation more accurately describes you, you’ve probably thought about how you’ll handle payroll, taxes, compliance, and more.

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For foreign businesses expanding beyond their borders into Canada, the administrative side of the business can become quite complex. You’re likely used to the processes and rules at home, but you may find the Canadian regime more than a little confusing.

It can be confusing even for Canadian-owned and operated businesses! Whether you’re growing and need some administrative guidance or you’re expanding into a new province, you may find yourself faced with administrative questions you can’t answer.

There’s an easy way to shore up your Canadian administrative presence in any of these situations: team up with a Canadian employer of record.


You Need Help

Whether you’re an American business coming north of the border or a Canadian start-up facing fierce growth, the reality is you can likely use a helping hand when it comes to managing your administrative activities, such as payroll and other HR activities.

Foreign entities may find themselves somewhat baffled by the differences in Canadian payroll rules and the complexity of the provincial legal system.

As mentioned, the solution is to team up with a Canadian employer of record (EOR). They can help you manage your administrative activities with ease and grace.

The next question on your mind is probably, “How do I find one?”


Do Your Homework

The first thing you should do is look up a few Canadian EORs. There are many out there, so you’ll want to do some careful research. Not all EORs are created equal. Some have more experience and expertise. Some will have better track records than others.

Ask for recommendations or visit reputable third parties to find some recommendations. Narrow your list of potential providers. Research what they offer and how their plans fit your needs. Finally, you’ll want to compare prices and service offerings.


Ask for a Quote

The next thing on your list is to get quotes from the EORs on your shortlist of names. While you want to compare pricing options, getting quotes also has another purpose. You can begin to evaluate each potential provider’s customer service!

If a provider doesn’t get back to you right away or they don’t seem interested, their attitude is unlikely to improve. Set high standards and you’ll be sure to find the best Canadian EOR to establish your Canadian administrative presence.


Working Together

Once you’ve decided on a provider, you can sign a contract and begin working together. This has many advantages for you as a business.

First and foremost, you get the expertise of a team of people who deal with the Canadian payroll and legislative framework every day. If you have questions, they can answer them. You don’t need to worry about the intricacies of vacation time legislation in Ontario versus Quebec. As the legal employer of your employees, the EOR will handle all these employment situations.

It will also simplify the process of remitting your payroll taxes to the Canada Revenue Agency and paying your employees. It can help you avoid audits, as you can be sure your compliance will be up to date.


Why You Need an Administrative Presence in Canada

Even with these benefits in mind, you may wonder why you need an administrative presence in Canada. After all, you have systems in place at home, and your talented staff is more than up to the task of learning about the Canadian system.

Having an administrative presence in Canada is a necessity to do business in the Great White North. And EOR can make the process a breeze, so you can worry about strategy instead of administration.


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

Topics: Business Expansion

5 Things You Need to Know about Hiring Canadians

Posted by Corinne Camara

|

Jan 29, 2018 9:00:00 AM


5_Things_You_Need_to_Know_about_Hiring_Canadians.jpgIf you’re running a business in the US and have grown enough that you’re considering expanding across the border to diversify your markets, you should know that preparation is key. While US and Canadian economies are similar in many regards, with two countries having a long history of trade with one another, there are many differences in business laws and regulations.

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These differences are most significant when hiring Canadians. To operate in Canada, you’ll need Canadian employees and these employees must be managed according to labour codes and payment laws. What’s more, each of these laws is subject to variances across the different provinces and territories. Navigating Canada’s employment standards and compliance laws has recently become even trickier as well with the passing of Ontario’s Fair Workplaces, Better Jobs Act last November.

So, what are the most vital things you need to know when hiring Canadians? Check out below for the five things that you need to know.


1. Establishing a Canadian Administrative Presence

Successfully expanding into Canada means first establishing a Canadian administrative presence. In other words, your business cannot simply open up branches in Canada and hit the ground running to hire Canadians. First, you’ll have to register your business with the government (both federally and provincially) as a legal Canadian corporation.


2. Registering Necessary Accounts for Compliant Hiring

Now that you have your infrastructure for hiring Canadians, the next step is to register accounts with all the organizations and authorities associated with compliant hiring and employment practices. You will need at least an account with the Canada Revenue Agency (CRA) for payroll and remittances, Worker’s Compensation programs to protect your employees from financial loss due to work-injuries or occupational diseases, and accounts with the Ministry of Labour to ensure Canadian compliance.


3. Affirming Business Infrastructure

You’ll need to set up your business structure for insurance, finances, and banking infrastructure. Once you have the infrastructure in place, you should have what you need to start hiring Canadian employees and handling their employment standards, payroll, and remittances.


4. Maintaining Ongoing Compliance

Your setup isn’t quite done yet, however, as you’ll need assurance that you can maintain lasting compliance with Canadian employment standards. That sounds simple at the outset, until you realize how often Canadian business laws and regulations, as well as tax and payroll laws, evolve in Canada.

The above-mentioned Fair Workplaces, Better Jobs Act is a case in point. Federally and provincially, employment laws are changing constantly in Canada and failing to comply (even if by accident) can lead to heavy fines and even prosecution in the worst instances.

Hiring in Canada for your new branches is the first significant step to becoming a foreign business of note. The next step, which is actually an ongoing process, is to continuously maintain compliance.


5. Partnering with an Employer of Record

After seeing all the steps involved in hiring Canadian employees and getting established in Canada, you might be feeling some hesitation. All these new HR duties can seem overwhelming when you’re new to the Canadian business landscape. Luckily, there is an option available that can greatly streamline your Canadian expansion process: a partnership with an Employer of Record (EOR) in Canada.

A Canadian EOR is already established in the country and can help you manage the most time-consuming of your HR tasks (like payroll and compliance). EORs have years of experience in dealing with the ins and outs of Canadian compliance.

You need to tread carefully as a US business working in Canada. For example, handling your own payroll might seem more convenient until a matter of non-compliance arises and reveals the risks. Consider partnering with an EOR and put your payroll, HR, and compliance worries to rest.


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

Topics: Business Expansion

Expanding Business into Canada? Avoid These 5 Mistakes

Posted by Karen McMullen

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Jan 19, 2018 9:00:00 AM

Expanding_Business_into_Canada_Avoid_These_5_Mistakes.jpgThe Canadian economy is a rapidly growing market that is expected to reach $1.9 trillion by 2022. In 2015, Canada overtook Russia as the 10th largest economy in the world, following behind Brazil and Italy.With the gross market expansion and its close proximity to the land of the free, many Americans are seeing the benefits of expanding business into Canada.

While the idea of expanding business into Canada seems fruitful, have you considered what this will really mean for your company? Many businesses don’t, and it can often land them in hot legal waters as they expand without fully complying with Canadians laws. Don’t be one of those companies—prepare yourself in advance and avoid making these mistakes.

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


1. Failing to Research the Canadian Market

If you don’t research the Canadian market before you begin expanding business into Canada, you’re going in blind. Canadians and American have different preferences and purchasing patterns. You should not make the mistake of assuming Canadians will respond to your brand in the same way Americans have.

Instead, make sure you’ve done your research so that your company’s service offerings can appeal to the largest number of Canadians and excel in the Canadian marketplace. Do your homework; it’ll pay off in the long run.


2. Worker Misclassification

The Canadian government is becoming stricter when it comes to investigating employee misclassification. It might seem easier to classify all workers as contractors to avoid the administration of payroll, but trying to cheat the tax system by classifying true employees as independent contractors is fraudulent. If you’re found guilty of worker misclassification, you could be fined, or worse, sentenced to time in prison.


3. Not Knowing the Difference between Federal and Provincial

Much like the US’ 52 states, Canada has 12 provinces and territories. While there are overarching federal laws that apply to the entire country, there are rules and regulations that are enforced provincially. Provincial laws that affect payroll include minimum wage, vacation pay, and holiday pay, among others.

It is important that you learn how to legally operate your company in each province where you conduct business.


4. Miscalculating Taxes

The CRA is the Canadian equivalent of the IRS. Each pay period, a certain percentage of each employee’s paycheque is withheld and goes towards EI, CPP, and applicable taxes. These deductions are based on an employee’s earnings and non-salaried payments like tips and bonuses.

If you’re expanding business into Canada, it’s essential you calculate taxes appropriately or your business can be audited and ultimately fined or and forced to close its front doors.


5. Attempting to Tackle the New Landscape Alone

There are so many ins and outs of expanding business into Canada that it may seem altogether too overwhelming. Along with running your core business and managing compliance in your own country, now you must worry about being compliant in another, one you’re completely unfamiliar with. The whole process of expansion can be exhausting.

Have you considered the option of partnering with a professional employer organization? Outsourcing your payroll and other related tasks including recruiting, benefits, workers’ comp, training, and health and safety management can make your move across the border that much easier.

Don’t waste your time learning how to master the Canadian rules and regulations surrounding payroll; trust a PEO that hasproven experts on staff. You won’t believe how much your company can benefit from the services of outsourcing to a PEO in your expansion from the land of the free to the true North.


What US Companies Need to Know about Paying Employees in Canada

Topics: Business Expansion

Wondering How to Pay International Employees? Follow These 5 Steps

Posted by Stacey Duggan

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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.

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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

What US Employers Should Know about Canadian Business Culture

Posted by Karen McMullen

|

Nov 13, 2017 9:00:00 AM

What US Employers Should Know about Canadian Business Culture--.jpgAs a U.S. employer hiring Canadian employees or expanding into Canada, it's important to have a general awareness of Canadian business culture. For U.S. companies operating businesses north of the border, understanding basic customs is a matter of respect. 

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While it's important to work with professional employer organizations to work out the details of payroll and other logistics, it is up to you to figure out the social aspect of this outsourcing. The following is a basic guide on what you can expect from business culture in Canada.

Meetings

Business meetings in Canada are generally more reserved than those in the United States. While American workers generally assert their thoughts quite forcefully, often interrupting their coworkers, Canadians communicate differently. Disagreements are usually resolved respectfully and the employees truly try to seek agreement. Take care not to interrupt anyone, as this will be seen as disrespectful.

You may also notice that managers take time to ask team members for their opinions individually during meetings, taking a more informal approach. In general, Canadian management style is more group-oriented than individualistic, so an overall team goal matters.

Networking and Business Contacts

Similar to American business communications, Canadian networking is formal. You should shake hands and hold strong eye contact. You may notice, however, that these contacts are less direct than your American colleagues. While Americans are used to boasting their accomplishments, Canadians may take a more subtle approach to networking.

Also, keep in mind that much of Canada speaks French. If you are operating in or near Quebec especially, it would be wise to have copies of your business cards and other materials in French and English.

General Business Communications

In the U.S., professionals take a high-energy approach to business most of the time, focusing on data and the end goal. Depending on the industry, the Canadian approach might not be as intense. As mentioned above, they generally see business as more team-oriented. Canadian business employees also take dress very seriously, so dress professionally.

While business culture in Canada is not drastically different than that in the U.S., it's important to pay attention to details when attending meetings north of the border. Remember that working with a Canadian professional employer organization is also useful when handling Canadian employees. These payroll processing companies can also assist with HR support and dealing with sensitive employment issues.

What US Companies Need to Know about Paying Employees in Canada

Topics: Business Expansion

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

Posted by Karen McMullen

|

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?

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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

Top 5 Tips For Using a Canadian Contractor

Posted by Stacey Duggan

|

Sep 6, 2017 9:00:00 AM

Top 5 Tips For Using a Canadian Contractor.jpgUsing contract workers has become an increasingly popular option for many businesses. In fact, 1.8 million Canadians are currently in temporary and contract employment. With this large pool of talented workers so readily available, it’s no wonder you might be thinking of using a Canadian contractor.

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

However, there are some important things you need to consider before hiring contract workers from Canada. The laws are different and without complying with them, you can find yourself in a risky legal situation. Additionally, if you don’t understand exactly what your business’s needs are, you might find yourself hiring the wrong person.

Avoid the risks and keep reading for five tips when using a Canadian contractor.

1. Know Your Business Needs

Using a Canadian contractor can be a smart decision—but only if you understand exactly what your business needs. It would be a mistake to hire someone who you thought was a great fit, but didn’t have the skillset you ended up needing. Evaluate the position that needs to be filled and consider the skillset each candidate must require. Remember to think about the future needs of your business as well. Hiring someone that can be adaptable as your business grows and needs change is always a smart decision.

2. Understand The Laws

Canadian laws are different, especially when it comes to using a Canadian contractor. The Canada Revenue Agency (CRA) and a long list of other federal and provincial ministries are all motivated to question the status of your contract workers. Due to the savings in cost, some businesses have taken advantage of the system, wrongfully classifying employees as independent contractors to avoid providing benefits and in turn, saving money. For this reason, it’s no surprise there’s been a rise in audits and investigations regarding the classification of independent contractors. That’s why it’s important you understand the laws when using a Canadian contractor. Otherwise, you’ll face the long list of fines and penalties.

3. Consider an Employer of Record

There’s a lot to consider when using a Canadian contractor. From hiring to payments, things can get complicated, especially as you continue to run other aspects of your business. If things seem overwhelming during your search for a contractor, it may be time to consider outsourcing the work to an Employer of Record. An EOR handles all aspects of working with a Canadian contractor. From hiring, training, to payment schedules, everything is handled for you. One of the greatest qualities of an EOR is the expertise in Canadian laws and regulations. You won’t have to worry about late payments, misclassified workers, or improperly filed taxes: professionals with years of experience handle everything with care and a watchful eye.

4. Make Sure You’re Impressed

It’s important you’re impressed and satisfied with the quality of work you receive when using a Canadian contractor. If you’re not, you’re allowed to look for other candidates. Remember, a contract is only a set amount of time, meaning if you aren’t happy with the work, you have no obligation to continue. On the other hand, if you are impressed, you have every reason to talk with the contractor and see if they’re interested in extending the life of the contract. Who knows—you might find yourself wanting to hire them full time.

5. Ask For Recommendations

If you’re having a hard time finding the right Canadian contractor, it’s smart to ask for recommendations. This is a great tip for a few reasons. Firstly, it means someone else has worked with them before and has been impressed with the work. It also means the worker is familiar with the process and daily life of being a contractor, bringing experience to the table other’s may not have.

Using a Canadian contractor is a smart move for many growing businesses. Finding a temporary worker to fill the gabs allows growth to continue while respecting your budget. Remember, reaching out to an EOR is always easy if the process gets too unclear.

What US Companies Need to Know about Paying Employees in Canada

Topics: Business Expansion

What You Need to Know as an American Businesses Expanding into Canada

Posted by Corinne Camara

|

Aug 28, 2017 9:00:00 AM

What You Need to Know as an American Businesses Expanding into Canada.jpgFor many American businesses, expanding into Canada is a no brainer. The similar consumer base, close proximity, and growing market make it the perfect country for expansion. However, foreign employers are also somewhat hesitant to expand due to the complicated differences when it comes to registering a business in a new country.

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

From employing new staff to complying with different laws, the process of expanding into Canada can be slow and frustrating without understanding some key tips. Continue reading to see exactly what you need to know as an American business expanding into the North.

The Laws are Different

The most important thing to understand before expanding into Canada is the differences in laws and regulations. While there are many similarities, there are dozens of differences that if ignored, can leave your business in a pile of expensive legal troubles.

US companies must ensure Canadian employees are classified correctly and paid the correct Canadian payroll taxes. If employees are misclassified, US employers can find themselves in trouble with the Canadian Revenue Agency (CRA).

Canadian payroll taxes also follow a different schedule. While dates vary depending on the type of business, to avoid fines or audits, US employers must be punctual and ensure taxes are submitted correctly and on time.

Canadian employees are also subject to deductions such as Canadian Pension Plan (CPP), Employment Insurance (EI) and income taxes. US companies must ensure these three deductions are understood while calculating Canadian payroll taxes.

HR Is Important

Human resource management is vital when expanding into Canada. From recruiting and training employees, managing health and safety regulations, to handling sensitive employment issues, efficient HR management is one of the keys to success. However, it’s all too often overlooked.

Many business owners underestimate the importance of efficient HR while expanding. As the business owner, your responsibilities will be tied up in managing other aspects of expansion, leaving HR on the backburner. For businesses expanding into Canada, a Professional Employer Organization (PEO) is often used to handle all HR responsibilities. Not only does this ensure professionals handle all HR practices, but you’ll be able to focus on other more important business functions.

There Will Be Stress

Yes—expanding into Canada is stressful. It takes time, hard work, and an abundant knowledge of Canadian rules and regulations. Before expanding, it’s important to evaluate what you can do to streamline the process and reduce any situations where added stress may have the chance to occur.

Have an understanding of your customers and the competition. While e-Commerce sales in the country topped off at $22.9 billion in 2014 and are expected to rise, it’s important to consider long-term success. Ensure you have enough finances and resources set aside to support yourself should things get difficult. It’s also important not to expand alone. Make sure your team is just as committed as you are and ready to take on the challenge of expansion. Lastly, seek help where necessary. For instance, a PEO can be your right hand man when expanding.

A PEO Can Help

A PEO (also known as an Employer of Record or EOR) offers international companies seamless expansion into Canada without the risks that come from expanding alone. From understanding foreign employment compliance, handling payroll systems, and staying on top of HR functions, a PEO shouldn’t be forgotten when the conversation of expansion arises. If successfully expanding into Canada is important to you and your business, make sure you do things right—get in touch with a representative today and see how a PEO can make your expansion easier.

What US Companies Need to Know about Paying Employees in Canada

Topics: Business Expansion

Why You Should Consider Hiring Canadian Contractors

Posted by Anna Mastrandrea

|

Aug 25, 2017 12:30:00 PM

Why You Should Consider Hiring Canadian Contractors.jpgFor many businesses, especially small businesses, hiring Canadian contractors can be a smart solution to many business hiccups. As the seasons change, so does the demand for different projects and different skills. Hiring an independent contractor can be the most obvious solution.

As independent contractors become an increasingly popular solution for many businesses, one might find themself asking why. What exactly are the benefits of hiring independent contractors? Why should you consider hiring Canadian contractors? Read on to gain a better understanding of why you should consider hiring independent contractors from Canada.

It's Easier Than You Think

For many, working with international contractors is avoided due to confusion regarding aspects of payroll or HR services. While there’s a lot to know about working with Canadian employees, many payroll companies can help simplify the process. Now, it’s easier than ever! No longer will you have to worry about the complications, instead you can focus on finding independent contractors who are the perfect fit, regardless of where they are from.

Project Flexibility & Managing Workloads

By 2020, half of the workforce will be made up of contract workers, proving that working with contractors is becoming an increasingly popular solution for managing changing workloads. Hiring contractors allows you to bring on more staff when you need them, without making the commitment of hiring someone full-time. For instance, perhaps spring is an extremely busy season for your business and you want to hire help for just those few months. Or maybe a project needs more help than you anticipated. Working with a contractor allows you to find workers for those seasons or projects, with no obligation to renew a contract once it expires. This allows your business to grow and move forward, without putting your budget or clients in jeopardy.

New Pool of Skills

In 2010, 2.7 million Canadians were self-employed—and the numbers continue to rise. This means there’s an entire pool of potential job candidates with expert skills that one might not be able to find anywhere else. Limiting your search to one place can leave you hiring someone who might not have the exact skillset you want. Hiring Canadian contractors allows your business to explore the skillset of thousands of more experts, ensuring that you find the right fit for the job. Don’t risk hiring the wrong person and consider expanding your search to new borders.

Cost Savings

When you hire a new full-time employee, you’re responsible for paying for more than an annual salary. Training, vacation time, benefits, and all the bookkeeping regarding a new hire can actually end up costing you more than hiring Canadian contractors. Contractors don’t require training or any type of benefits. Because they’re not full-time employees, you won’t have to worry about workers compensation or unemployment insurance. Additionally, contract workers usually come with their own equipment, meaning you won’t have to pay to have them suited for the job. While there are some things you should know abut paying Canadian workers, it’s safe to say that outsourcing payroll duties can help you simplify the process.

It’s a Test Drive

For many businesses, working with contractors can be seen as a “test-drive” before hiring the worker full-time. You wouldn’t buy a car without getting it on the road first—the same goes for new employees. Hiring Canadian contractors can allow you to get to know a worker and their skills before making the commitment of hiring them full-time. Once you’re confident in their abilities or impressed by their work, you can always decide to hire them. It’s a safe and cost effective way to streamline the hiring process.

What US Companies Need to Know about Paying Employees in Canada

Topics: Business Expansion

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