Home Blog

Blog

3 Things You Need to Know about an Employer of Record in Canada

Posted by Stacey Jones

|

Aug 22, 2019 9:00:00 AM

EOR-in-CanadaIf you’re like many ambitious American business leaders, you dream about expanding your business beyond the borders. Expanding internationally takes good business acumen, courage, and a little bit of luck.

Another key ingredient of success in any international market is making sure you have the right partners on your side. As you expand into Canada, you may wonder about who you need to have on your team. An employer of record (EOR) might be one of the partners you’re considering to help with business expansion.

Before you team up with an employer of record in Canada, though, you should know what you can expect. This quick guide will help you understand the services an EOR provides and how they could help your business succeed in the Great White North.

1. An Employer of Record in Canada Is Your Total HR Solution

First things first. What does an EOR in Canada do?

Much like their counterparts in the US, a Canadian EOR helps your business administer HR to your Canadian employees. They can assist with almost everything, from helping you locate talent to helping you design a health insurance program that really works for your employees north of the 49th parallel.

An EOR can also help you navigate the complexities of doing business in Canada. They’ll help you with payroll and taxes, making sure your CRA remittances are calculated correctly and submitted on time. They can assist with workers’ compensation. They may even be able to offer training and development opportunities for your Canadian employees.

One of the biggest advantages of working with an EOR in Canada is their ability to help you ensure your compliance. Employment law in the Canadian provinces is ever-changing, and getting a helping hand with compliance is usually a good idea.

2. A Canadian EOR Improves Efficiency

Doing business in Canada often means you have a steep learning curve ahead of you. For many American businesses, Canada is their first international expansion. For others, the similar cultures offer a sense of confidence and security.

This might lead to business owners who try to do it all themselves. This almost invariably leads to missteps, whether in the administration of payroll or in employee management. Not knowing the rules could bog down your team, even if they do come up with the correct answer in the end.

This situation slows down operations and makes communication with your Canadian employees frustrating for both sides.

An EOR can be a great solution. Since they’re already well-versed in Canadian employment rules, they can assist you in delivering more efficient HR service to your workers. Their expertise also streamlines communications with your employees.

In turn, everyone is able to get more done is less time. The EOR’s HR service can also improve employee satisfaction. Happier employees boost efficiency and productivity in your company as a whole.

3. The Advice You Need

A Canadian EOR does more than administer payroll. They can offer you the insights you need to succeed in the Canadian market.

Whether it’s advice on upcoming legislative changes or insights about Canadian work culture, the expert team at the EOR has seen it all. With their advice, you could plan your Canadian business operations with ease.

The Right EOR Is Out There

Some employers hesitate to work with an EOR in Canada because they’re not sure the services address their needs. Chances are they just haven’t found the right partner.

There are many different Canadian EOR out there, and one of them will be a great fit for your business needs. Whether you need help with payroll or a more comprehensive suite of services, the experts can help.

Topics: EOR, Canadian Employer of Record, Canadian EOR

How to Choose the Best Employer of Record

Posted by Stacey Jones

|

Aug 20, 2019 9:00:00 AM

choose-employer-of-recordExpanding into the United States is both exciting and a little intimidating for most Canadian business owners. The American market has a reputation as being a tough nut to crack, but if you succeed there, you can succeed anywhere.

Canadian business owners sometimes feel a little lost when it comes to the nitty-gritty of their US operations. When you step over the border, there are many changes, ranging from tax law to minimum wages to health care. As an employer looking to hire on American workers, you may not be sure where to start.

One smart move is to work with an employer of record. An employer of record can help you navigate and succeed in an unfamiliar business landscape. There are many EORs in the US, and each of them offers something a little different. How can you be sure you’ve picked the right partner for your business?

The following tips can help. Read on to learn how to choose the best employer of record for your business needs.

Define Why You Need an Employer of Record

The first step you should take is to define your business’s needs. Since each EOR offers something a bit different, knowing what you need could help you single out the best fit for your business.

Consider what you need the most help with. Is it locating talent, or do you require more help with navigating US payroll? How familiar are you with US business taxes or employment legislation in the state you’ll be operating in?

Most Canadian employers find they need a comprehensive suite of services. Look at what each EOR specializes in. Some may be more focused on helping you find and hire talent, while others place their pride in the payroll services. At the end of the day, any EOR you hire should be ready to help you manage your US employees from end to end.

Do Some Research

The next step to finding the right EOR for your business is to research different firms. You’ll want to ask plenty of questions during this stage.

First, make sure the EOR offers the services you’re most interested in. Then, check that they serve the area you plan to operate in. You might find a great EOR, but if their service is limited to Maryland and you plan to open up shop in California, you might have a problem.

Next, compare EORs who offer the services in your new location. Do they have a specialty? Do they offer additional services that could help you as your business expands?

The final step of your research should be reaching out to some of the employers of record you’ve researched. Ask about their experience in your industry or call for a quote.

Evaluate Offers and Customer Service

With a few quotes in hand, you can begin to compare EORs and determine which one is best suited for your business needs. While getting the right services at the right price is important, you’ll also want to consider the customer service you receive.

How quickly does the EOR’s team get back to you? Can they answer your questions about payroll or workers’ compensation? You should walk away with a sense of confidence. After all, this is a partnership. You’ll be working with the EOR for some time to come, so if they’re not meeting your expectations during the research and quotation phase, you should think twice about signing on the dotted line.

Get Ready to Grow

The final matter you should think about when you’re looking for the best EOR is the future. If you partner with this EOR today, will they still be able to serve your needs a year from now? Five years from now?

The employer of record you choose should be ready to grow with you. Finding the right EOR could be just a click away.

Topics: EOR, Employer of Record, Canadian Employer of Record, Employment of Record Services

How Canadian Employer of Record Services Can Help Your Company

Posted by Stacey Jones

|

Aug 2, 2017 9:00:00 AM

So, your company is growing at a rapid pace and you’re beginning to expand your business into Canada. Congratulations! That’s great news. Business growth is the goal for every company, however sometimes it happens faster than anticipated. Keeping up with new payroll regulations, expansion of HR duties, and Canadian regulations can be daunting and costly.

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

But there is a solution that can help your business continue to grow while you focus on important tasks. It’s called an employer of record. These companies help you organize your HR and payroll administration duties, working completely on your behalf. Keep reading to see how Canadian employer of record services can help your company navigate through this newly found territory.

HR Support

While you focus on growing your business, sometimes HR duties become the last thing on your mind. Between recruiting, hiring, training, and terminating employees, it’s possible the task of managing it all has become too much. You need more time to focus on your business and its goals, and less time spent worrying about administrative duties.

With Canadian employer of record services, you’ll be able to hand off these administrative tasks confidently. All HR responsibilities will be handled, leaving you to sit back and manage the other aspects of your company with ease. This improved process will help your company expand into Canada, while you continue to take control of things back home.

Rules and Regulations

Staying on top of another countries rules and regulations adds a handful of duties and education to your plate. If managed incorrectly, you can be left in an expensive situation, facing multiple lawsuits and expensive fines. For example, submitting your payroll data to the CRA (Canadian Revenue Agency) late, even by three days, can leave you responsible for late filing fees. And that’s one of the smaller legal responsibilities. It’s a mistake you don’t want to make, especially as your company tries to grow.

Avoid the hassle and stay on top of things by working with Canadian employer of record services. Keeping track of all important dates, legal regulations, and taxation policies are just some of the many benefits these professionals provide. Expanding into Canada can seem intimidating, but working with an EOR helps you streamline the process and avoid mistakes.

Speeds Up the Process

Establishing your business on new soil can be a slow process. For some companies, it can take years to get their company functioning in Canada. Without knowledge of the country and its regulations, getting things moving is inevitably slow.

Avoid the painstakingly slow process and consider Canadian employer of record services. These professionals take care of all the tasks involved with breaking ground in Canada, like employee recruitment, payroll, and staying up to date with regulations. This saves you time, allowing you to focus on the other aspects of growing your business.

Saves Your Money

If done correctly, expanding your business into Canada can be an extremely smart move. In fact, in 2014 Canadians spent $22.9 billion dollars in ecommerce sales, and the numbers are expected to rise. With audiences very similar to the US, Canadian consumers can become the perfect target audience for many American businesses.

However, setting up a business in Canada can be incredibly expensive. The cost of hiring and training employees alone costs thousands of dollars. Not to mention any fees associated with errors in payroll or CRA mishaps. It seems like there’s a lot of room for costly errors.

Canadian employer of record services help you save money as you expand your company into Canada. From keeping up with regulations, training employees, and handling all payroll functions, working with a EOR might be the smartest investment you can make.

What US Companies Need to Know about Paying Employees in Canada

Topics: Canadian Employer of Record

How International Companies Legally Pay Their Canadian Employees

Posted by Stacey Jones

|

May 11, 2015 9:00:00 AM

How-International-Companies-Legally-Pay-Their-Canadian-EmployeesAlthough you may think you’re paying your Canadian employees legally—you could be wrong. International companies often believe their payroll practices are on the up and up, but without proper experience and expertise in Canadian payroll legislature, they could be partaking in illegal activities. It’s not so easy to pay Canadian workers—you can’t just convert funds to Canadian dollars and mail out cheques every couple of weeks. There are laws to follow, employee classification to figure out, and taxes and other deductions to consider.

To ensure you are paying your Canadian employees legally, check out your three options below.

Learning the Ropes

International companies can choose to take on the responsibility to pay Canadian workers on their own. Though this is a fair option to choose, it takes considerable time and effort and is usually the reason that workers aren’t paid legally—either because of a lack of knowledge or because employees want to ignore the law.

If you are serious about paying your workers legally, you’ll have to learn the ropes. The Canadian legal system related to payroll is complex, ever changing, and often confusing. Not every law applies to all international companies so you’ll have to be able to decipher each law and understand whether or not it applies to your type of business. Additionally, the legislature changes depending on where your Canadian employees are working—each province has its own regulations.

If you want to learn the ropes and get the experience and knowledge you need to legally pay your workers in Canada, it’s quite admirable, but it’s going to be more difficult than you think. The legislature, taxes, deductions, remittances, and deadline all differ from those in your home country. Miss even one vital piece of the puzzle and you could be setting yourself up for fines and penalties—not to mention a bad reputation.

In short, there’s a lot to learn, and you’ll have to learn it quickly—before you hire and pay your first employee. Additionally, if you’re going to handle this administrative work internally, you’ll have to establish a presence in the country, and set up the appropriate government accounts and infrastructure before you even get started. This can delay your expansion efforts considerably.

A Payroll Service Provider Can Help

Your second option is to outsource your payroll needs to a payroll service provider. When you take this route, you don’t have to worry about learning the Canadian laws or ensuring that you’re complying with them. The payroll provider can do this for you. Not to mention, the company can do this at a fraction of the time and cost that it would take you to manage payroll, because it already has a team of experts on staff that knows the ins and outs of the business. You won’t have to worry about deducting taxes, remitting payments, filing annual tax returns, mailing pay stubs, or keeping track of benefits, contributions, or vacation and sick days. Choose the right service provider and you can also outsource your human resources administration as well, so your entire business can be more streamlined in the back office.

Partner Up with an Employer of Record (EOR)

The last and most beneficial option for international companies is to partner up with an employer of record in order to pay Canadian workers legally. The employer of record in Canada legally acts as the employer to your workers in the country. The EOR takes over the responsibility of dealing with all aspects of your Canadian workforce, including payroll and human resources and all other administrative roadblocks.

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

Topics: Canadian Employer of Record, International Companies

Alberta Employee Vacation & Stat Holiday Entitlement

Posted by Stacey Jones

|

Sep 16, 2014 7:30:00 AM

Alberta, Canada FlagAlberta Employee Vacation & Stat Holiday Entitlement is the third post in The Payroll Edge’s series “Employee Vacation & Stat Holiday Entitlement” where we outline Canadian employment compliance standards by province to assist you in hiring a Canadian worker.

American or foreign companies paying Canadians take note:  Canadian statutory holidays are paid holidays. As a PEO in Canada, we’re often asked about whether there is stat and vacation pay differences between provinces. Every province has different holidays and qualification rules around paying the employee for the time off.   These rules apply to part time, full time, hourly or salaried employees.  

Public paid holidays and minimum vacation requirements are set out by the “Employment Standards Code of Alberta”.

There are nine public holidays in the Canadian province of Alberta:

  1. New Year’s Day on January 1st
  2. Family Day on the third Monday in February
  3. Good Friday or Easter Monday
  4. Victoria Day on the Monday preceding May 25th
  5. Canada Day on July 1st
  6. Labour Day on the first Monday in September
  7. Thanksgiving on the second Monday in October
  8. Remembrance Day on November 11th
  9. Christmas Day on December 25th 

Exemptions to Public Holiday Pay Entitlement:

There are numerous rules affecting Canadian employees’ eligibility within the province of Alberta. For instance, in Ontario, Canadian workers are entitled to public holiday pay from day one. Meanwhile, an employee in Alberta must have worked for the employer for at least 30 working days in the 12 months before the statutory holiday to be paid for it.

Vacation Pay and Entitlement in Alberta

Minimum vacation time Canadian workers are entitled to in Alberta is as follows;

Two weeks’ vacation time for every 12 months worked for the first four years. After five years of continuous employment at one employer, vacation time increases to three weeks annually. Employers can choose to have the employee work for 12 months before granting vacation time but can also choose to allow the worker to take vacation time any time after the employment has begun.

Vacation pay amounts to 4% of wages for the first four years of consecutive employment at the same employer and then 6% of wages after that. Employers can choose to pay our vacation pay with every paycheque or to pay out the applicable amount right before the vacation time is taken.

Let’s get clear on what “wages” to include when calculating vacation pay before you bring out your calculator. In the province of Alberta there is fewer pay types included and considered as “wages” than most other provinces. To calculate the 4 or 6 % of the previous year’s wages; include regular earnings and commissions. Do NOT include; public holiday pay, overtime pay, bonuses or tips and gratuities.

Note that employees are entitled to both Vacation Time and Vacation Pay.   

Please note Alberta employees working in the construction industry have varied employment rules due to the nature of the industry. Refer to Work Alberta’s website or information on employment standards for the construction industry.

There are other industries and jobs that have exceptions to the above rules. Please visit www.work.alberta.ca for further information on Alberta’s Employment Standards rules.

View the province of Alberta’s Vacations and Vacation Pay Factsheet here.

It can be confusing for American and foreign based firms to learn and comply with Canada’s stringent employment laws that often vary by province or territory. We are a Canadian based Employer of Record service provider similar to a Professional Employer Organization (PEO). Our services include payroll processing for local, American and foreign employers who opt to have us as the “Employer of Record” for their Canadian workers. If you’re thinking of hiring a Canadian worker, contact us before you establish the numerous Government of Canada accounts to begin payroll processing.

View our services page for more information on our Professional Employer Organization PEO and Employer of Record EOR services.

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

Topics: PEO, Canadian Employer of Record, American PEO, American Business in Canada

American Employers: Canada's Worker's Comp is Government Run

Posted by Stacey Jones

|

May 1, 2014 10:12:00 AM

Unlike the U.S., the workers compensation program in Canada is government run. Every Employer in Canada must register for a worker’s compensation account in every province that they have employees working in. 

Workers Compensation Form brought to you by The Payroll Edge

Each province has different rules as far as the registration process.

For example, in Ontario you cannot apply for a workers compensation account until you actually have an employee start date, in Nova Scotia you don’t register for an account until you have 2 workers and in Alberta you can pre-register regardless of whether you have employees or not.

Each province also has different registration fees and some may even ask for a pre-payment for new registrants. As an employer, you pay a certain percentage in payroll taxes to the provincial workers compensation board based on the wages of your workers and the risk associated with the type of work your employees are performing.

The bigger the risk of injury to workers, the larger the percentage used when calculating what is due, for example currently in Ontario a worker in a clerical role would cost an employer 0.22% of the worker’s wage in workers comp taxes. However a worker on a construction site in Ontario would mean the employer is taxed at 5.05%. 

If a worker is injured on the job, the workers compensation board will assign a claim adjuster who will investigate and make recommendations. The workers compensation boards in every province are in place to protect the worker and ensure employers meet health and safety standards. They can be a daunting authority to a U.S. company unfamiliar with the rules and regulations associated with the Canadian Ministry of Labour.

Many U.S. companies don’t realize that when their Canadian workers are injured, that they should complete their own investigation and that they have the right to appeal the board’s decision. They also tend to rely on their own legal counsel in the States to advise them on best practises across the border instead of engaging with a professional employment organization in Canada.

Lack of experience in Canada can lead to hefty fines for non-compliance so it’s important that U.S. companies engage in Canadian expertise, or rely on an experienced Employer of Record, when expanding their workforce to the great white north. 

Topics: Professional Employer Organizations, Worker's Compensation, Canada Revenue Agency, Canadian Employer of Record, American PEO

Americans Conducting Business in Canada Beware: Border Patrol Keeping Tabs

Posted by Stacey Jones

|

Apr 29, 2014 9:56:00 AM

 

As seen on thestar.com “Border officials to share travellers’ info with federal government” by Nicholas Keung.

Effective summer of 2014, Canadian and U.S.A. border patrol services will start keeping tabs on Canadians and Americans entering and exiting either side of the border. The Entry/Exit program initiative will further increase both countries security and has already begun taking note of third country national’s information including those arriving to Canada on work permits, foreign students and visitors. 

The Entry/Exit program will be in full effect on June 30 2014, and will be extended to all Canadian and American citizens crossing the border.  

Canada and the USA border patrol services will soon be collecting both countries citizens information as part of the new Entry/Exit initiative from The Payroll Edge

What Information will the Canada Border Services Agency (CBSA) be collecting and sending to federal departments?

  • Travellers Name
  • Date of Birth
  • Nationality
  • Gender
  • Document Type
  • Work Location Code/Port of Entry Code
  • Date and Time of Entry
  • Country where travel document was issued

How does the Canada Border Services Agency use this information? Simple; data on entry to one country would serve as a record of exit from the other. This information will enable government officials to track illegal activity such as citizens scamming Employment Insurance or child tax benefits programs when they are not in the country.

So how does this affect American employers employing or paying Canadian workers? If you conduct business in Canada -and travel there regularly, be prepared to hand over your data to border officials and have it shared between both countries federal departments.  

If you have a U.S. employee who crosses the border into Canada on a regular basis and is away from their country of residence for long periods of time, ensure that you are aware of the rules surrounding foreign travel as it may not only affect the employee’s and companies taxation liabilities, misuse will result in their inability to cross the border at all.

American Employers conducting business in Canada should also be aware of the status of their permanent residency (if applicable) as this will now be tracked under the new Canada-U.S.A. border data exchange program. Permanent residents must live in Canada for a total of at least two out of every five years to remain eligible for the program.

If you conduct business in Canada and wish to avoid the complications of your U.S. employees crossing the border to service your clientele here, employing a Canadian may be the best solution.  To do so without the complexity of registering a business in Canada and understanding foreign employment law, an Employer of Record Service in Canada (known as a PEO in the U.S.A.) can help. A Canadian Employer of Record takes care of everything for American employers retaining Canadian workers including payroll tax deductions, employment standards compliance and HR management solutions. Contact The Payroll Edge to learn more. 

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

Topics: Professional Employer Organization, Government Compliance, PEO, Canadian Employer of Record, American PEO, American Business in Canada, Canadian-Based EOR, US and Canadian Business

Canadian vs. American: Drug Testing & Background Checks

Posted by Stacey Jones

|

Apr 22, 2014 8:55:00 AM

Canadian vs. American: Drug Testing and Background Checks

Background Checks and Drug Testing

These two often go hand in hand in the U.S. and are a precursor to employment but in Canada the rules and perception surrounding drug testing and background checks are very different.

Drug testing a potential employee is rarely permitted in Canada and is not worth the legal risk with the Human Rights Commission. Although this issue has seen some press as of late, the majority of Canadian employers are not permitted to maintain policies in regards to pre-employment drug testing and random drug testing during employment. The exceptions are safety sensitive positions where an accident or incident has occurred or where being ‘under the influence’ could cause irreparable damages or death.

A great example of this can be seen in the recent lexology article ‘Suncor random drug and alcohol testing decision released’ written by Caitlin Nobes; 

Recently in Alberta, with the oil industry booming the issue of safety has come up because workers living on worksites are suspected of being intoxicated while working. Suncor was set to begin random drug testing on their employees but it was put on hold due to an injunction and the panel who made the decision said “the program cannot be justified” and “In our view, the evidence does not demonstrate a culture at the Oil Sands Operations where the consumption of alcohol is so pervasive as to be accepted by employees, where employees go together to drink openly and where such activity is either condoned or encouraged by management’s practices or inaction”

Unifor Local 707A President Roland Lefort, who represents the workers at the affected sites says:

"Random drug testing of workers that have done nothing wrong is a violation of their basic rights, we will work with Suncor to achieve the highest possible levels of workplace safety with education and prevention, not invasive medical procedures."

The practise of drug testing employees is for the most part, considered a human rights violation in Canada.

Unlike in the U.S., it is not common practice to run a background check on every potential employee. Although there is no law in regards to this, it is best practice in Canada to only run a background check on a potential employee if they will be engaged in a job working directly with money or highly sensitive information. Many times U.S. companies have run these checks on a Canadian out of habit and end up with a disenchanted potential hire.

For those American companies keen on hiring Canadian employees without a good understanding of the rules and regulations to do so, should engage with an Employer of Record (EOR) service for legislative and legal compliance. Canadian EOR's (known as PEO's in the United States) can ensure seamless integration into the Canadian market without the daunting task of understanding foreign employment compliance.

For more information on our Employer of Record Services
Contact one of our Employer of Record specialists.

 

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

Topics: EOR, Professional Employer Organization, Employment Standards Act, Canadian Employer of Record, American PEO, American Business in Canada, Compliance, Canadian-Based EOR, Canadian EOR

U.S. Employers: There is No At Will Employment in Canada

Posted by Stacey Jones

|

Apr 10, 2014 8:41:00 AM

describe the imageAmerican Companies “At Will Employment Policy” and Canada’s “Reasonable Notice Policy”

We see it all the time in the movies. An employer at odds with a worker shouts out ‘You’re Fired’, the employee gathers their things, leaves the building and that’s the end of it. What you don’t see is the work the HR department then has to go through determining pay in lieu of notice, severance package and a possible wrongful dismissal suit. 

In the U.S. many employment relationships are considered to be ‘at will’ or, in other words, can be terminated by either party without cause or notice without the worry of retribution. In Canada no such relationship exists so hiring a Canadian employee can be much more complicated.

Canadian law states that an employer can terminate an employee without cause but they are required to provide ‘reasonable notice’ or compensation in lieu of this notice.

Minimum requirements for ‘reasonable notice’ vary from province to province and will depend on the tenure of the employee. If an employee has been with the company for less than three months the issue of termination is less complicated so often Canadian companies will refer to this as the “probationary period” and assess the employees ‘fit’ and ‘competence’ for the position before the three months end.

When terminating a Canadian employee without notice or pay in lieu, there must be evidence of ‘Just Cause’. Just cause can be used for certain serious acts such as theft or harassment or employees can be fired as a result of a series of minor incidents.  For the latter dismissal, the employer must document that they followed a progressive discipline policy of increasing severity.

A solid employment agreement is essential when it comes to outlining notice and probationary periods as well as other regulations when it comes to employment standards in Canada. An essential step to take before engaging with an employee in the great white north is to consult a company in the know, preferably one well versed in Canadian employment law.

The Payroll Edge is a Canadian based Professional Employment Organization (PEO) or Employer of Record (EOR) as it’s called in Canada. We take on the responsibility of employment compliance when it comes to hiring north of the border so you can focus on expanding your business presence in Canada rather than learning a whole new set of rules and regulations.

Contact us today for more information on how we can help you!


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

Topics: workforce compliance, EOR, Employer of Record, Canadian Employer of Record, American Business in Canada, Regulatory Compliance, Canadian EOR, Employment Agreements

Employer of Record Service: Your American Business Presence in Canada

Posted by Ray Gonder

|

Mar 26, 2014 10:21:00 AM

American Business Expansion into Canada and when you should contact the Payroll Edge for our Employer of Record Services Great! Your expanding operations north of the border but with your American business expansion into Canada you wonder; How am I going to pay my Canadian employees?

Unless you are using an Employer of Record Service in Canada (similar to a PEO in the U.S.) and want to hire an employee you must register your business with the Canadian government. Federally registering is the first step and then registering a business presence in each province and / or territory (Canada has 13) you are operating in would be the next step. Of course this process can be even more complicated if you are a Limited Liability Company (LLC) in the US as Canada has no similar status and again has different rules depending on the province or territory.

Other Government Accounts U.S. based companies will need to pay Canadian Employees;

Registering your business is not the only registration you will do as a new business in Canada. You must also apply for a payroll tax account number into which you will remit the employer and employee taxes for the Canada Pension Plan and Employment Insurance.

These two taxes are in every province and territory across Canada with the difference being that each province has its own rate in which these taxes are calculated. Keep an eye on the rates as they often change for each province at the beginning of each year and its important to know when paying a Canadian. Some provinces have other payroll taxes such as the Employer Health Tax in Ontario and the Health Services Fund in Quebec so it’s important to know what other type of taxes are associated with the province the work is being done in. It’s worthy to note that as a company in Canada, you will be given a weekly, semi-monthly, monthly or quarterly deadline for these payroll taxes but for those provinces that have extra taxes (like the 4 provinces that have a health care tax) your deadlines might be on a different schedule. The Canadian Government will not hesitate to apply interest and penalties to slow paying accounts.

The best advice an American company should take when hiring workers in Canada is to use a Canadian Based Employer of Record service. Using an EOR like The Payroll Edge enables U.S. based companies to focus on their core business rather than learning a whole new payroll entity. Contact The Payroll Edge today! 

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

Topics: Payroll Tax in Canada, Payroll Tips, EOR, Employer of Record, Payroll Tax Tips, U.S. Business operating in Canada, Paying a Canadian, Canadian Employer of Record, American PEO, Payroll Tax Laws in Canada, American Business in Canada, Canadian-Based EOR, Canadian EOR, PEO Services, Canadian Payroll Services

Subscribe to Email Updates

Recent Posts

sidebar-cta-12-differences-to-expect-when-expanding-into-canada

Posts by Topic

see all