Home Blog

Blog

The 5 Things No One Told You about Canadian Payroll Regulations

Posted by Ray Gonder

|

Sep 18, 2015 9:00:00 AM

The_5_Things_No_One_Told_You_about_Canadian_Payroll_RegulationsWith new changes constantly being rolled out and myriad rules to learn, understand, and follow, it’s no surprise that foreign companies have a tough time staying compliant with Canadian payroll regulations. But compliance is critical if you want to avoid unwanted visits from the Canada Revenue Agency and hefty fines and penalties. 

Here are five important things about Canadian payroll regulations you should know, so you can stay in compliance while operating your business in Canada.

1. Registration

You must ensure that you are registering for the proper accounts before you can start to payroll Canadian employees. New employers in the country must get a business number and register for a CRA payroll program account. With this account, you’ll be able to report your GST, tax deductions, and other annual payroll and tax information. Depending on the province you operate in, you may also need an Employer Health Tax number.

If you have employees on payroll, you can’t skip these steps.

2. The Independent Contractor Conundrum

Many foreign companies working in Canada are audited because of the independent contractor conundrum. To avoid the headaches that come with Canadian payroll regulations and compliance, many business owners classify their employees as independent contractors. You would think that if the worker agrees to this classification that everything is well and good. Unfortunately, this isn’t the case. The CRA uses a four-point test to determine whether workers are truly employees or in fact contractors. Classification isn’t as straightforward as it may seem. It can get complex. Some of the factors you will need to pay close attention to include the employee-employer relationship, ownership of tools and equipment, control, chance for financial profit or loss, and how the worker is paid, among others.

3. Payment of Wages

Another aspect of payroll that seems straightforward is the payment of wages. The Canadian payroll regulations regarding the payment of wages vary by province or territory. Depending on where you operate, you might need to follow completely different rules, and if you operate in several different provinces and territories, you will have a lot to keep track of.  

For example, the minimum wage is lower in British Columbia than in Ontario, and employees serving alcohol have an even lower minimum wage than other types of workers. The frequency at which you pay your employees will also vary depending on location: in some provinces, you can pay monthly, in others you must pay bi-weekly. Each location will also have its own employment standard legislation regarding what information must be included on employee pay statements.

4. Hiring Employees

Along with a wealth of employment laws, there are two specific Canadian payroll regulations you must adhere to when you hire employees. The first is that you must acquire the worker’s social insurance number within three days of his first day of work. A SIN number that starts with “9” indicates that the worker is not a Canadian citizen and you’ll have to take additional steps to complete the paperwork for the hiring process. The next is that you must have the new worker fill out TD1 Personal Tax Credits Return forms. These forms will give you the information you need to make appropriate deductions.

5. Termination

If your company terminates an employee or that worker leaves your organization, you have a few things to do. The CRA recommends that you create a T4 slip of his earnings and deductions for the year to date. Keep one for your files and give a copy to the employee. You’ll also need to prepare a record of employment (ROE) and send it within five calendar days and provide any owed wages in a timely manner—the specific timeframe will vary by location.

If you fear non-compliance with Canadian payroll regulations and don’t want to handle the responsibility on your own, consider engaging an Employer of Record to take care of it.

Canadian Payroll Tax Deduction Calculator

Topics: Canadian Payroll Regulations

How Can Companies From New Zealand Manage Canadian Payroll?

Posted by Ray Gonder

|

Dec 16, 2014 9:00:00 AM

How_Can_Companies_From_New_Zealand_Manage_Canadian_Payroll-1.jpgCompanies from New Zealand may find that expanding their operations into Canada is a good business move. The two countries share a common language as well as similar consumer income and spending habits, which makes marketing and communication simple. The biggest difficulties lie in managing the legislative and regulatory requirements of a foreign country. Canadian payroll regulations are stringent and complicated, but that doesn't mean you can't overcome the challenges.

How can a company from New Zealand manage Canadian payroll regulations? There are two choices: manage payroll yourself or use an Employer of Record (EOR). Let's look at these two options.

Manage Payroll Yourself

It's possible for a New Zealand company to manage Canadian payroll regulations without outside assistance, but it's difficult and risky.

You'll need to establish a Canadian administrative presence, register with the CRA, and maintain accounts with all necessary governmental authorities. There will be both federal and provincial authorities that you work with. In addition, you'll need to establish and support Canadian banking, financial, and insurance infrastructure for your business. You'll have to make regular filings and remittances to these agencies. On top of all this, you need to keep up with federal and provincial employment and Occupational Health and Safety regulations, which change on a regular basis.

While it's possible to manage these items yourself, it can be very time-consuming and stressful, and if you miss remittance deadlines or become neglectful on compliance, your company could face costly fines. For these reasons, many foreign companies prefer to use an Employer of Record.

Use an Employer of Record

There is an excellent alternative to managing payroll yourself, and that is using an Employer of Record (EOR) to handle Canadian payroll regulations for you.

With an Employer of Record, your Canadian employees are seen as employees of your EOR, and all Canadian government remittances are processed by your EOR. Your compliance to payroll regulations is ensured, and your EOR can help you with up-to-date, accurate advice about other matters such as Canadian employment regulations and protocols. This helps you to avoid making costly mistakes.

Using an Employer of Record also allows you to focus on the expansion of your company instead of becoming absorbed with the details of a foreign government's payroll regulations.

The Payroll Edge provides comprehensive Employer of Record services to companies all over the world including those in New Zealand. Contact us at The Payroll Edge to learn more about how we can offer you a seamless workforce expansion into Canada. Our expert staff has the experience and the technology to help you to achieve your business goals.

Canadian Payroll Tax Deduction Calculator

Topics: Canadian Payroll Regulations, New Zealand

How to Manage Canadian Payroll Regulations

Posted by Ray Gonder

|

Oct 3, 2014 8:05:00 AM

how to manage canadian payroll regulationsManaging Canadian payroll regulations can be a full time job in itself. Aside from learning all of the Canadian payroll regulations, you also need to keep up with frequent changes to those regulations. The regulations are so complex that an entire industry has grown around helping businesses ensure continued compliance with them. Despite the growth of that industry, many owners still choose to go it alone. Unfortunately, any mistakes those owners make can result in a costly visit from the CRA. For the CRA, a lack of knowledge or experience with Canadian payroll regulations is no excuse for violating them. To help owners avoid these issues, here's a basic guide for managing Canadian payroll regulations.

Educate Yourself

These regulations aren't simple, and they can't be learned overnight. Professional payroll service providers spend years learning these regulations, and then spend more years working with more seasoned professionals. Obviously, you won't have time for all that. What you can focus on is learning the regulations that are specific to your business and payroll needs. As you learn more about the regulations that are particular to your business, you'll get a better sense of when you're out of your depth and need some help.

Get the Right Tools

If you're a US based business, your current accounting software just won't work. It wasn't designed to deal with Canadian payroll regulations, and there are too many differences to try to make them compatible. Find some good software designed for Canadian regulations, learn to use it properly, and keep it updated. This can become a substantial ongoing cost, and may not seem worthwhile for just a few Canadian workers. However, when you consider the high price of even a single violation, the software will almost certainly pay for itself.

Find Help When You Need It

Even the most seasoned professionals can feel overwhelmed dealing with Canadian payroll regulations. This doesn't reflect on the skills or knowledge of the professional, it only speaks to the difficulty of managing a foreign payroll system. Though the US and Canada share many cultural similarities, their legal systems and structures are completely different. Attempting to learn and manage both systems is not a task to be undertaken lightly.

For professionals who find themselves overwhelmed, there are professional payroll service providers ready and willing to help. These providers are staffed by highly trained, experience personnel who deal with Canadian regulations on a day-to-day basis. There's no shame in needing a little help, and getting the best help possible is a sign of good leadership.

7 Signs It's Time to Outsource Payroll

Topics: Canadian Payroll Regulations

How Good of a Canadian Payroll Calculator Are You?

Posted by Karen McMullen

|

Mar 7, 2014 9:00:00 AM

How Good of a Canadian Payroll Calculator Are YouBeing a good Canadian payroll calculator is about more than just crunching numbers. There are a lot of different variables that can affect which payroll laws are applied, and when. Knowing and understanding those laws makes all the difference between being a good Canadian payroll calculator, and being another heavily fined business. If you decide to act as your own Canadian payroll calculator, then you assume the risk of any errors you may make. Considering the difficulty and complexity of Canadian payroll laws, the chances of making mistakes are very likely. Before you take on this risk for yourself and your business, you should be aware of some of the possible pitfalls.

Head-off Re-classification

Correct worker classification depends on a lot of different factors. That classification can change depending on when and where the job duties are performed, as well as by changes in the work environment. There are numerous laws, both federal and provincial, that can affect how a worker is classified in different situations. As a Canadian payroll calculator, it will be up to you to know which laws to apply, and when. If several laws seem to contradict each other, it will be up to you to determine which has priority. If you get it wrong, the fines and penalties will be on you.

Withholdings and Remittances

As a Canadian payroll calculator, you’ll need to calculate the necessary withholdings from each employee’s paycheque, and make the proper remittances to the relevant authorities. Like classifications, withholdings and remittances can change according to different circumstances. You’ll need to understand when and why these changes occur, so you can make changes as necessary. If you make any mistakes, there will be back payments and remittances on top of the fines and penalties.

The Devil is in the Details

Another of your tasks as a Canadian payroll calculator will be keeping up with every aspect of employee timekeeping. This will include accrued holiday pay, overtime payments, unemployment insurance, and more. Changes in worker status can affect any or all of their timekeeping requirements, so you’ll need to be on top of those changes as well. As with your other record keeping responsibilities, any mistakes will be costly. You could end up owing employees thousands of dollars in missed overtime or holiday payments, along with any fines you owe for missing those payments. Mistakes in this area can also open you up to civil suits and potential criminal proceedings.

A Risk Not Worth Taking

Trying to act as your own Canadian payroll calculator may save you a little money up front, but it exposes you to huge liabilities down the road. The law is so complex that few businesses take on the risk of handling compliance entirely on their own. Instead, they turn to payroll service providers like The Payroll Edge. The Payroll Edge provides a comprehensive suite of payroll and management services for Canadian and US businesses. Their services help ensure that your business is always in compliance with payroll laws, saving you the time and expense of audits, fines, and civil or criminal actions. With their help, you don’t have to worry about how good of a payroll calculator you are. 

Canadian Payroll Tax Deduction Calculator

Topics: Canadian Payroll, Canadian Payroll Regulations, Canadian Payroll Calculator

How Canadian Payroll Keeps US Companies from Operating in Canada

Posted by Stacey Duggan

|

Feb 11, 2014 9:00:00 AM

How Canadian Payroll Keeps US Companies from Operating in CanadaManaging Canadian payroll is no easy task. For US-based businesses, there are numerous administrative hurdles that must be overcome before paying Canadian employees. Overcoming those hurdles is a time-consuming and expensive process. Once the hurdles have been cleared, there are ongoing concerns about the complexity of the payroll laws, as well as the frequent changes to those laws. The headaches associated with Canadian payroll have kept many US-based businesses from expanding into Canadian markets. For some businesses, the immediate and ongoing costs, as well as the risk of making mistakes, are simply too much to bear. Those companies choose to forego a Canadian expansion, rather than deal with the complexities of Canadian payroll law. Fortunately, there is an easy, affordable way to deal with Canadian payroll, while also minimizing the potential risks.

Jumping Through Hoops Yourself

Paying Canadian employees isn’t as simple as doing a quick currency conversion and sending out checks. Before you ever get to the point of paying employees, there’s a laundry list of administrative hoops to jump through. To legally establish a Canadian payroll department, you have to have a physical presence in Canada. This means establishing an actual, working office. You can’t get by with a postal box or an empty storefront. This cost alone has caused uncounted businesses to abandon their expansion plans.

Once you’ve established a physical presence, you’ll be faced with a few more hoops. You’ll need to set up all of your government accounts—the difficulty of setting up these accounts will vary greatly, depending on your type of business and what provinces you’ll be operating in. After that, you’ll need to set up bank accounts, purchase insurance, and schedule any workplace safety inspections. Once all of that is done, and you’ve gotten the green light from all of the different agencies involved, you can start hiring employees.

Hiring employees isn’t the final step in the Canadian payroll process. Once hired, they must be properly classified, trained, and provided all legally required materials regarding workplace health and safety. After they begin work, you’ll be responsible for keeping up with any changes to the laws, as well as any changes to worker classifications or job sites. Those laws can change with little notice, and are often subject to differing interpretations. Mistakes along the way will cost you time and money. Make mistakes after you’ve hired employees, and you could be facing audits, fines, and criminal penalties.

Letting Someone Else Jump Through Hoops

You could spend a lot of time and money trying to set up your own Canadian payroll department. Or, you could spend no time and less money hiring a Canadian Employer of Record (EOR). An EOR performs the same functions as a Professional Employer Organization (PEO) in the States. You pay the EOR directly, and they manage all aspects of your payroll. From hiring and training, to workplace safety and tax remittances, everything is handled for you. Since they’ve already set up the necessary accounts and infrastructure, they can start conducting your business in Canada almost immediately. And, since they service a variety of clients, the costs of jumping through the hoops are distributed across those clients – no single business has to foot the entire bill themselves.

An EOR like The Payroll Edge saves time, money, and risk. With their professional services, it’s unlikely that any mistakes will be made when dealing with Canadian payroll. They have the training and experience to keep up with the current complex payroll laws, and to deal with any future changes to those laws. With their help, you don’t have to worry about Canadian payroll problems keeping you from operating in Canada.

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

Topics: Payroll Processing, Payroll Service Provider, Outsourced Payroll Service, Canadian Payroll, Canadian Payroll Deductions, Canadian Payroll Regulations, EOR, Canadian Payroll Service, U.S. Companies operating in Canada, CRA

What’s The Best Canadian Payroll Calculator?

Posted by Stacey Duggan

|

Jan 17, 2014 1:40:00 PM

What’s The Best Canadian Payroll CalculatorLike a personal income tax calculator, a Canadian Payroll Calculator, like the one here can be a handy tool for determining if you’re on the right track with exemptions and withholdings. However, like a personal tax calculator, a Canadian Payroll Calculator is no substitute for the assistance of an experienced professional. If an online calculator could replicate professional experience, there would be no more need for CPAs, accountants, or tax attorneys. As things stand, calculators are limited by the knowledge and experience of the person using them. If you make an incorrect entry, or don’t fully understand how to apply the thousands of different rules and laws, then the output will be inaccurate. With personal taxes, this could result in an audit, fines, and back payments of thousands of dollars. When handling payroll for dozens or hundreds of employees, the costs could increase exponentially.

No Substitute for Experience

Let’s face it – payroll laws are complicated, no matter what side of the US-Canada border you’re on. If you happen to operate on both sides, then the complications are doubled. Payroll professionals spend years learning all of the intricacies of the law, and even that robust knowledge can’t prepare them for everything. When new laws are adopted, there’s no way for the authors to foresee every possible situation. When unique situations arise, applying the law correctly requires experience with previous, similar, situations. You can’t get that experience from just an online Canadian payroll calculator.

Payroll professionals handle every conceivable situation, week in, and week out. Every day is spent gaining more experience in the application of payroll regulations. While you or your payroll department may spend a few hours each week on payroll, payroll providers do it every single day. This level of experience allows them to quickly and accurately handle the most complex payroll needs.

Get Additional Value from A Payroll Provider

For US businesses operating in Canada, payroll regulations are just one of many day-to-day issues that must be dealt with. Maintaining a physical business presence, government accounts, insurance, and workplace compliance are a few more. Trying to manage the legal requirements of a business on both sides of the border can tax your resources and exhaust your staff. And, if you make any mistakes, the costs can quickly offset any profits you’ve enjoyed. No Canadian Payroll Calculator can tell you if you're handling your legal compliance correctly.

Payroll service providers in Canada also operate as Employers of Record (EOR). Performing the same functions as a Professional Employer Organization (PEO) in the US, an EOR makes it easy to manage your business from a distance. Instead of paying to set up your entire business organization north of the border, you pay the EOR, which already has all the business resources you need in place. Instead of spending your valuable time jumping through legal hoops and dealing with multiple layers of bureaucracy, you actually spend your time running your business. The EOR has the expertise and experience to handle all of the legal requirements, while you focus on the things that make your business successful.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Service Provider, Outsourced Payroll Service, Canadian Payroll, Canadian Payroll Deductions, Payroll Tax in Canada, Canadian Payroll Regulations, Employer of Record, Payroll Calculator, CRA, CRA Payroll Tax, Canadian Payroll Calculator

The Hardest Part About Canadian Payroll Tax Calculations

Posted by Karen McMullen

|

Jan 13, 2014 10:15:00 AM

The Hardest Part About Canadian Payroll Tax CalculationsThe hardest part about Canadian payroll tax calculations is not knowing that there are things you don’t know. There are so many subtleties to the law that are impossible to learn strictly by reading the statutes. Different situations can arise that completely change the way certain regulations are interpreted and applied. For many of these situations, experience is the only teacher. Unfortunately, experience can also be a harsh mistress. With Canadian payroll tax calculations, your first indication of a mistake could come in the form of an audit, along with fines and back payments. There’s a steep learning curve, and trying to go it alone can lead to costly errors along the way.

Even the Basics Aren’t Basic

On its face, one of the simplest parts of Canadian payroll tax calculations is determining the appropriate withholdings. There are even payroll tax calculators that can be of great assistance in making these calculations. Unfortunately, no calculator can tell you if you’ve classified your employees correctly, if all of their paperwork is in order, or if any circumstances exist that could change the necessary calculations. Figuring out what to enter in the calculator is entirely up to you. If you get it wrong, the resulting figures will also be wrong.

Knowing the Law is Different from Understanding the Law

Reading a statute doesn’t tell you anything about how it’s being applied in the field, during audits, and in courtrooms. Once the dry text hits real life application, a world of different interpretations come into play. If you’re not dealing with these laws every day, you won’t be developing the experience necessary to understand the complex interplay between legislation and application. To compound this problem, the way the laws interact with each other can be equally complex. Knowing which law to apply in a particular situation can only be learned through experience.

Constant Change Requires Constant Vigilance

The laws governing Canadian payroll tax calculations change, at a minimum, on an annual basis. Extreme situations or legal interpretations can bring about sudden changes to the law at any time. Keeping up with current and proposed changes is difficult enough—having an ear to the ground for sudden, unexpected, changes can be impossible for someone who doesn’t deal with payroll regulations on a daily basis. Some changes have a grace period to give you time to adjust; others will require immediate changes to the way you handle Canadian payroll tax calculations.

Asking for Help when You Need It

One of the hardest parts of Canadian payroll tax calculations can be admitting that you need help. Business owners tend to want to handle as many processes as possible in-house. That’s admirable—until it jeopardizes the company. Handling Canadian payroll tax calculations on your own can spread your staff too thin, cause unneeded stress, and open you up to fines, back payments, and lawsuits. Using a payroll service provider is a quick, easy way to relieve the burden on your staff, while also minimizing your exposure to legal problems. With their experience in the payroll industry, they can give you the peace of mind that comes from knowing that you’re in full compliance with all applicable payroll regulations.

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

Topics: Payroll Tax, Payroll Service Provider, Outsourced Payroll Service, Canadian Payroll, Canadian Payroll Deductions, Payroll Tax Calculations, Payroll Tax in Canada, CRA Audit, Canadian Payroll Regulations

5 Ways Outsourced Payroll Processing Saves You Time

Posted by Stacey Duggan

|

Jan 6, 2014 9:00:00 AM

5 Ways Outsourced Payroll Processing Saves You TimeIn business, time is money. Every minute you spend dealing with payroll processing is a minute that isn’t spent on your core business pursuits. For US-based businesses paying Canadian employees, the time spent on payroll is effectively doubled. Since your US payroll system won’t work for Canadian employees, you need a second, separate system. That means double the investment of time, energy, and money. To avoid this added expense, it makes sense to use outsourced payroll processing. Aside from saving you the time of setting up and utilizing a second payroll system, outsourced payroll processing can save you time in many other areas.

1. Administrative Setup

Setting up a business in Canada is time-consuming and costly. You need to establish a business presence inside of the country, establish all of the necessary government accounts, and create a banking and insurance infrastructure. Using an outsourced payroll processing service allows you to sidestep this investment of time and money. They can operate as an Employer of Record (EOR), which is the Canadian equivalent of a Professional Employer Organization in the States. As an EOR, an outsourced payroll processing service has already met all of the legal requirements for paying Canadian employees.

2. Legal Training

Learning the Canadian employment and tax codes takes a lot of time, and a lot of commitment. As the codes change over time, additional training is a constant expense. Without a deep understanding of the laws and regulations, mistakes are almost guaranteed. When those occur, the time and expense to remedy them can be considerable. Payroll service providers deal with payroll issues every day. They provide services to a wide variety of industries, so there aren’t many situations that they don’t encounter on a frequent basis. To deal with those situations, their staff is constantly training, attending workshops, taking continuing education classes, and meeting with auditors and inspectors.

3. Software Setup and Training

Once you have more than a handful of employees, it becomes impractical to try to handle payroll using a pen and paper. Payroll software is expensive, and it takes time to train employees to use it. As rules change, and software updates are issued, more training becomes necessary. Using a payroll service provider as an EOR saves you the time and expense of maintaining costly software. They already have the best software available, and they constantly train in its use. Instead of spending time learning software that serves a very small purpose for your company, your employees can focus on developing skills that advance your principle business endeavors.

4. Error Checking

Going over timesheets and invoices can take a considerable amount of time. If any errors are made, even more time is necessary to find and remedy the mistake. A payroll service provider has the software and experience to avoid mistakes in the first place, and uncover them quickly on the rare occasions when they occur. Since a payroll service provider has a large number of employees trained to handle payroll, there are more sets of experienced eyes going over your payroll numbers. This greatly reduces the chances of any mistakes slipping through the cracks.

5. Audit Prevention

Mistakes cost time to fix and, if they lead to an audit, cost time spent dealing with multiple bureaucracies. Collecting paperwork, meeting with officials, and sitting through hearings don’t help advance your business. The best way to deal with audits is to avoid them in the first place. Payroll service providers are experts at identifying and fixing any red flags in your paperwork that could lead to an audit. With their help, you can make sure that all of your paperwork passes muster.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing, Payroll Service Provider, Outsourced Payroll Service, Canadian Payroll, Canadian Payroll Deductions, Canadian Payroll Regulations, Canadian Payroll Service, Payroll Calculator, Paying Canadian Workers

How American Companies Avoid Fines Paying Canadian Workers

Posted by Stacey Duggan

|

Jan 2, 2014 9:00:00 AM

How-American-Companies-Avoid-Fines-Paying-Canadian-WorkersFor a US-based business, paying Canadian workers is no simple matter. Some companies erroneously believe that all they need is a currency converter to start paying Canadian workers. If that were the case, every US company would be operating on both sides of the border. Unfortunately, despite the cultural similarities, the US and Canada don’t share very much when it comes to employment and payroll laws. The Canadian system is so different from the US system that there is virtually no overlap. For companies wishing to operate on both sides of the border, this presents a unique set of challenges. Paying Canadian workers without meeting those challenges can result in substantial fines and penalties. There are really only two legitimate ways to pay Canadian workers while avoiding those fines and penalties.

Become a Canadian Payroll Expert

If you choose to go it alone, you, or someone in your company, needs to learn everything there is to know about Canadian employment and payroll regulations. Federal and provincial laws are incredibly intricate, with a lot of subtleties that are learned only through years of experience. They are also in a state of constant evolution. This year’s rules and regulations can be substantially different from next year’s rules and regulations. Some policy changes can roll out at completely random times during the year, requiring you to keep up with possible changes every day of the year. Once a policy is in effect, you’re responsible for abiding by it, whether you know about it or not. If you fall behind on your studies, or miss an announcement from one of the many agencies you’ll be dealing with, you’ll be on the hook for any penalties.

Hire Canadian Payroll Experts

Canadian payroll service providers are experts at paying Canadian workers. In fact, it’s something they do all day, every day. They are constantly learning the new laws and regulations, and how they apply to the many different worker classifications and scenarios. They have the newest software and technology to streamline payroll services for maximum efficiency at minimal expense. If you’re interested in paying Canadian workers legitimately, and without the risk of fines, you should consider hiring a Canadian payroll service provider.

Canadian payroll service providers like The Payroll Edge operate as Employers of Record (EORs) within Canada. These fulfill the same functions as Professional Employer Organizations (PEOs) in the US.

Instead of becoming, and remaining, and expert on Canadian payroll law, you can simple hire a Canadian payroll service provider to act as an EOR. They’ll handle all of your hiring, management, payroll, and compliance, without you having to spend all of your free time studying foreign payroll legislation.

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

Topics: Payroll Service Provider, Canadian Payroll, Canadian Payroll Deductions, Canadian Payroll Regulations, EOR, Professional Employer Organization, Canadian Payroll Service, PEO, Canadian Employer of Record, American Business in Canada, Paying Canadian Workers

The Easiest Way to Manage Canadian Payroll Regulations

Posted by Karen McMullen

|

Dec 30, 2013 10:30:00 AM

The Easiest  Way to Manage Canadian Payroll RegulationsManaging Canadian payroll regulations can be as difficult, or as simple, as you want. Like most business leaders, you probably have a penchant, and preference, for getting things done yourself. You like the hands-on approach, and don’t delegate tasks unless you have to. On the other hand, when it is time to delegate, you choose the best person for the job, and let them do the job you chose them for. If you’re trying to navigate Canadian payroll regulations, then you have the same two basic options. You can try the hands-on approach, and focus all of your time and efforts on learning a completely foreign system from the ground up, or you can delegate the task to somebody who already knows the Canadian payroll regulations. The route you choose will largely depend on how much money and effort you are willing to invest, and how quickly you need results.

Many, Many Steps to (Hopefully) Success

Before you start hiring and paying Canadian employees, there are quite a few steps you have to take. U.S. and Canadian payroll regulations are entirely different creatures. Your existing system for managing and paying employees simply won’t work with Canadian employees. You’ll need new software, new filing systems, and new (or completely retrained) staff before you get started. This will all be in addition to your existing payroll system and personnel.

Once you have a second payroll system up and running, you can move on to step two—setting up a business presence inside of Canada. This can be challenging in itself as registration procedures are different from province to province and have different rules depending on the type of registration you would like.

At this point, you need to set up all of your government taxation accounts, register with worker’s compensation and arrange banking and insurance infrastructure.

Now you’re ready to hire your first employee. You’ll have to verify their identity, establish their right to work, ensure that they’re properly classified, and provide any required training. If you’ve completed all of these steps without making a single error, your new employee is ready to start their first day at work.

At this point, you’ve expended a ton of money and energy just getting your first employee on board. If you made any mistakes, the amount of time and money spent probably increased exponentially. If you make any mistakes in the future, there will be more expenses to deal with.

A Line on Success

The ability, and willingness, to delegate is a powerful business skill. Too many business leaders stray far outside of their zone of expertise and end up needing help to find their way back. Delegating difficult or time-consuming tasks to a more experienced professional is the better business decision. When it comes to managing Canadian payroll regulations, delegating the tasks to a Canadian-based Employer of Record (EOR) minimizes effort, expense, and risk.

Some Canadian payroll service providers (like The Payroll Edge) are already set up to act as full-service employers for Canadian workers by providing EOR services. They have established all of the necessary accounts and infrastructure, and cleared all of the administrative hurdles. All that is required to put them to work for you is a telephone call. Instead of spending months, and a small fortune, establishing a Canadian presence, you could spend a few minutes on the phone and be up and running in hours or days.

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

Topics: Payroll Service Provider, Outsourced Payroll Service, Canadian Payroll, Canadian Payroll Regulations, EOR, Employer of Record, Payroll Deductions, Dependable Payroll Service, Payroll Regulations, Canadian Employer of Record

Subscribe to Email Updates

Recent Posts

Posts by Topic

see all