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Why You Should Use an Employer of Record for Payroll

Posted by Karen McMullen

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Sep 5, 2016 9:00:00 AM

Why-You-Should-Use-an-Employer-of-Record-for-Payroll-1.jpgLike nearly any element of your business, you need to achieve balance with your payroll department. You want the quality that comes with hiring full-time staff, but you may not be able to afford the salaries that come with it. Similarly, you may try to save money by working with a small group of professionals or incorporating these duties into your other responsibilities. But you might find that you have less time to focus on more important aspects of your company, and costly errors might start popping up. How can you get the best of both worlds? 

If you hire an employer of record for payroll, you’ll get efficient service at a fair price. These organizations are often used to hire new clients, but through a limited agreement, they can be used for payroll management alone. They offer a heap of benefits to their clients and often feature flat monthly fees with no surcharges or hidden costs, so you can accommodate them in your budget easily. Read on to learn about the ways in which an employer of record can take any payroll burden off of your business.

You’ll Have Payroll Experts on Your Side

You need to know what you’re doing when you work with a payroll. Processors have to do everything from remitting taxes to managing employees’ paycheques and deductions. With so many responsibilities, it’s easy to make a mistake that can devastate your company. For example, if you fail to provide your organization’s taxes to the Canada Revenue Agency (CRA) by a given deadline, you may have to pay up to an additional 10 percent of the amount already owed. This also doesn’t include a monthly interest rate of an additional two percent, so if you fail to follow the proper regulations, it could cost you dearly. Regulations and guidelines also change frequently, so you may be completely obedient to every necessary regulation one year and in severe violation the next.

With an employer of record for payroll, you’ll never have to face this type of penalty. These organizations are staffed by professionals who know everything necessary about filing taxes, applying deductions, and more. Even as regulations change, these experts stay on top of every shift and amendment, ensuring you remain compliant. They are also wholly devoted to payroll operations, with staff that handle all aspects of the process. As a result, you get the advantages of a full-time team that is wholly devoted to your organization without having to pay for multiple salaries.

They Conserve Resources

Saving time and money with an employer of record isn’t just a one-time occurrence, though. With proven professionals on your side, you’ll be able to make the most out of nearly every aspect of your payroll. Employers of record often make their names by giving their clients extra services, so you can easily find one that will handle other aspects of your business such as human resources. Furthermore, these companies work with many different organizations, and the size of their client pool allows them to bargain for better rates on benefits. As a result, you’ll save in more ways than you thought possible if you team up with an employer of record.

They Eliminate Misclassifications

Since independent contractors work independently without receiving benefits, companies tend to hire them frequently. However, if you assign the duties and restrictions of a full-time employee to these workers, you could quickly find yourself in hot water with the CRA. Employers of record ensure this won’t happen to your business. They know the regulations that apply to independent contractors and employees, so they’ll ensure that your workers are classified and paid properly.

7 Signs It's Time to Outsource Payroll

Topics: Employer of Record Services

Can You Use an Employer of Record for Payroll?

Posted by Stacey Duggan

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Sep 2, 2016 9:00:00 AM

Can-You-Use-an-Employer-of-Record-for-Payroll.jpgWhen people think of employer of record services, they tend to focus primarily on human resources. After all, these organizations are commonly used to outsource hiring practices and manage employees. But many may not know that many of these practices also make employers of record valuable for organizations looking to better manage their payroll departments. Since they negotiate for so many employees, an employer of record can get better deals when bargaining for benefits. They’re also more cost-effective than hiring a full-time payroll staff, and take many responsibilities off of companies’ shoulders. 

So if you find yourself overwhelmed with the ins and outs of your payroll and need a solution, employers of record may be right for you. This article will outline the basic benefits of partnering with these organizations. By the end, you should know whether an employer of record for payroll will suit your unique business needs.

You Save Time

Beyond costing you money, keeping your payroll department in-house means that you’ll need to devote a lot of time to staying ahead of the curve. When you have to learn about existing regulations, stay up-to-date on new ones, gather all the relevant information, and actually carry out tasks, managing payroll can begin to feel like you’re constantly pushing a boulder up a hill. 

With an employer of record for payroll, though, you can avoid this time suck and focus on what’s most important to your company. These tax and payroll professionals have already honed their knowledge of existing regulations, and their shared practices ensure they’ll be able to adapt to any new amendments or changes. As a result, they won’t have to waste time learning about laws and can instead devote those extra hours to making sure that your information is accurate. As a result, you’ll have a more organized, functional payroll thanks to an employer of record.

Dealing with the Canada Revenue Agency Becomes More Manageable

Working with the Canada Revenue Agency (CRA) can be an intimidating experience. You need to provide them with accurate information that meets all of their rules within tight deadlines. If you fail to do so, you can receive fines so heavy that they may put the long-term viability of your business in jeopardy. So how do you manage these harsh expectations?

You don’t have to. Employers of record are accustomed to interacting with the CRA, so they know the necessities and best practices necessary to make your filings as easy as possible. Since they’re devoted to your payroll full time, they aren’t as likely to miscalculate your taxes and employee deductions as a small payroll department. They are also aware of any deadlines, so your company will never have to pay late penalties or other fees. Finally, they know the criteria that dictate whether an employee is an independent contractor or a full-time worker, so you’ll never have to suffer the penalties, investigations and potential lawsuits that misclassification brings.

You Work with Professionals Who Know What They're Doing

Every business has its own unique quirks and specialties. It’s what makes them appeal to their specific audiences and enables them to carve out a niche. But they can also result in payroll and tax problems that other organizations don’t commonly face. Therefore, someone with a basic understanding of payroll rules may not understand how to fix these distinctive issues. An employer of record for payroll offers a field of knowledge that is both broad and deep, so you can trust that your company is in the right hands, no matter what problem may emerge.

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

Topics: Employer of Record Services

4 Reasons Companies Use Employer of Record Services

Posted by Karen McMullen

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Aug 19, 2016 9:00:00 AM

4_Reasons_Companies_Use_Employer_of_Record_Services.jpgPayroll services are an essential part of any business, but they require a great deal of time and money to maintain correctly. As a result, companies of many different sizes and industries outsource their payroll requirements to employer of record services (EORs). These organizations, also known as professional employer organizations (PEOs), handle bookkeeping, taxes, and matters relating to employee payment, such as the Canada Pension Plan (CPP) and employment insurance, in addition to many other tasks.

Hiring an EOR can help you maximize efficiency in your enterprise and keep resources from going to waste. Here are four ways employer of record services can help your company continue to run smoothly.

1. Manage Resources Better

Companies must make the best use of their resources to remain sustainable for the long term. But this can be difficult when it comes to managing payroll departments. If you hire a full-time staff, you’ll have to sacrifice a significant portion of your business’s money. But if you try to do it yourself or work with very small teams, you could potentially compromise the quality of the work, which would lead to even costlier fines. Using an EOR can help mitigate these losses, since they offer both proven experience and flat, affordable monthly rates.

2. Follow Regulations

Following payroll regulations is easier said than done sometimes. Enterprises must account for rules governing vacation pay, overtime, workers’ compensation, and more. Policies differ from province to province, so companies that work on a national level may find it difficult to keep track of all the different guidelines. Organizations like the Canada Revenue Agency (CRA) also update their regulations frequently, so laymen may struggle to stay abreast with each new policy. 

Furthermore, enterprises that fail to meet these requirements often have to pay steep penalties. For example, the CRA can charge a fine of up to 10 per cent of a business’s annual income if they fail to file their taxes on time. In addition, they can charge up to two per cent of the outstanding balance every month until those taxes and any accrued interest are paid in full. Making mistakes on taxes or payroll can be extremely detrimental to a business’s ongoing sustainability. EORs hire professional staffers that are well-versed in existing policy, eliminating the legwork for employers.

3. Move into New Territories

Opening your products up to new markets can be crucial to growing your business. But poor payroll practices could stop your enterprise’s progress dead in its tracks. To set up shop in a new country, businesses often have to obey new regulations with which they may not be familiar. With new insurance and banking policies to sort out, companies are often too busy to handle payroll services. An EOR can complete much of the administrative and regulatory work that comes with hiring new employees in new territories.

4. Prevent Employee Misclassification

Businesses are increasingly relying upon independent contractors to complete day-to-day operations. These workers are technically self-employed, and don’t require direct supervision or guidance from an employer in the same way that full-time staffers do. Therefore, regulations governing these workers’ employment insurance, CPP, workers’ compensation and other benefits are much different. If your organization misclassifies a full-time employee as an independent contractor or vice-versa, they may not receive the benefits to which they are technically entitled.

As a result, the CRA maintains an unforgiving attitude toward organizations that misrepresent the status of their workers. Penalties can be steep and often incur interest, which can make a devastating dent in a company’s finances. Misclassification also exposes companies to potential lawsuits from the aggrieved employees, plus investigations into the misconduct. EORs can ensure your employees are properly classified, eliminating any possibility of having to pay these harsh sanctions.

7 Signs It's Time to Outsource Payroll

Topics: Employer of Record Services

Employee in Ontario? Changes to ESA to Safeguard Families

Posted by Karen McMullen

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Jun 11, 2014 9:32:00 AM

Gavel American and Canadian Employment Law resized 600The Proposed Bill 21 “The Employment Standards Amendment Act (Leaves to Help Families) 2014” passed legislation on April 29, 2014 and will take effect on October 29, 2014. This new minimum standard set by the ESA will entitle Ontario workers to three new job protected leave of absences:

Family Caregiver Leave

All Canadian employees, regardless of their length of employment will be eligible for up to eight weeks per calendar year to provide care and support to a family member including children, siblings, parents and grandparents.  Family members must be certified as having a serious medical condition by a qualified health practitioner (physicians, nurses and psychologists). The eight weeks of leave will apply to each family member described in the section and does not have to be taken all at once.

Critically Ill Child Care Leave

Canadian employees who have been employed for at least six consecutive months will be eligible to take up to 37 weeks of unpaid leave to provide care or support to a critically ill child of the employee (again as certified by a qualified health professional). Employees who are eligible for this leave may also be qualified to receive Employment Insurance benefits from the federal government (known as special benefits for Parents of Critically Ill Children) for the duration of their leave. As with the Family Caregiver Leave, written notice must be provided to the employer and the employer is entitled to request a copy of the certificate that qualifies the employee for the leave.

Crime-Related Death or Disappearance Leave

Canadian employees who have been employed for at least six months and have a child who dies and it is probable, considering the circumstances, that the death was the result of a crime, are eligible for up to 104 weeks of leave. In addition, where it is probable that an employee’s child has disappeared as a result of a crime, that employee would be entitled to a leave of up to 52 weeks. Similar to the Critically Ill Child Care Leave, employees may also be eligible to receive income support from the federal government in the form of a grant called ‘Support for Parents of Murdered or Missing Children’.

American and Canadian employers should update their existing employment agreements with their workers in Ontario to reflect and comply with the changes when they take effect in October, 2014.

If you are a U.S. or foreign company looking to hire in Canada, consider an Employer of Record service (similar to an American Professional Employer Organization).  The EOR service offered by The Payroll Edge takes on the responsibility of taxation, payroll, and government compliance for employees in Canada so you can service your clients in the north without the hassle of understanding  foreign policies. 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: Employer of Record Services, Employer of Record, ESA, ESA Compliant, Ontario, American Business in Canada, Bill 21

How an Employer of Record Can Help Your Company

Posted by Stacey Duggan

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Jun 4, 2014 9:05:00 AM

how an employer of record can help your companyAn Employer of Record (EOR) has a lot to offer your company. The services they offer can save you time, save you money, and streamline your processes. Whether you’re a US firm expanding into Canada, or a Canadian firm looking to simplify, there are numerous ways that an employer of record can help.

Save You Time

Complying with Canadian employment and payroll laws isn’t a one-time event. You have to maintain compliance, regardless of how often the laws and regulations change. That means you need to spend time learning about recent and future changes, and update your compliance processes accordingly. Some of those changes may require a complete update to some of your business processes. You may have to upgrade your existing software, or buy entirely new software to keep up with the changes. It will take time to source and implement any changes, and it will also take time to train your staff on the changes.

An Employer of Record can handle continued compliance for you. They already keep abreast of any changes, and they constantly train to deal with new compliance issues. An Employer of Record also has the latest software and, if an update is required, the expense is spread across their entire client base—meaning you’re not on the hook for the cost.

Save You Money

Time is money. The time that you and your staff spend dealing with compliance requirements is just the tip of the iceberg. Handling payroll, HR, and health and safety regulations are all time consuming endeavors. If your staff doesn’t handle those tasks on a daily basis, then they won’t have the experience to handle them quickly and accurately when they arise. The time it takes them to learn the ropes will cost you money, as will any mistakes they make along the way.

With the help of an Employer of Record, you don’t have to worry about paying for the learning curve, or paying to correct mistakes. They have the experience and training to provide the services you need with speed and accuracy.

Keep You Focused

Using your own staff to handle employment, payroll, and compliance needs draws them away from your core business pursuits. Every minute they spend learning to deal with these tangential tasks is a minute that they’re not working to make you money. If they’re switching between tasks on a daily, or even hourly, basis, they may never have the focus they need to perform at their optimum level. These extraneous tasks may not only overextend your personnel, they may actually hinder them from excelling at their everyday tasks.

An Employer of Record can take this burden off the shoulders of your personnel. They can spend their days focused on your business, and the things they need to do to help your business. Everyone has their own competencies, things that they do extremely well. Asking your staff to do a little of everything can keep them from exercising those competencies. By engaging the services of an Employer of Record, you can keep your staff focused on the things they do best.

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

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

3 Steps to Finding a Great Professional Employer Organization in Canada

Posted by Ray Gonder

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May 28, 2014 9:05:00 AM

3 steps to finding a great professional employer organization in canadaAs a US based business, you’re probably familiar with the many benefits offered by a Professional Employer Organization (PEO). A PEO gives businesses an easy way to outsource a variety of managerial and administrative tasks. These tasks are often cumbersome, and consume an inordinate amount of time and energy. For this reason, many businesses choose to have these tasks handled by a Professional Employer Organization. Using a PEO frees up your in-house staff and saves time and money better spent elsewhere. What if you need the services of a Professional Employer Organization for your Canadian locations?

Different Names, Same Services

In Canada, Professional Employer Organizations are generally referred to as Employers of Record (EOR). They provide similar services as a PEO, and are widely used by US businesses without a Canadian presence. With an EOR, you enjoy the same benefits and dependability, while also ensuring compliance with the complicated Canadian payroll and employment laws. There are several ways to go about finding a great EOR in Canada.

Surf’s Up

The internet is usually a good place to start looking for anything. You can search for EORs in the province where your Canadian worker is located. However, like anything on the internet, take what you find with a grain of salt. Reviews, good and bad, can be biased, inaccurate, or even bought and paid for by parties with a vested interest. Using the internet is a good place to get some names, but you’re going to have to do the due diligence yourself. Like any business decision, choosing an EOR shouldn’t be based solely on information found online.

Ask Around

A lot of businesses use a Professional Employer Organization in the States, and an Employer of Record in Canada. Ask your business contacts what services they use, and if they’re happy with the treatment they’ve received. This can help you narrow down your search, and organize your list with the highest recommendations at the top. If you can talk to managers of businesses that are similar to yours, you can find an EOR that has at least some experience in your particular industry.

Thorough Vetting

Once you’ve contacted an EOR, be sure to ask about recent references and industry experience. Let them know what services you’re currently receiving from your Professional Employer Organization, and what services you’ll be expecting from them. Listen to any recommendations they may have, and compare them to recommendations from other EORs that you interview. Remember, the goal isn’t to get the best price; it’s to get the best service for your money. Not all EORs are created the same, and cheaper are very rarely better.

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

Topics: EOR, Professional Employer Organization, Employer of Record Services

3 Benefits of Employer of Record Services in Canada

Posted by Stacey Duggan

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May 9, 2014 9:05:00 AM

3 benefits of employer record of service in canadaIf you are a US-based business looking into hiring a Canadian workforce, there are a number of benefits to using an Employer of Record. A Canadian EOR is very similar to a Professional Employer Organization in the United States. An EOR offers a variety of services to streamline your payroll and human resource management processes.

Streamlined Start-up

To hire an employee in Canada you must establish a business presence in order to open the various accounts needed to remit the appropriate employee and employer taxes.  Hiring someone is not as simple as finding the right person; it really does open your company up to administrative hurdles that make you re-think the hire in the first place. Employer of record services can help you bypass some of the more cumbersome hurdles you'll face. An EOR already has an administrative presence in Canada, saving you the expense of registering a business presence if you don’t need to.  They also have the necessary banking and insurance infrastructure already in place allowing you to hire in weeks, not months.

Payroll Support

Employer of record services also include payroll management. This can be one of the more cumbersome aspects of employing Canadian workers. Canada has complex payroll laws, and requirements can change depending on employee classifications. There are also remittances and contributions to government programs that have to be taken into consideration.

With the help of an EOR, you don't have to worry about learning an entirely new set of payroll laws. They can handle day-to-day payments, remittances, and contributions for you. With their help, you can rest assured that your employees will be paid correctly, and legally.

Continuing Compliance

Violations of Canadian payroll and employment laws can result in enormous expenses. Not only are there fines to consider, there can also be back payments and retroactive contributions. Mistakes in holiday payments, employee remittances, or employer contributions can cause you to face huge penalties. And, given the convoluted nature of Canadian laws, these mistakes are all too easy to make.

An EOR also acts as your HR department in Canada ensuring that you are in complete compliance when it comes to employment standards. Should a claim arise, the employer of record will deal with the issue in accordance with Canadian law which can differ greatly from an employment law suit typically seen in the U.S. An EOR is familiar with the nuances of Canadian employment therefore can act quickly and efficiently ensuring that all parties’ best interests are met.

Using a Canadian Employer of Record service is an excellent way to expand your business offering across the border without the complication of having to register a business presence and having to understand a set of employment regulations in a foreign country.

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

Topics: EOR, Employer of Record Services, U.S. Business operating in Canada

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