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4 Things American Companies Should Know about Paying Canadian Employees

Posted by Corinne Camara

|

Apr 11, 2018 9:00:00 AM

4-Things-American-Companies-Should-Know-about-Paying-Canadian-Employees-compressor.jpgMany American companies have operations in Canada. In this day and age, many have Canadian employees, even if they don’t necessarily have Canadian operations. Whether you’re thinking about expanding into Canada, debating hiring a Canadian as the perfect fit for a new role, or have had a long-standing operation in Canada, you probably still have questions about paying these cross-border employees. 

12 Things an American Company Looking to Pay a Worker In Canada Needs to Know

Paying Canadian employees can be convoluted, but it doesn’t need to be difficult. Here are a few things American companies should keep in mind when it comes to paying their Canadian employees.

1. The Paperwork Might Look Different

For your American employees, you likely issue a W-2. If the person is a contractor, you may need to issue a 1099. There are a number of different forms depending on how the employee is classified, how they’re taxed, what benefits you offer, and so on. 

You shouldn’t be surprised to hear there’s paperwork for your Canadian employees. It also shouldn’t be shocking to discover the paperwork might be different. If you’re hiring the person on as an employee, you’ll still need to issue a W-2. In some cases, such as when the person can claim treaty benefits, you may need to issue different forms. 

You should always check with the IRS or with a knowledgeable employer of record (EOR) to find out what forms you need and when you need to issue them by. Filing the right paperwork to start simplifies the rest of the process.

2. Think about Exchange Rates

Right now, the US dollar is valued higher than the Canadian dollar. You can buy more Canadian dollars with a single US dollar. This might tempt American companies to pay their Canadian employees in Canadian dollars. 

This can lead to complications with the exchange rate as the value of the Canadian dollar goes up and down. Why does it matter? You could end up paying Canadian employees more or less every month. If you pay an employee $3,500 Canadian per month, you’d need to pay them $2,700 in March 2018. In January 2018, this same amount Canadian would have cost you $2,800 US

Many American companies find it easier to pay their Canadian employees in US funds since they don’t need to worry about differences in currency valuation.

3. Proper Withholding Can Be Complicated

Payroll tax withholding can be a bit challenging to figure out for your American employees. For your Canadian employees, it can be a whole other ball game.

Canada and the US have treaty agreements to avoid double-taxation, meaning your Canadian employees will most often pay taxes in Canada and not in the US. Their income is subject to Canadian payroll tax legislation. This can vary by province, so American companies need to pay attention to the rules where they operate or where their employees live and work.

In some cases, employees may be exempt from paying tax. In other cases, they might be required to pay tax in both Canada and the US.

As you can see, payroll withholding and taxation for Canadian employees working for American companies can become quite complicated. If you’re not sure, consult with the experts. They’ll be able to steer you in the right direction.

4. It Can Be Easier

These are just a few of the problems American companies frequently encounter when they need to pay Canadian employees. There are more.

If you’re feeling overwhelmed or unsure about the best way to go about paying your Canadian employees, consider partnering with a Canadian employer of record. They can help you navigate the tricky waters of cross-border payroll and taxation.

What US Companies Need to Know about Paying Employees in Canada

Topics: Payroll Processing

Here’s How to Avoid the 4 Most Common Payroll Mistakes

Posted by Ray Gonder

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Apr 9, 2018 9:00:00 AM

Heres-How-to-Avoid-the-4-Most-Common-Payroll-Mistakes-compressor.jpgPayroll is a fact of life for every business owner and HR manager. You have to pay your people, no matter what industry you’re involved in. Since the activity is so common, mistakes are also fairly common. 

Some payroll mistakes happen more frequently than others. You shouldn’t be too alarmed if you see any of the following. Mistakes happen to even the best professionals from time to time. What you should do is take corrective action. Luckily, it’s easy to avoid all four of these common payroll mistakes.

Download "What Are You Leaving to Chance By Handling Payroll on Your Own" Guide

1. Misclassifying Employees

This payroll mistake often happens at the start of someone’s employment with your company. When you hire them on, you’ll be required to classify the employee for payroll and taxation purposes. Are they a full-time employee, a temporary worker, or an independent contractor? 

Employers frequently make mistakes when it comes to categorizing their employees. The most common error is classifying someone as an independent contractor when they are, in fact, an employee. Some employers may even do this purposefully. 

How can you avoid this common payroll mistake? It’s easy! Make sure you’re classifying your employees correctly from the time they’re hired. Review the terms of their employment and compare the definitions used by the CRA and in provincial legislation. If you’re still unsure, you can ask the experts.

2. Miscalculating Taxable Employment Income

You probably know you need to calculate employment taxes on your employees’ salaries. What about the rest of the compensation you provide? For example, vacation pay is also taxable.

Other benefits become more complex, so you may want to keep a list of what’s considered taxable income and which benefits are taxable. One taxable benefit employers frequently forget is reimbursement for an employee’s personal expenses. Did you help an employee with the costs of relocating? If you provided compensation for work-related travel, it’s considered taxable income. 

How can you avoid making this common payroll mistake? The easy answer is to check out what the CRA classifies as taxable income. It keeps a list on its website. If you’re still not sure, you can always contact your employer of record (EOR). 

Check out the tax implications before you offer any new benefit. Not only will this help you determine the true cost of offering the benefit but it will also help come tax time.

3. Missed Deadlines

The CRA maintains different schedules for different types of remitters. Very few businesses only need to report and remit their taxes once per tax year. While you might still find yourself in a flurry of year-end taxes come April, you should probably keep an eye on additional deadlines the CRA may have set.

Missed deadlines are a common payroll mistake, but they can be costly. How can you avoid them? The best way is to keep the calendar handy. You may program your payroll software to remind you about upcoming deadlines. Don’t forget to schedule extra staff or talk to your payroll provider about your deadlines.

The easiest way to avoid this error is to partner with an employer of record in Canada. They’ll keep your deadline schedule handy and work to ensure all of the due dates are met.

4. Believing You Need to Go It Alone

This particular error isn’t like the other payroll mistakes on this list; the CRA won’t give you a penalty or audit you if you don’t partner with an EOR or get a helping hand with your taxes. That is, so long as you do everything correctly.

Not working with an EOR for payroll often leads to other payroll mistakes. In turn, you may be assessed penalties and audited by the CRA. The easiest thing to do is team up with someone who knows the ropes. You can avoid common mistakes and make administering payroll so much simpler.

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

Topics: Payroll Processing

Do You Have to Register for a GST Account When Paying Canadian Employees?

Posted by Shannon Dowdall

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Mar 14, 2018 9:00:00 AM

Do-You-Have-to-Register-for-a-GST-Account-When-Paying-Canadian-Employees---compressor.jpgOne of the complexities of operating in Canada is needing to know the ins and outs of taxation for your employees. The Canada Revenue Agency handles import and export fees, payroll taxes, and sales tax remittances from Canadian businesses and foreign businesses operating in Canada alike. 

If you’re not Canadian, however, the idea of sales tax may be somewhat confusing. The CRA isn’t particularly clear on who needs an account to handle sales tax either. Many business owners and managers alike ask whether or not they need a GST account when they need to pay Canadian employees.

Download "What Are You Leaving to Chance By Handling Payroll on Your Own" Guide

What Is GST/HST?

In Canada, the federal government levies a five percent sales tax on goods and services. This is known as the “general sales tax” or GST

Most provinces (with the exception of Alberta) also have a sales tax. This is sometimes known as the “provincial sales tax” (PST). In provinces where the CRA is responsible for both, the tax is combined and is known as a “harmonized sales tax,” or HST. 

Depending on which province you operate in, you may be required to collect PST in addition to the GST. Provincial rates vary. For example, in Ontario, the provincial portion of the tax is 8 percent. The HST rate is thus 13 percent.

When Is GST Charged?

GST is applied to most sales of goods and services. If you deliver a good or a service to a client on Canadian soil, you’ll likely need to charge them GST/HST on the purchase. There are some exceptions. For example, food products deemed “necessities” do not have GST/HST applied to them. 

Foreign clients, such as those operating in the US, will not be charged GST/HST, since the service or good is deemed to have been delivered on foreign soil. 

The other major exception is the size of your business operation. If your business earns under $30,000 Canadian per year, you are exempt from collecting HST/GST from your clients. If your business income exceeds $30,000 per year, you’ll be automatically registered and required to collect GST/HST.

Why Collect Sales Tax?

Some business owners opt to register for and collect HST/GST even if their revenue is under $30,000. At the end of the year, you can use any HST/GST you’ve paid out on your business expenses as “credits” against what you owe the CRA. As a result, you may not need to pay all of the HST/GST you’ve collected.

While you can still use HST/GST credits if you don’t collect HST/GST, having those funds sitting in an account earning interest is considered a wise business plan by some. It’s also a good idea if you suspect you may exceed the $30,000 limit.

Does It Affect Payroll?

The simple answer here is no. GST/HST is a sales tax, not a payroll or income tax. As a result, you do not need to register for a GST/HST account to pay your employees in Canada.

What you do need to do is register for a federal business number so you can remit payroll taxes to the CRA. The CRA uses this number to assign your business import, export, payroll, and GST/HST accounts. When you register for your federal business number, the CRA may automatically set up a GST/HST account for your business as well.

It’s important to remember you do not need to collect GST/HST unless you’re making more than $30,000 per year. If you are or suspect you will, go ahead and collect HST/GST from your clients. If you don’t, you don’t need to pay the CRA GST/HST, and you won’t need to use the account, even if they did create one.

It’s easy to see how the intricacies of the system can become confusing! If you’re still not sure, talk to a Canadian Employer of Record today. They can help you sort out what you need to do.

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

Topics: Payroll Processing

Try Our 2018 Canadian Payroll Calculator

Posted by Stacey Duggan

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Mar 9, 2018 9:00:00 AM

Try-Our-2018-Canadian-Payroll-Calculator---compressor.jpgTax season has arrived! As you busily prepare your return for the 2017 year, your thoughts may have already turned to how you can better prepare for this year. If your bookkeepers are flustered and overworked as they scramble to get your 2017 tax return in order, they’ve no doubt wondered if there’s an easier way to do things. 

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

As the old saying goes, an ounce of prevention is worth a pound of cure. Instead of trying to fix everything at the end of the year, you’re thinking about how you can get it right out of the gate instead. Wouldn’t it be wonderful if you could be sure you were calculating and collecting the proper payroll taxes and calculating vacation pay properly? 

You can! Give the updated 2018 Canadian payroll calculator a shot.

Updated CRA Rules

As with almost any government revenue department, the Canada Revenue Agency (CRA) updates its rules and processes on an almost yearly basis. This reflects changes in legislation, which then affect how businesses are to administer payroll and what withholdings they need to collect. 

Sometimes, legislation changes are the result of new government bills being passed into law. In other cases, the changes result from provisions in laws already on the books, which see increases (or decreases) over time. 

New tax credits come and go, and income tax rates change. You should always check in with the CRA or your Canadian PEO to find out about the latest changes and updated rules to make sure you’re up to date.

Changes in the Business

The other issues complicating payroll are the changes within your own business. Employees get raises or are promoted and end up in new tax brackets. Someone accrues more vacation days or more sick days because of the length of their tenure with your business. You may decide to offer a benefit or restrict your existing plan. All of these changes can affect your payroll and the withholdings you need to collect. 

You might also change your operations. Maybe you’re hiring temporary or seasonal employees for the first time. Maybe you’ve just expanded your operations from Ontario into British Columbia as well. You have lots to learn.

Why Use a Canadian Payroll Calculator?

With so many different things to keep track of, from CRA rules to expansions in your business itself, you might wish there was a tool to help you.

The good news is there are tools available. Payroll calculators were created to help business owners and accounting professionals keep things straight when it comes to figuring out payroll and withholdings. A Canadian payroll calculator in particular helps you keep track of payroll deductions for each of the 10 provinces and three territories.

Calculators come with pre-set functions. You input the information, such as the employee’s hours, their rate of pay, and where they work, and the calculator will do the rest. The best calculators ask for more information, but even the most basic can give you a quick check to ensure you’re on the right track with payroll.

The 2018 Update

As useful as calculators are, they’re not much help if they’re outdated. It’s why you need to give the new 2018 Canadian payroll calculator a whirl. If you’ve been using the 2017 calculator, you may be surprised to find just how much has changed between last year and this year.

What changes are there? You can take a look at the CRA’s website for a comprehensive listing of all the changes to the tax regime in Canada. The updated 2018 calculator reflects all of these changes, which will help you estimate payroll more accurately. Better estimates mean fewer errors to correct and less scrambling later on.

Try the new 2018 Canadian payroll calculator for yourself! Your accounting and HR staff will thank you.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Processing

How American Companies Pay Seasonal Canadian Employees

Posted by Ray Gonder

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Mar 7, 2018 9:00:00 AM

How-American-Companies-Pay-Seasonal-Canadian-Employees---compressor.jpgIn today’s competitive business market, companies need to be fleet of foot, able to navigate changing market conditions in the blink of an eye. The environment rewards those who can scale their operations quickly. 

It’s one of the reasons more and more companies are hiring seasonal employees. With seasonal hires, you can bring someone on board when you most need their help. The tourism industry provides a great example. When the summer weather brings tourists out in droves, you may need additional people to keep up with demand! When the rush slows down again, however, you may not need as many people. Seasonal employment helps you deal with these changing tides. 

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

For American companies, however, paying seasonal employees in Canada can be tricky. There are many different rules you need to consider when it comes to hiring and paying seasonal Canadian workers.

Going It Alone

Many American firms decide to pay their seasonal Canadian employees on their own. They may add these employees to their usual payroll roster. After all, they have an HR department full of experts who know how to administer payroll! 

This is usually where problems begin to arise. Canadian law is different than American law, and employment law around seasonal employees varies by province. If you employ seasonal workers in British Columbia, Ontario, and Nova Scotia, you’ll need to learn three different sets of rules to pay all of these workers. 

The subtle differences in the regulations can trip up even the most experienced payroll administrator. Unfamiliarity leads to mistakes, which can lead to bigger problems later on.

The Trouble of Currency

Another issue American firms looking to pay seasonal Canadian employees run into is the problem of currency. While most Canadian workers would gladly accept payment in American dollars, this could cause headaches for your accounting. Fluctuating exchange rates could mean someone’s wage is higher one month and lower the next. 

If you have these Canadian workers in seasonal employ, however, you may not want to switch to paying them in Canadian dollars. Some American firms who pay Canadians on the regular will keep separate bank accounts stocked with Canadian currency. If you’re only paying people seasonally, this may not be the best solution for your firm.

Hiring Help

One of the best ways for American companies to go about paying their seasonal Canadian workers is actually to team up with a Canadian employer of record. An employer of record is based in Canada, which means they can easily navigate the issues of currency and separate bank accounts.

They’re also much more familiar with Canadian payroll legislation, including the differences between provinces. They’ll have a better understanding of laws around seasonal employment and payment in British Columbia and how those rules differ from those in Quebec than your own HR staff.

Finally, since the company is based in Canada, they can also streamline the payroll process for your Canadian employees.

More Advantages

Simplifying the payroll process and making the payment of Canadian employees easier are just some of the major benefits a Canadian employer of record offers to American firms. There are other benefits too.

One of the biggest is actually getting payroll done correctly each and every time. Both you and your employees will appreciate error-free payroll administration. It also helps you avoid problems with the Canada Revenue Agency. Finally, your employees will also be paid on time, in addition to being paid correctly.

If this sounds like a win-win situation for everyone involved, it’s because it is! A Canadian employer of record makes paying your seasonal Canadian employees a breeze. Don’t leave things to chance by administering payroll on your own. Instead, talk to a Canadian employer of record and find out how they can assist you.

What US Companies Need to Know about Paying Employees in Canada

Topics: Payroll Processing

Confused about Canadian Payroll Rules? 5 Tips from the Experts

Posted by Karen McMullen

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Mar 5, 2018 9:00:00 AM

Confused-about-Canadian-Payroll-Rules-5-Tips-from-the-Experts---compressor.jpgYour HR team administers payroll for your Canadian employees. Maybe they slip up occasionally, but it’s never anything too serious. You noticed an error in last week’s payroll, though, and now you’re wondering what other errors are lurking in the books. 

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

You might even be expanding into Canada for the first time, and looking at the CRA’s website is making your eyes cross. Don’t fret if Canadian payroll rules are stressing you out. Follow these five expert tips and you’ll have clear sailing ahead.

1. Check the Provincial Rules

Canada’s federal government makes the supreme law in the land, and the Canada Revenue Agency is a federal institution. CRA is primarily responsible for the execution of federal tax law, but it also handles provincial tax. As a result, CRA handles most payroll- and tax-related activities. 

You might think you only need to look at federal law, but employment law is actually a provincial responsibility. Tax rates vary between provinces, as do rules and regulations around vacation time, holidays, and paid leave, among others. 

You’ll need to check the provincial regulations in order to be sure you’re administering payroll correctly. Always be sure you’re looking at the law for the correct province. Knowing how  vacation pay is calculated in Saskatchewan won’t help you if your employee is located in Ontario.

2. Use a Payroll Calculator

One of the best things you can do is adopt a Canadian payroll calculator to help you estimate your payroll taxes and withholdings. The calculator won’t necessarily explain Canadian payroll rules step by step, but it will do the math for you. 

Be sure you’re using an up-to-date calculator for 2018. Better estimates mean fewer mistakes, which cause fewer headaches later on.

3. Get a Helping Hand

If Canadian payroll rules leave your head spinning, don’t feel you need to do it all on your own. In fact, this is one of the most common mistakes international companies make when it comes to Canadian payroll!

You’re likely not as familiar with the Canadian payroll regime as you are with payroll administration in your home country. That’s perfectly understandable! If you find yourself dazed, think about getting a helping hand. Canadian employers of record (EORs) can help smooth the payroll process, ensuring your employees are paid on time and correctly.

Partnering with a Canadian EOR can get you access to the expertise you need. Why struggle alone and risk making costly mistakes because you didn’t understand or weren’t aware of an obscure rule? It’s quick, easy, and much safer to work with someone who knows the ins and outs of Canadian payroll.

4. Not Sure? Ask!

If you’re hung up on some particular Canadian payroll rules, remember it never hurts to ask. In fact, it’s better safe than sorry. Mistakes can lead to costly audits and fines, and the CRA doesn’t accept “I didn’t know” as an excuse.

If you’re working with a Canadian EOR, you can always ask them about the various rules around vacation time, payroll deductions and taxes, and even how taxes on benefits are calculated. You may want to consult with them before you expand into a new province or hire seasonal or temporary workers for the first time. They can tell you the ins and outs of various aspects of payroll so you can make more informed decisions.

5. Keep Good Records

If you do nothing else on this list, be sure to keep good records! Record-keeping is governed by law in Canada, and failure to maintain records properly can result in some hefty penalties. Good records will help you if you do make mistakes or are selected for an audit.

Canadian payroll rules don’t need to be a cryptic language. In fact, with these tips in hand, you can make administering Canadian payroll correctly a painless process.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Processing

4 Crucial Ways to Improve Your Efficiency in Payroll

Posted by Corinne Camara

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Mar 2, 2018 9:00:00 AM

4-Crucial-Ways-to-Improve-Your-Efficiency-in-Payroll---compressor.jpgPayroll is a big task. While it seems like it would be relatively straightforward, anyone who’s ever been involved in administering and managing it knows it can become quite complex. It can be time-consuming as well. It’s also one of those cyclical tasks. You end one payroll cycle and immediately begin the next. It never truly “ends.”

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

Payroll can get bogged down in all sorts of small tasks and minor details, which can decrease the efficiency and accuracy of payroll. It leaves many payroll managers wondering if there are any ways to improve your efficiency in payroll.

The good news is there are! Here are just a few ways to improve your efficiency in payroll.

1. Reduce the Number of Transactions

Start with a map of your current payroll process. This allows you to see the entire process, including hand-off points, who’s doing what, and more. 

Identify decision points and where tasks are traded off between employees. Does it make sense for one employee to handle inputting the hours while another calculates vacation pay and a third handles the payroll taxes? Are there places where tasks could be combined or eliminated? Could one person handle more than one task? 

Reducing the number of transactions and hand-offs between employees increases efficiencies because employees spend less time acquainting themselves with the input. It also reduces errors, which is a key factor in improving your efficiency. The fewer mistakes you make, the less time you have to spend fixing them.

2. Eliminate Redundancies

Double- and triple-checking your math isn’t exactly a bad move in the payroll department, but are there certain tasks you’re performing over and over again? If employees are redoing work and repeating steps throughout the process, you’re losing efficiency. 

If you can’t come up with a very good reason for the step to be repeated, then eliminate the repetition of the task. It’s one of the easiest ways to improve your payroll efficiency.

3. Automate When Possible

The next generation of artificial intelligence and smart machines is already here. Machine learning and automation are on the tips of everyone’s tongues. After all, if enormous dump trucks are driving themselves around oil fields, surely you can find a way to put AI and automation to work in your office.

Think about the software you’re using. Are you scheduling in one program and doing payroll in another? Does this mean someone has to manually rekey or move information about hours worked over to the payroll program?

HR management software suites combine functions, including payroll and scheduling. You can increase your efficiency in payroll by upgrading to more powerful software solutions. With these programs in hand, you can begin automating some of the more time-consuming tasks. This leaves your employees free to focus on more complex and important tasks.

4. Partner with a Payroll Provider

One of the things slowing you down may actually be compliance or unfamiliarity with Canadian payroll. After all, legislation is different in each of Canada’s provinces and territories, and the rules are different from those in the US, the UK, or elsewhere around the globe. Your HR staff just may not be familiar with the ins and outs of Canadian payroll!

By teaming up with a payroll provider, you’re getting access to a great team with the knowledge and expertise to administer payroll for your Canadian employees. You’ll be able to maintain compliance and improve your efficiency in payroll, all at the same time.

There are many ways to improve your efficiency in payroll. These are just a few simple examples. If you’ve been hoping to make payroll easier for you and your HR staff, now you can.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Processing

Learn How to Pay International Employees and Avoid These 3 Mistakes

Posted by Karen McMullen

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Feb 21, 2018 9:00:00 AM

Learn_How_to_Pay_International_Employees_and_Avoid_These_3_Mistakes.jpgIt’s an exciting time in your growing business! You’re moving beyond borders, becoming a truly global entity. One of your next stops is Canada.

As much as this is exciting, it can also be a stressful and busy time. One of the most important things you’ll need to do will be to staff your new locations. This means hiring and training. Once your new hires are onboarded, you’ll also need to pay them.

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

Paying international employees can be fraught with confusion, especially if you’re entering this new jurisdiction for the first time. Even those who have been operating for a while may bump into these common mistakes when it comes to how to pay international employees.

Use these handy tips to avoid rookie mistakes and learn how to pay international employees.


1. Ignoring Exchange Rates

An American firm pays its employees in US dollars and its workers are likely quite happy with that arrangement. Many Canadian workers would also be happy to receive their wages in US funds, provided the US dollar is valued higher than Canadian currency at the time of payment. Neither Canadian nor American workers would likely prefer to be paid in Mexican pesos, however, so you’ll want to decide what currency to use when you decide how to pay international employees.

Some employers will want to pay Canadian workers in Canadian dollars. While this is well and fine, it can make a fine mess of things as exchange rates shift up and down over time. Your workers may earn the same amount each and every month, but an American company will see its costs go up and down with the exchange rate. Your employee’s salary could cost you a different amount each month.

What can you do instead? One easy option is to pay workers in US dollars. Another is to maintain separate accounts for Canadian and American currencies. A third option, and often the best solution, is to work with a PEO to smooth out the wrinkles.


2. Varying Laws

You may think you only need to learn Canadian federal law when it comes to employment, payroll, and taxes. This is, unfortunately, not true. Only about 10 percent of Canadian workers are actually subject to federal laws on the subject. Everyone else is subject to provincial law.

The laws vary across provinces. Even if you learn Ontario law backwards and forwards, you’ll still struggle when you try to pay your employees in BC and Manitoba. You can’t just adopt the rules and regulations of one province and apply them to employees working and living in another.

The best bet here is to work with a Canadian PEO. They can help you stay in step with provincial law across all 10 provinces and the three territories. It won’t matter if you operate in three or four different jurisdictions. The PEO is an expert and can handle the challenge.


3. Not Keeping Good Records

Different countries also have different standards when it comes to recordkeeping. You may not keep certain files or forms. It may not be legal in your country to collect certain kinds of data. The opposite is also true; the new country you’re entering may have a strict policy about the collection of personal data. Your standard forms just aren’t going to cut it.

You may be tempted to skip the record-keeping portion of payroll or declare your own forms and data collection “good enough.” This can land you in serious trouble. In Canada, the CRA can actually put you in jail for failure to comply with record-keeping standards.

Again, a PEO is your best bet when it comes to managing your records about how to pay international employees. They can help you make paying your international employees a breeze, without the administrative headache.


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

Topics: Payroll Processing

3 Tips for Finding Dependable Payroll Services

Posted by Shannon Dowdall

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Feb 14, 2018 9:00:00 AM

3_Tips_for_Finding_Dependable_Payroll_Services-1.jpgAs a U.S. or international company that’s seeking to expand business into the Canadian market, many challenges arise when looking for dependable payroll services. For American employers, the Canadian market seems so similar to the U.S. that businesses often fall short of getting all the help they need. For international employers, Canada’s ever-evolving compliance can lead to high costs for both their financial resources and reputation.

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

Finding dependable payroll services is more than just finding someone to outsource your payroll responsibilities to. In truth, the search is also about landing a payroll service provider that can help keep your foreign company abreast of any changes to Canadian business legislation—changes that could affect the growth of your business.

With the above in mind, check out below for our top three tips for finding dependable payroll services.


1. Is the Payroll Provider an Employer of Record?

The first question you need to answer to determine if you’ve found the right payroll services processor is whether they are an employer of record (EOR) or not. An EOR doesn’t just process payroll data and print cheques to order, they take over the legal responsibility of your employees—and the risks that come with that designation.

An EOR will be capable of both properly hiring and onboarding your Canadian employees, as well as ensuring your federal and provincial compliance is in order. EORs can also help you register and maintain all necessary accounts for operating a Canadian business, establish your financial infrastructure, and keep your workplace standards up to date.

Running a business in Canada isn’t as simple as opening up a branch and continuing on with your status quo. You need to become an expert in Canadian employment and taxation regulations. A payroll processor that is also an EOR will integrate with your daily operations, making managing Canadian employees simple and easy.


2. Is the Provider a Canadian Authority?

Dealing with Canadian compliance can become increasingly thorny when you don’t have a payroll services processor that can navigate the intricacies of business legislation, especially when it comes to handling official issues or queries with the Canadian government.

There’s a lot of information out there regarding proper employment practices in Canada, including what the employees’ rights are, how their benefits package should be managed, and what their wages should be. Now, take into consideration that all this information will vary from province to province and territory to territory.

Ontario, for instance, has just updated and revised its Employment Standards Act, changing standards for benefits, leave and vacation pay, the minimum wage, and more. The Fair Workplaces, Better Jobs Act, which was passed as of November 2017, has changed the game for all employers in the province whether they are local or foreign.

Your payroll processor should be a recognized authority by the Canadian government. Not only will such a processor maintain ongoing compliance, it will be capable of maintaining your credibility and great reputation as a Canadian business.


3. Demystify Cultural Variances

Finding dependable payroll services is really about finding a payroll processor that can make sense of all the cultural variances between your U.S. or international business and Canadian businesses. You need a processor that isn’t just a business you outsource the automated printing of your cheques to.

You’ll want a processor that reviews all the payroll data before those cheques are printed. A proficient processor will help you avoid any mistakes that could cost you in fines and a sullied reputation as a Canadian branch of your U.S. or international business.

Some of the best processors even have cloud-based systems to streamline payroll management, allowing you to track and review all payroll data before you send it off to be double-checked and processed.

You leave many things to chance handling payroll on your own. Landing a dependable partner for outsourcing payroll processing will ensure your Canadian business branch thrives.


7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

Have You Considered Partnering with a Canadian Payroll Provider?

Posted by Karen McMullen

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Jan 31, 2018 9:00:00 AM

Have_You_Considered_Partnering_with_a_Canadian_Payroll_Provider.jpgExpanding into the Canadian economy can look very promising to foreign businesses right now, especially with Canada’s economy taking 10th place as of 2015 as one of the world’s largest economies. While it remains to be seen if Canada will be able to breach the $2 trillion mark post-2020, the fact remains that its prospects shine brightly. It can be particularly attractive to American businesses that perceive little to no barriers in setting up shop in the North.

If you’re one of the US businesses that want to expand into Canada, we’d like to give you some important advice: Don’t jump in headfirst without research. Those shining expansion opportunities often blind US businesses to challenges that can hinder progress right out the gate! More specifically, we’re talking about challenges related to payroll compliance and administration.

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

So, how do you avoid the common mistakes many American businesses make when expanding into Canada? To that, we answer you with another question: Have you considered partnering with a Canadian payroll provider?


What Is a Canadian Payroll Provider?

Quite simply, a Canadian payroll provider is an organization you can outsource your payroll services to. Such an organization is made up of experts in HR and payroll solutions, providing you with packages that include (but are not limited to):

  • Timely and fully compliant payroll processing and admin
  • Thorough tax remittance and year-end tax reporting (including worker’s compensation taxation specific to province)
  • Administration of benefits, RSP contributions, commissions, expenses, allowances, and all other parts of your employment packages
  • T4s, record of employment forms, paystubs, and employment verification issuances are handled as well

Having a Canadian payroll provider can make the difference between your business hitting the ground running during your expansion and struggling to gain your first foothold in Canada’s economy.


Why Do You Need a Partnership?

Yes, you can try to administer your own payroll in Canada, but it’s a thorny path to go down. Canadian payroll compliance is notoriously intricate and differs from province to province and is regulated by both provincial and federal government. Employment standards are also constantly changing, as evidenced by the new legislation passed last November in Ontario for improved wages, hours, benefits, and compensation for employees.

A partnership with a payroll provider takes all the worry out of payroll and compliance. A payroll provider enables you to focus on your core business responsibilities and helps you keep all the differences between American and Canadian payroll processing straightforward.


Risks of Managing Payroll on Your Own

Non-compliance in Canada, especially when it involves payroll administration and remittances, can be costly. Both your finances and your reputation are at stake, with the Canada Revenue Agency (CRA) fining you up to 10 percent of any late or failed remittances if the amount is more than $500. If you breach employment standards, including failing to pay your Canadian employees the correct amounts for time worked, for example, the monetary penalties can be devastating.

Perhaps the worst consequence to deal with, however, besides working to correct any compliance wrongs is appearing unprofessional as a new branch of your business in Canada. In this digital age, your business brand is everything, as it’s a highly informed consumer’s market. People will research your brand before making the decision to make a purchase from you or be hired by you as well.

Outsourcing your payroll by partnering with a payroll provider gives your business the brand insurance it needs to thrive in Canada!


What US Companies Need to Know about Paying Employees in Canada

Topics: Payroll Processing

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