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How Payroll Companies in Canada Benefit Foreign Businesses

Posted by Karen McMullen

|

Dec 11, 2017 9:00:00 AM

How Payroll Companies in Canada Benefit Foreign Businesses---1.jpgAs one of the most important aspects of any business, proper payroll management is an absolute must. However, things do tend to get a little complicated when businesses expand into other countries with different payroll, taxation, and hiring regulations. If handled improperly, your business could find itself in some serious hot water.

For any business that’s expanding into the Great White North, working with one of the payroll companies in Canada is one of the smartest investments you could make.

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

Not sure why? Here are some of the key ways payroll companies in Canada benefit foreign businesses.

You’re Working with Experts

For the most part, the basic administration of payroll is the same week after week. However, when you expand into another country, things get complicated. While you may think you’re prepared to handle payroll internally, you’ll soon find yourself stressed learning new rules and keeping up with changing regulations. That’s why it’s best to trust the experts.

When you outsource payroll to a payroll company in Canada, you’re working with experts who have years of experience when it comes to foreign countries and Canada’s payroll system. No situation is too complex and you can rest easy knowing your workforce is being paid accurately, on time, and in compliance with Canadian laws.

You’re Reducing Risks

When foreign countries try to handle Canadian payroll on their own, the room for error increases dramatically. For instance, misclassifying an employee as an independent contractor can leave your business at risk of some hefty fines, even if the incident was entirely accidental. Unless someone on your staff has a wide knowledge of Canadian payroll regulations, handling payroll on your own can be a serious gamble.

Payroll companies in Canada eliminate these risks and allow you to focus on your core work—not the stressors of improper payroll management. From properly classifying employees to year-end tax reporting, your business will always be in compliance with government laws and you won’t run into any surprise fines down the road.

Because there are so many payroll mistakes that can be made, outsourcing payroll is almost always the best option. 

You’re Covered All across Canada

Expanding your business into Canada is an interesting journey. Not only are you entering a new country, but you’re also working in a new province. Maybe you’re even in a few different provinces!

To make payroll even more complicated, each province or territory in Canada has a number of different regulations that make payroll different from place to place. For instance, vacation pay in Canada is typically four percent while Saskatchewan pays six percent. Knowing each province’s rules is important for any company that’s expanding across Canada.

When you work with a Canadian payroll company, you’re covered no matter which province you’re expanding into. Not only are you covered for your initial expansion, but as your business grows, you’ll continue to be covered as you conquer new ground in different provinces. Instead of trying to keep up with each province’s rules yourself, sit back and let a professional payroll company handle it for you.

You’re Able to Focus on What’s Important

Taking care of payroll administration on your own is a massive undertaking. From managing vacation time and taxes to making sure everything is submitted accurately and on time, you could easily find yourself spending hours each week keeping everything on track.

For the sake of your business and its success, allocate your time to more important duties by outsourcing payroll.

Don’t waste time trying to handle everything all on your own—with the help of payroll professionals, your payroll will be handled so your time is free to be invested back into your business.

Don’t leave payroll to chance. Working with payroll companies in Canada offers your business the resources it needs to expand without any hiccups.

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

Topics: Payroll Processing

Prioritize These 6 Traits When Seeking Payroll Companies in Canada

Posted by Corinne Camara

|

Dec 8, 2017 9:00:00 AM

Prioritize These 6 Traits When Seeking Payroll Companies in Canada--.jpgSo you’ve made the decision to outsource payroll—that’s a great move! But now you’re left to embark on the journey of finding the right payroll company for your business. Where do you start? How do you know what to look for?

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

Before you panic, know this: Finding the right payroll company is easy, but only if you know what to look for. These are the six traits you should prioritize when seeking out payroll companies in Canada.

1. Expertise and Experience

To ensure you’re getting the best service possible, you should start by looking for payroll companies in Canada that have years of experience. While experience doesn’t always mean expertise, these two traits often follow one another.

While a newer and less experienced company may offer you a better deal, you’ll end up losing down the road when it doesn’t fully comply with Canadian laws, fails to submit remittances on time, or makes other critical errors. Prioritize expertise and experience with your payroll service provider and you’ll experience nothing but smooth sailing.

2. All-in-One Inclusivity

There’s a reason business owners prioritize “all-in-one” service when it comes to payroll providers: Everything they need is under the same roof, for a better price. As your business grows and your needs change, if your payroll partner doesn’t offer all-in-one services, your bill is going to grow a lot faster than you anticipated. Each and every new need will have an additional cost. When everything in terms of HR and payroll is handled together right from the start, everything your business needs as you begin to grow is covered.

3. All Remittances Are Covered

If a company claims to cover all remittances, be prepared to ask questions. The best payroll companies in Canada will cover all remittances; however. some companies make this statement and then don’t provide the coverage. 

In fact, some will charge extra for remittances they once claimed were covered. Before signing any contracts, read the fine print and ask the right questions. Of course, you want payroll tax covered, but you also want coverage on workers compensation and any other provincial taxes that come into play. The right company will offer coverage, so never be afraid to ask for specifics.

4. Great Customer Service

As cliché as it sounds, your payroll provider is going to become your greatest business ally. And so, great customer service should always be at the top of the checklist. Anytime you have a question or concern regarding payroll or HR, they’re who you’re going to call. 

You want them to be ready and able to answer questions, not tied up and slow to respond. For the sake of your business, do your own research before making a decision and make sure previous customers have nothing but great things to say.

5. Knows Your Country of Expansion

If you’re expanding into Canada, your payroll service provider must be an expert in Canadian payroll rules and regulations. If not, you’re leaving a lot to chance in terms of compliance and accuracy. 

Payroll companies in Canada will always have more experience than a provider from a different country when you’re expanding in the Great White North. Choosing to work with a Canadian company is always your best bet. Otherwise, you could end up in some trouble come tax time.

6. Helps You Get Started

With these traits at the top of your wish list, it’s time to find your business the right payroll service provider! One last trait to prioritize is a company that makes getting started easy. Pick up the phone or visit their website to get your questions answered and get the process started—the right company will make the process easy and enjoyable.

What US Companies Need to Know about Paying Employees in Canada

Topics: Payroll Processing

Need to Figure out Canadian Payroll Deductions? How a Calculator Can Help

Posted by Karen McMullen

|

Dec 1, 2017 9:00:00 AM

Need to Figure out Canadian Payroll Deductions How a Calculator Can Help--.jpgCanadian payroll deductions are an important aspect of your business. After all, you need to properly calculate them to avoid running into trouble with the Canada Revenue Agency (CRA) later on down the line. 

Figuring out deductions can be a bit of a task. There are many different factors you need to take into account. It can sometimes seem a bit too complicated! If you’re feeling overwhelmed, don’t fret. There are many tools to help you.

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

Different Province, Different Rules

One of the biggest problems in figuring out Canadian payroll deductions is posed by location. Different provinces have all sorts of different rules pertaining to payroll deductions. While you might be able to calculate deductions for the Canadian Pension Plan and Employment Insurance easily, everything else might be up in the air. 

Even calculations for CPP and EI aren’t a given either! Different provinces have different costs of living, which get factored into CPP and EI calculations. Income tax also varies among provinces. Vacation time and other entitlements are calculated differently among provinces as well. 

The long and short of it is you need to know the rules and regulations governing each province your business operates in.

Different Employees, Different Rules

Another factor complicating payroll deductions can be the status of your employees. Calculations for CPP, income tax, EI, and even vacation time can differ not only based on where you operate but by employee too. 

Calculations for a full-time employee are likely going to be different than a seasonal employee. The employee’s length of service might also come into play, as it does when you’re calculating vacation pay in Quebec and Saskatchewan.

Getting a Helping Hand

With so much variation in Canadian payroll deductions, it’s little wonder so many employers feel they need help figuring out what they need to deduct and when. While your best bet is to team up with a Canadian payroll services provider, not every employer has the budget for that.

Even if you do work with a service provider, you might want to better understand Canadian payroll. Being able to calculate things yourself can give you a rough idea of the situation. It can also help you understand the figures your service provider submits.

In these situations, a deductions calculator can be your best friend.

What Does a Calculator Do?

You might be imagining a simple handheld calculator and wondering how it can help you figure out deductions. While this might help you, an online calculator tool programmed specifically to figure out Canadian payroll deductions is a safer bet.

These tools are available from several different sources. Most of them are free. The CRA offers one on its website. Your payroll services provider might also offer you one to use for free.

The purpose of these calculators is to help you process payroll correctly. While you’re still responsible for the accuracy of the information, they can help you understand and figure out Canadian payroll deductions in short order.

How Do They Work?

Most calculators are online tools programmed with the latest rates and information for different provinces. To use one, you’ll need to fill in some information about the company and the employee. You’ll likely be asked where the employee is located, what their employment status is, and even how long they’ve been working with you.

You’ll also need to give information about the employee’s wage and earnings. More sophisticated calculators might also require benefits information.

Once this information has been inputted, the calculator can calculate your Canadian payroll deductions.

No Replacement for Professionals

Calculators can be very useful tools! They’re still no replacements for professional advice and expertise. While they can give you a good estimation of your Canadian payroll deductions, these tools are only as good as their programming. Additional information can sometimes change the picture.

If you need a helping hand with your payroll, talking to a Canadian payroll service provider is your best bet.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Processing

How Does Vacation Pay in Saskatchewan Affect Payroll Processing?

Posted by Corinne Camara

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Nov 29, 2017 9:00:00 AM

How Does Vacation Pay in Saskatchewan Affect Payroll Processing--.jpgVacation pay affects your payroll processing. This is true of almost any jurisdiction you operate in, including different states and provinces, and even different countries. 

In Canada, the provinces have final say over how vacation pay is to be tabulated and disbursed to employees. Quebec, for example, has some unique rules about how much vacation time employees are entitled to and how much pay they receive. Ontario’s rules are different, as are BC’s and Alberta’s. 

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

What about Saskatchewan? Vacation pay is different there yet again.

Who’s Eligible?

Vacation entitlements and pay are governed by the Saskatchewan Employment Act. If your employees are governed by the Act, then they’re likely entitled to annual vacation pay. 

Employees who work more than one year with you are entitled to vacation pay. For the first ten years, the amount of vacation time they’re entitled to remains the same. If an employee is with you longer than ten years, they earn more time off. 

This applies equally to full-time and part-time employees. It may also include some employees who have taken a break in their employment. The employee must still be employed with you for 52 weeks (a year) or more, but they only have to work 26 consecutive weeks. 

This would include an employee who worked 26 weeks beginning in January but was laid off in July. In September, they resume working for you. Since they work through to January of the following year, they’re entitled to vacation pay.

Calculating Vacation Pay

The Act also lays out how vacation pay in Saskatchewan should be calculated. Employers have two options. One is for employees who take their vacation entitlement. The other is for those who don’t take vacation. 

During the first nine years of employment, the calculation is 3/52 (approximately six percent) of the employee’s annual salary. You must also calculate vacation pay on the vacation pay at the same rate! Any commissions, overtime, or bonuses paid also need to be included in the calculation. 

After ten years of employment, employees earn 3/42 of their annual salaries, plus commissions, bonuses, overtime, or other earnings. This is about eight percent.

Paying Vacation Pay

The Act allows employers and employees to decide how vacation pay in Saskatchewan will be paid. There are two options.

Since vacation pay is a percentage of the employee’s annual wages, the employer can opt to pay vacation pay in one lump sum when the employee takes their vacation. This is designed to replace the employee’s “lost” wages for going on holiday. An employee who earns $15,000 and a $3,000 commission for the year would be entitled to $865.38 for vacation pay.

The other option is to disburse vacation pay on each paycheque. Vacation pay is calculated in the same way, only as a percentage of the wages on each paycheque.

Employees taking vacation and those not taking vacation can request their employer pay either way. Some employers may prefer to use the lump sum payment. Others may prefer to use the paycheque method since it more readily allows for fluctuations in overtime, bonuses, and commissions.

Termination

Employees who are terminated or quit should receive vacation pay on their final paycheques. If you calculate vacation pay per pay period, then you’ll pay out only the amount tallied on the final pay. If you pay vacation as a lump sum, however, you’ll need to pay out the full amount.

It’s important to note employees who haven’t yet completed 52 weeks with you are entitled to vacation pay when they quit or are terminated.

If you’re having trouble getting payroll just right or you have questions about vacation pay in Saskatchewan, there are many tools to help. Asking your payroll services provider is also a good strategy!

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

Topics: Payroll Processing

What You Can Learn from the Phoenix Payroll Scandal

Posted by Karen McMullen

|

Nov 27, 2017 9:00:00 AM

What You Can Learn from the Phoenix Payroll Scandal--.jpgYou’ve seen it on the news or read it in the papers: The Phoenix payroll scandal has left thousands of Canadian public servants underpaid, overpaid, or in many cases—not paid at all. The situation has made news headlines all over the world, highlighting the true importance of secure payroll systems and the effect it can have on the working population.

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

Don’t let it scare you. Systems and companies are in place that offer efficient and reliable payroll services, saving hundreds of businesses the trouble that Phoenix has left on the Canadian government. At the end of the day, there are things one can take away from the Phoenix payroll debacle.

What Happened?

Since its launch in February of 2016, the Phoenix payroll system has left over 50,000 public servants in precarious situations, living without paycheques or sorting out the issues surrounding overpay. The automated self-serve payroll program was intended to save the Canadian government $70 million per year processing payments for over 300,000 federal employees. However, it has now racked up $140 million in overpayments, frustrating taxpayers and leaving thousands of Canadians with more questions than answers.  

From reports of foreclosure and maxed out credit cards to selling beloved household treasures, affected citizens are doing whatever it takes to keep themselves and their families afloat, even if that means putting themselves in serious despair.

While the government did announce a $140-million funding reallocation strategy at the beginning of 2017, too many Canadians are left playing the waiting game, with claims taking up to 10 months to be heard and addressed.

What Can We Learn?

As headlines continue to pop up across the country and more stories of desperation come forward, you might find yourself asking what you can learn from such a situation. Business owners all across Canada (and perhaps the world) are wondering how they can avoid such a situation within their own businesses. Is there anything we can take away from this alarming situation?

1. Automation Is Still King:
While automated systems can have glitches, handling payroll on your own continues to create more risks. From late submissions to overlooking overtime pay, there are more places errors can occur when you handle payroll on your own. Look for an automated payroll provider that has impeccable customer reviews, superb customer service, and a history that’s free of major errors or concerns. The Phoenix payroll scandal may have you thinking payroll should be handled manually, but with the right automated service, you can reduce risks and save time.

  1. Address Concerns Immediately:
    If an error does arise, you can be sure an employee will bring it to your attention as soon as possible. Looking into and addressing these concerns with haste allows you to get to the bottom of the issue and prevent it from occurring again. If an error has occurred with one paycheque, it may have occurred on another. Your employees rely on you for accurate payroll. Be vigilant and don’t let them down.
  2. Consider Outsourcing Payroll:
    Payroll is complicated. It’s safe to admit it! As your business grows and your needs change, you might find payroll falling to the backburner. While this is both unfair to your employees and risky for your business, outsourcing payroll has become a reliable option for many businesses. Leaving payroll in the hands of trusted professionals let’s you focus on other aspects of business while knowing your employees are properly taken care of.

Don’t become fearful of payroll. While it can be complicated and the risks seem high, with the right resources, you can easily avoid issues like the Phoenix payroll scandal.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

How to Calculate Canadian Payroll Deductions

Posted by Anna Mastrandrea

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Nov 24, 2017 9:00:00 AM

How to Calculate Canadian Payroll Deductions--.jpgCalculating Canadian payroll deductions is no small task. What seems like it should be relatively straightforward can actually be a complicated process. It doesn’t need to be difficult, however, so long as you keep a few things in mind. 

Follow these simple steps for calculating Canadian payroll deductions.

Know the Variables

The first step in calculating Canadian payroll deductions is to know your variables. Different provinces in Canada have different rules when it comes to income taxes, Canadian Pension Plan premiums and Employment Insurance contributions, and even vacation entitlements. Quebec and Saskatchewan do things differently than Alberta and Ontario. 

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

Another variable you need to consider is the employment status of the person you’re paying. Most provinces calculate different deductions for workers based on their classification as full time, part time, or seasonal. 

Once you have this knowledge in hand, you’re prepared to begin your calculations.

Know the Rules

One other quick tip before you get started on calculating your payroll deductions: Know the rules. As already mentioned, rules in Canada vary from province to province and by employee classification. 

There are other rules you’ll want to be aware of. Recently, the Canada Revenue Agency and the federal government caused a stir when it was revealed employee discounts were now to be considered “taxable benefits.” If you offer your employees any kind of benefit, you’ll want to know if it’s considered taxable or not. 

Knowing rules like these helps you make more accurate calculations. The more accurate your calculations, the fewer problems you’ll have later on.

Using a Calculator

Computers and the internet have gifted us many different tools. For those trying to figure out Canadian payroll deductions, one of the greatest tools available is the deductions calculator.

You can find Canadian payroll deduction calculators in many different places. The CRA offers a free one on its website. Your Canadian payroll service provider may also offer one. These tools are available for free. They have different levels of sophistication. Some will be more up to date and accurate than others. Always look for a calculator using the latest rate information.

To calculate your deductions, plug in the information the calculator requires. The more information you can provide, the more accurate the calculation will be. Keep in mind not all calculators account for every nuance of payroll. Some, for example, won’t factor in taxable benefits at all. Ultimately, you are responsible for the accuracy of the deductions.

Get a Helping Hand

A deductions calculator is a great tool, but it has its limitations.

Depending on the sophistication of the calculator and the number of variables it factors in, its sums will be more or less accurate. If you have information the calculator didn’t allow you to input, you’ll need to consult with the professionals.

A PEO or Canadian payroll services provider can help you straighten out your books, ensure accuracy in payroll, and help you avoid fines and penalties.

Understanding Canadian payroll deductions is still a great skill, but teaming up with a provider can help you shore up your payroll.

Still Have Questions?

Maybe you used a calculator tool, but you’re unsure of how accurate its calculations are. You might just feel like something is “off” about the number.

Even if you did use the calculator and got an accurate calculation, you may still have questions about Canadian payroll deductions! Don’t be afraid to reach out to a payroll services provider and get the answers you’re looking for.

Calculating Canadian payroll deductions doesn’t need to be difficult. In fact, following these steps make it a lot easier!

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Processing

Canadian Payroll vs. U.S. Payroll: What’s the Difference?

Posted by Shannon Dowdall

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Nov 20, 2017 9:00:00 AM

Canadian Payroll vs US Payroll Whats the Difference--.jpgAmerican firms often have operations in Canada. Whether you’re operating a branch office or merely have an employee or two up north, you’re probably involved in administering both Canadian and American payroll as a result. 

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

Many American employers remain somewhat unsure of the differences between Canadian and U.S. payroll. The two even seem relatively similar at first! That said, there are many differences between the two.

Two Different Countries

Canada is its own country and is governed by its own laws, rules, and regulations when it comes to payroll. The U.S. also has its own system and regulatory framework. While there are similarities between the two, there are also major differences. 

The most fundamental difference is currency. U.S. payroll uses the American dollar as its currency. The Canadian system uses the Canadian dollar. The two have parallel governing bodies. In the U.S., the Internal Revenue Service (IRS) is responsible for enforcing payroll regulations. In Canada, the Canada Revenue Agency (CRA) has a similar function.

Federal and Provincial Law

Canadian payroll is governed by two separate levels of government: federal and provincial. The federal government dictates law across the country. 

The vast majority of payroll regulations, however, fall under provincial jurisdiction. Vacation calculations, for example, are governed by the provinces. Quebec calculates vacation pay one way. Saskatchewan has a different set of rules, as does Ontario. 

Most employees fall under provincial jurisdiction, rather than federal employment law. You, as the employer, need to be aware of both sets of rules and which ones pertain to you. You’ll also need to be aware of differences between provinces.

Different Holidays, Different Wages

American employers should also be aware of different holidays in Canada. While you may give all of your employees July 4 as a holiday, your Canadian employees are actually entitled to July 1. Canada Day is a statutory holiday, as are Christmas, Easter, New Year’s, and Thanksgiving, which happens earlier in Canada.

Provinces mandate holidays for employees as well. These holidays differ between provinces. For example, only some provinces offer a holiday on the first Monday of August. It’s called different things in different provinces: British Columbia Day in BC, Natal Day in Nova Scotia, and Heritage Day in Alberta. Quebec and Yukon don’t offer this holiday. It’s optional in Ontario.

Minimum wage is also higher than it is in much of the U.S. Since minimum wage is provincially legislated, it varies by province as well. Ontario’s minimum wage and Alberta’s minimum wage are different from each other, and they’re both different from Quebec.

You’ll need to take all of these factors and differences into account when you calculate Canadian payroll.

Different Social Programs

Canada has a more expansive welfare state than the U.S., which means American employers also need to take note of various Canadian social programs. The most important for payroll are the Canada Pension Plan and Employment Insurance.

Benefits may also be handled differently than they are in the U.S. For example, the federal government determines what is and isn’t a “taxable benefit.” Taxable benefits in Canada may not be the same as in the U.S.!

Get Professional Help

Navigating the Canadian payroll system can be a bit complicated, even for native Canadian businesses. There are so many different factors at play when it comes to calculating Canadian payroll.

American companies may struggle even more with properly calculating Canadian payroll. The different rules can sometimes be confusing. If you don’t know the ins and outs of the system, you could find yourself overlooking important details and landing in hot water.

Get a helping hand by reaching out to Canadian payroll service providers. They’re experts who do know the system and can offer you the assistance you need.

What US Companies Need to Know about Paying Employees in Canada

Topics: Payroll Processing

How to Pay Employees Who Work in the United States and Canada

Posted by Corinne Camara

|

Nov 15, 2017 9:00:00 AM

How to Pay Employees Who Work in the United States and Canada---1.jpgRunning a business can be extremely tricky because there are so many aspects that you have to account for. You have to make sure that your employees are happy, your customers are happy, your product or services are working properly, all the logistical aspects are correct, and make a lot of difficult decisions. 

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

If you're careful, experienced, and have the right staff, however, you should be completely fine. There are a few things that might still be difficult in certain situations. For example, if you're running an American company and you have a few employees working in Canada, those employees obviously still need to be paid, right? But it can be difficult to successfully do this without causing even more problems. 

If you have international employees who work across borders, then you have a few options for paying them and making the process much less stressful on your end and theirs. 

Here are a few things you should consider if you're attempting to pay employees who happen to work remotely in Canada or another part of the world. 

Cross Your Fingers and Hope for the Best

If it's a short weekend business trip or nothing more than a few days, you're most likely going to be fine and you'll be able to pay each employee the correct amount without issue. But if this Canadian employment is an ongoing task, it's only a matter of time until you, your business, or each individual employee is caught working, potentially illegally in Canada, and you'll be fined for tax evasion. 

Register to Do Business in Both Countries

The easiest way to ensure that your employees are being properly paid in Canada is by registering as both a Canadian and a U.S. business. 

Use Payroll Service Provider to Help You Process Canadian Payroll

One of the main issues facing small business owners is payroll processing—it is often expensive if you make a mistake and risky to address. Outsourced payroll solutions, however, will be able to help you successfully pay your Canadian employees without being fined

Use a professional payroll service, register your business in both countries, and make sure that you consider exactly how long your employees will be working in another country before you decide how to proceed with paying them. Again, if it's only going to be for a few days or a one-time thing, it'll probably be fine. But anything longer than that, make sure it's legitimate. 

If you want to learn more about a quality payroll service provider, contact The Payroll Edge today

What US Companies Need to Know about Paying Employees in Canada

Topics: Payroll Processing

Payroll Preparation for an American Business Employing a Canadian

Posted by Anna Mastrandrea

|

Nov 6, 2017 9:00:00 AM

Payroll Preparation for an American Business Employing a Canadian--.jpgDoes your business employ Canadians, even though you’re based in the United States? Whether you have Canadians on payroll as part of a regional branch in Canada or another reason, you’ll need some guidance when it comes to preparing payroll

Why? Businesses employing a Canadian have to deal with the payroll regulations and taxations in Canada.

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

The Branch Office

The most common scenario for an American business employing at least one Canadian worker is a branch or regional office operating in Canada. This business may be “separate” from the American wing. Even if it’s not, you’ll still need to contend with the Canadian rules and regulations around payroll. 

Sometimes, a business has several Canadian employees. Others may only have one Canadian employee. Nonetheless, you must prepare payroll with Canadian rules in mind.

Visas and Contracts

The rules surrounding Canadian workers who are employed in the United States are a little different from those who work for an American firm but are based in Canada. The way you handle temporary or seasonal employees may also be affected by a number of different considerations. 

As you can see, things can get complicated quite quickly! A lot depends on where the employee is when you’re employing a Canadian. The type of employment also matters when it comes to preparing payroll.

Things to Consider

Canada and the United States have a special tax agreement to help their citizens avoid double taxation. These rules may apply to some American businesses employing a Canadian, particularly if the employee works on American soil.

For employees located at your branch office or otherwise operating in Canada, the rules are different again. You’ll need to consider deductions such as those for Employment Insurance and the Canada Pension Plan. You’ll also need to pay attention to the various federal and provincial rules around what counts as a taxable benefit.

Provincial Legislation

For American businesses employing a Canadian, there’s an additional layer of complexity in preparing payroll. The rules often differ from province to province, so what you need to do may be different depending on what province your employee lives in or where your branch office is located.

For example, Ontario and Alberta have different minimum wages. You’ll have to pay an Ontario worker a different hourly wage than a worker doing the same job in Alberta. Other compensation, such as vacation time, may also be different. Quebec, for example, has a very different way of calculating vacation time for employees.

The provinces might also have different legislation about different kinds of employees. For example, there may be different rules about employing a temporary or contract employee in British Columbia than there are in Newfoundland.

If your business operates in several different provinces and employs Canadians in these different locations, you’ll need to pay special attention to the differences in provincial rules!

Get a Helping Hand

Instead of worrying about compliance and trying to sort out all the nuances of preparing payroll for your Canadian employees, why not get a helping hand from a Canadian payroll services provider?

There are numerous advantages to teaming up with a Canadian provider for your payroll needs. First of all, they’ve got the expertise to guide you through the tangled web of Canadian payroll rules and regulations. If you’re not sure about how to calculate vacation time for your employee in Quebec, don’t worry! The experts have your back.

Another advantage is most Canadian payroll service providers are also familiar with the American payroll system and all the regulations surrounding it. There’s no reason to limit the services to only Canadian payroll.

If you’ve been worried about preparing payroll for your Canadian employee, talk to an expert today.

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

Topics: Payroll Processing

Top 6 Resources For Understanding Canadian Payroll Tax Regulations

Posted by Stacey Duggan

|

Nov 3, 2017 9:00:00 AM

Top 6 Resources For Understanding Canadian Payroll Tax Regulations--.jpgTo the casual observer, Canadian payroll tax regulations may not seem all that complicated. There’s more than meets the eye, however, as all good employers are aware. Understanding Canadian payroll tax regulations can be a bit tricky. 

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

Fortunately, there are many resources to help. These are the top six resources you need in your corner if you want to understand the Canadian regulations around payroll tax.

1. The Canadian Revenue Agency

The Canada Revenue Agency (CRA) is the number-one resource for understanding Canadian payroll tax regulations. The CRA is the body responsible for administering the regulations. 

The CRA provides a number of helpful resources through its website, including different aspects of payroll tax regulations, such as penalties associated with payroll.

2. The Canadian Payroll Association

The Canadian Payroll Association (CPA) is an industry association for those involved in providing payroll in Canada. One of its primary goals is payroll excellence and leadership through education. As a result, the CPA provides plenty of educational materials, publications, and other resources for those trying to understand Canadian payroll tax regulations. 

Members of the CPA can also attend training seminars and other educational events. If joining the CPA isn’t high up on your to-do list, you can still get access to free resources, such as payroll guidelines and information about relevant legislation online.

3. Your Payroll Provider

If you’ve contracted payroll services in Canada, your provider can be another great source of information for understanding Canadian payroll tax regulations. Your provider’s team will have the expertise and knowledge to help you not only understand but fully comply with payroll expectations.

If you haven’t signed up with a Canadian payroll provider just yet, you can still look to these providers as great sources of information. Many offer free resources, including informational blog posts and whitepapers.

4. Canada Business Network

Another Government of Canada resource, the Canada Business Network provides resources on many aspects of operating a business in Canada. Topics include hiring, employment legislation, taxes, and yes, payroll.

5. Provincial Regulations and Legislation

Understanding Canadian payroll tax regulations means you should also look at provincial regulations and legislation. Different provinces administer taxes differently. For example, the provincial rules around calculating and paying vacation time are different in Quebec than the rest of Canada.

Be sure to visit provincial resources pertaining to payroll in the province your business operates in. If you’re not sure where to look, your payroll provider may be able to help you.

6. The Legal Field

A law firm or lawyer specializing in payroll and corporate taxes may also be able to help you better understand Canadian payroll tax regulations. Of course, they’re not going to be able to tell you much your payroll provider doesn’t already know.

Individual pieces of legislation can also be enlightening for understanding Canadian payroll tax regulations, as can court cases. Legislation and court cases are freely available for your review. You may need some help deciphering what these documents mean. Your payroll provider or a legal consultant would be more than happy to help.

Information You Trust

Since Canadian payroll tax regulations have legal implications about how you operate your business, you should always get your information from trustworthy sources, such as the CRA or your payroll provider.

Since Canadian payroll regulations and tax tables are always changing, you should keep up to date with your knowledge too. Be sure the payroll provider you’re working with is also committed to keeping their understanding of Canadian payroll tax regulations up to date.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Processing

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