Home Blog

Blog

Employing Canadian Workers? Our Business Taxes Can Be Quite the Pain!

Posted by Stacey Duggan

|

Aug 7, 2014 8:35:00 AM

Business and Payroll taxes can be a pain for U.S. based companiesEmploying Canadian workers and deducting the correct Canadian payroll taxes from their paycheques can be difficult if you’re an American or foreign company outside of North America. We’ve compiled a list of Canadian taxes a company employing Canadian workers should be aware of, if they are not engaging with an Employer of Record service.

Canadian Business Taxes

All Canadian businesses must file a corporate tax return with the Canadian government. This corporate tax return is due within the six months after the end of the company’s fiscal year.

If you are engaging with Canadian companies for the sale of your product or service you need to be aware of the sales tax for the province you are doing business in. For goods and services sold in Canada, every company must charge the applicable provincial sales tax. The same is true in the reverse, if you purchase goods and services in Canada, you will be charged the sales tax. You are then required to reconcile these debits and credits to pay or report to the Canada Revenue Agency. Every province has a different rate and the remittance schedule can vary as well based on company size. In Ontario, it is called the HST (Harmonized Sales Tax) and the rate charged is currently 13%, in Alberta that rate is 5% for their GST (Goods and Services Tax). For a full list of HST/GST rates by province, please visit the Canada Revenue Agency’s website.

Another tax to be aware of as a foreign company is the possibility of the 15% withholding tax. If a U.S. or foreign company chooses not to register a Canadian business presence but does engage in a sales transaction with a company in Canada, that company must withhold and remit 15% of any payments for services rendered in Canada.

Canadian Payroll Taxes

Some taxes are consistent for all employers across Canada such as the Canada Pension Plan (CPP), Employment Insurance (EI) and Worker’s Compensation.  These taxes may be consistently seen across all provinces and territories but the rate that they are charged can vary.

Other taxes are province or territory specific. For example, in Ontario employers must pay the Employer Health Tax (EHT) and in Quebec there are three additional taxes over and above the federal ones. Please visit the Canada Revenue Agency’s website for further information on provincial payroll taxes and rates.

If you have not engaged an Employer of Record here in Canada and have successfully registered your business, enrolled for the various government accounts and are up to date on your taxation responsibilities, you may be ready to hire your first employee.

If you’d prefer to have an Employer of Record handle the complexities of Canadian employment law, contact The Payroll Edge today and we’ll take care of the workforce compliance issues for you! 

7 Signs It's Time to Outsource Payroll

Topics: Payroll Tax, Payroll Tax in Canada, Employee Payroll Deductions, CRA Payroll Tax, Payroll Deductions, Calculating Taxes in Canada, Employee Payroll Tax, Small Businesses Payroll

Employer of Record Service: Your American Business Presence in Canada

Posted by Ray Gonder

|

Mar 26, 2014 10:21:00 AM

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

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

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

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

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

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

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

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

Canadian Worker's Compensation: What U.S. Companies Need to Know

Posted by Stacey Duggan

|

Mar 17, 2014 9:05:00 AM

Workers Compensation Board in Canada is Government run

Unlike the U.S., the workers compensation program in Canada is government run. Every Employer in Canada must register for a worker’s compensation account in every province that they have employees working in and each province has different rules as far as the registration process.

For example, in Ontario you cannot apply for a workers compensation account until you actually have an employee start date, in Nova Scotia you don’t register for an account until you have 3 workers and in Alberta you can pre-register regardless of whether you have employees or not.

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

The bigger the risk of injury to workers, the larger the percentage used when calculating what is due

For example currently in Ontario a worker in a clerical role would cost an employer 0.22% in workers comp taxes. However a worker on a construction site in Ontario would be taxed at 5.05%.

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

Many U.S. companies don’t realize that they should complete their own investigations and they have the right to appeal the board’s decision.

They also tend to rely on their own legal counsel in the States to advise them on best practices across the border.

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

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

Topics: Ministry of Labour, Payroll Tax in Canada, Employer of Record, U.S. Companies operating in Canada, MOL, Worker's Compensation, Canada Revenue Agency, Canadian Employer of Record, Paying Canadian Workers, Canadian-Based EOR, Canadian EOR

What’s The Best Canadian Payroll Calculator?

Posted by Stacey Duggan

|

Jan 17, 2014 1:40:00 PM

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

No Substitute for Experience

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

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

Get Additional Value from A Payroll Provider

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

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

Canadian Payroll Tax Deduction Calculator

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

The Hardest Part About Canadian Payroll Tax Calculations

Posted by Karen McMullen

|

Jan 13, 2014 10:15:00 AM

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

Even the Basics Aren’t Basic

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

Knowing the Law is Different from Understanding the Law

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

Constant Change Requires Constant Vigilance

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

Asking for Help when You Need It

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

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

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

What is the Best Canadian Payroll Calculator?

Posted by Ray Gonder

|

Dec 27, 2013 9:00:00 AM

What is the Best Canadian Payroll Calculator2Any business (including those based in the US) that needs to pay Canadian workers could benefit from a Canadian payroll calculator. These calculators can help you figure out basic withholdings for Canadian taxes, the national pension plan, and unemployment insurance (called employment insurance in Canada). For everyday withholdings and remittances, a Canadian payroll calculator can point you in the right direction. However, there are some limitations to a Canadian payroll calculator that you need to take into account. Failing to address those limitations can cause you to withhold too little or too much money from your workers’ checks. When that happens, you’ll be on the hook for back payments, repayments, fines, and more.

What it Does

A Canadian payroll calculator takes the information you enter, and gives you a quick overview of the most likely withholdings and remittances. It bases the output solely on the information you’ve entered, so be sure to double check what you enter. Using current laws and regulations, the calculator is able to predict the standard withholdings for your employees. This will help give you an idea of what you should be holding back from each paycheck. While it’s certainly not foolproof, it can show if your withholdings are currently way off.

What it Doesn’t Do

A Canadian payroll calculator can’t do advanced error checking, and it can’t offer legal advice. It assumes that you understand, and are correctly applying, all of the Canadian workplace regulations. If you misunderstand or misapply a regulation, the calculator will give you an erroneous result. If you misclassify a worker, or enter the wrong tax information for them, again, you’ll get a false result. The calculation is only as accurate as the data entered, so be sure you know what you’re entering.

The Best Calculator

Right now, the most reliable Canadian payroll calculator is a professional payroll service provider (like The Payroll Edge). They know and understand all of the relevant laws and regulations governing payroll withholdings and remittances. The staff spends every day dealing with every possible payroll scenario, so they don’t get tripped up by the subtleties of the law. They know how to appropriately classify employees, to make sure they’re being entered correctly into the payroll system. A professional payroll service provider can also offer advanced error checking, so simple arithmetical mistakes don’t end up costing you fines and back payments. While a payroll calculator can point you in the right general direction, a professional payroll service provider can ensure that you achieve, and maintain, full compliance with all applicable laws.

Canadian Payroll Tax Deduction Calculator

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

A Payroll Calculator that Calculates Canadian Payroll Deductions

Posted by Stacey Duggan

|

Dec 20, 2013 11:30:00 AM

A Payroll Calculator that Calculates Canadian Payroll DeductionsIf you’re a Canadian employer, you may be looking for a payroll calculator to help you determine the appropriate withholdings for your workers. To avoid the expense of fines and back payments, deductions must be accurately withheld and remitted to the proper government agencies. Using a payroll calculator is a quick, easy way for employers to calculate basic deductions. Of course, not all deductions will be basic, and no calculator can fully replace the expertise and guidance of an experienced payroll professional. And, like all payroll calculators, the results will only be as accurate as the data that you enter. Any mistakes, omissions, or regulatory misinterpretations entered by the user will create erroneous results. While a payroll calculator can be a useful tool, it cannot, nor is it intended to, serve as a standalone solution for determining the proper deductions for every employee in every situation.

More than Just the Math

Like all calculators, a Canadian payroll calculator takes the information you give it, does the math, and generates a result. Unfortunately, Canadian payroll regulations are about much more than some simple math. There are complexities and subtleties to the law that only the most experienced payroll professionals are equipped to deal with. A payroll calculator can’t tell you if you’ve properly classified your employees, or if new positions or jobsites have caused changes to their status. It also can’t tell you if you’ve applied the correct payroll regulations in every situation. The calculator assumes that you have entered all of the information correctly, and creates its results based on that information. If you don’t have a firm understanding of all of the applicable laws and regulations, then the results from the payroll calculator can be misleading.

Learning the Ropes

For businesses that try to manage their own payroll, there are quite a few obstacles that can’t be overcome with a calculator. Learning, understanding, and properly interpreting Canadian payroll regulations is just one of these obstacles. There are also government accounts to create and maintain, establishing banking and insurance accounts, and making sure that employees and workplaces adhere to health and safety regulations. Trying to manage everything by yourself can be time consuming and expensive. In the event that any mistakes are made along the way, the costs and time involved can increase exponentially. While a payroll calculator can help you with some very basic needs, you’ll still have a lot of work left before you can start hiring and paying employees.

A Tool, not a Solution

A payroll calculator, like the one found here can be a great addition to your toolbox. However, no calculator can replace the guidance of a qualified payroll professional. Only they can tell you if you’re understanding and interpreting all of the regulations correctly. And, while a calculator can only calculate, a payroll service provider can do so much more. They can manage and administer all of your payroll and personnel needs, freeing you and your staff to focus on your core business pursuits.

They can monitor employees and job sites to ensure continuing compliance with all federal and provincial regulations. And, when it comes time to pay your employees, they have all of the necessary personal, equipment, and training to calculate withholdings, make remittances, and issue paycheques. Use the calculator for the basic needs it was meant to address—for your more complex payroll issues, you need to trust the professionals at a qualified payroll service provider.

Canadian Payroll Tax Deduction Calculator

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

Make Sure You Don’t Miss Any Canadian Tax Withholding

Posted by Stacey Duggan

|

Nov 27, 2013 9:15:00 AM

Payroll Service Providers Ensure You Don’t Miss Any Canadian Tax WithholdingMissing Canadian tax withholdings can be an expensive mistake for your business. The fines and penalties for improper withholdings can easily exceed the cost of hiring a Canadian payroll service provider to do it right the first time. In the event of an audit or formal hearing, you’ll also have to factor in the expense of legal representation. Of course, you also have to consider the amount of time you’ll spend dealing with multiple levels of government bureaucracy. In the end, the services of a Canadian payroll service provider would end up saving you a lot of money, time, and aggravation. Whether you’re a Canadian employer or a US-based employer paying employees in Canada, a Canadian payroll service provider can make sure that your withholdings are accurate and timely.

Canadian Businesses

Payroll regulations in Canada are incredibly complex. They also change frequently, and with little notice. To make matters worse, the application of those regulations can change depending on your situation. Filing deadlines may change, depending on your previous withholdings. The necessary withholdings may change, if the nature or place of employment for a worker changes. Keeping up with changes to the regulations, and changes to the way they apply to your business, can be more than a full-time job. If you get it wrong, even once, the fines and penalties can be staggering. Engaging the services of a Canadian payroll service provider helps ensure that you never get it wrong.

US Businesses

If you’re a US-based business paying Canadian employees, things are even more complicated. You have to deal with all of the same rules and regulations that govern Canadian businesses. You also have to deal with all of the issues inherent in running a business across international borders. And you have to do it all while still dealing with all of your payroll issues in the States. You will essentially be running two separate, and incredibly complex, payroll departments. Mistakes on either side of the border can cost you dearly.

Using a Canadian payroll service provider as an Employer of Record (EOR) offers you some key advantages. Similar to a US Professional Employer Organization (PEO), an EOR acts as your administrative presence in Canada. They can handle all of your payroll needs, including withholdings and remittances. They can also help you establish a business infrastructure, meet insurance requirements, and other practical and legal necessities. With their help, you don’t have to worry about missing withholdings, managing multiple payroll departments, juggling international legal compliance, or other issues.

Work More, Worry Less

Using a Canadian payroll service provider allows you to spend more time focused on mission-critical tasks. You don't have to spend time managing multiple payroll departments, learning international payroll requirements, or dealing with bureaucrats from two separate countries. Instead, you can let a Canadian payroll service provider handle all of those issues for you, while you remain focused on more important business pursuits.

Canadian Payroll Tax Deduction Calculator

Topics: Payroll Tax, Payroll Service Provider, Outsourced Payroll Service, Canadian Payroll, Canadian Payroll Deductions, Payroll Tax Calculations, Payroll Tax in Canada, Canadian Payroll Regulations, Payroll Service, Canadian Payroll Service, U.S. Companies operating in Canada

Manage Your Payroll the Right Way with an Outsourced Service Provider

Posted by Ray Gonder

|

Nov 20, 2013 9:00:00 AM

describe the imagePayroll processing is an important part of any business. Making sure everyone is paid accurately, and on time, is critical. Making sure all of your reporting and remittance obligations are met is equally critical. Mistakes in any part of your payroll processing can lead to labour issues, audits, and expensive legal entanglements. There are several ways to handle your payroll processing, some more difficult than others. Handling your payroll the right way will save you time, effort, and money. Handling it the wrong way can end up costing you way more than you bargained in the long run.

DIY Payroll Processing

You always have to option of just doing it all yourself. Most businesses start out this way, with the owner handling payroll until it becomes too large to manage. You can take the time to learn all of the regulations, attend conferences to learn about new legislation, and even buy yourself some expensive software. Of course, then you have to learn to use the software, and keep up with updates and changes to the software. Once you have the knowledge and the software, you can spend hours every week handling all of the paperwork for payroll processing, as well as addressing any employee issues with payroll. As your business grows, you’ll spend more and more time on payroll, and less time focused on your business.

Pass it Along

Often, when payroll processing gets too complex for the owner, it gets handed down to the growing HR department. They inherit the responsibility of keeping up with changing legislation, learning new software, and dealing with employee issues. They often have little or no previous experience with payroll processing. They get to start from scratch, and learn the ins and outs of payroll service as they go. Of course, they aren’t liable for any mistakes they might make along the way. That burden still falls directly on the company. Incorrect payments or improper remittances can trigger a visit from the CRA. If they find problems with compliance, the fines and penalties go to the company, not to the HR staff.

Amateurs vs Experts

Payroll processing is a lot like other business services. It’s best to leave it in the hands of agencies that specialize in making sure it’s done right. Most businesses use accountants for taxes, shipping companies to deliver goods, and service agencies to repair equipment. Why do they outsource all of those needs? Because smart owners know that no business can do everything. Letting trained, experienced experts handle your tangential business needs just makes sense. When you try to do everything, you end up putting too much stress on your personnel, and pulling their focus away from your core business pursuits. By outsourcing some of your needs, you allow your staff to maintain laser-focus on growing and improving your business.

An outsourced payroll service relieves pressure on your staff, and relieves you of the stress of worrying about potential audits and penalties. They have years of experience interpreting and applying new and existing legislations, allowing them to easily navigate the complex payroll requirements. They undergo frequent, rigorous training, and have access to the latest and best software. Using their services is just like engaging a tax professional or repair service. If you want the best service, you hire someone who specializes in the service you need, and who has a proven track record of success.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing, Payroll Service Provider, Outsourced Payroll Service, Canadian Payroll, Canadian Payroll Deductions, Payroll Tax Calculations, Payroll Tax in Canada, Canadian Payroll Regulations, Canadian Payroll Service, Payroll Calculator, CRA, CRA Payroll Tax, CRA Compliant

How to Avoid Staying Educated on Always Changing CRA Payroll Tax Rules

Posted by Stacey Duggan

|

Nov 11, 2013 9:00:00 AM

How to Avoid Staying Educated on Always Changing CRA Payroll Tax RulesMany businesses still choose to handle payroll using in-house personnel. This is usually done either out of habit, or out of the belief that it saves the business money. Whatever the reason, it’s becoming increasingly expensive and risky to handle CRA payroll tax compliance using your own staff. As the CRA payroll tax rules continue to evolve and change, it’s becoming more difficult to keep up with all of the complexities. Any money saved by using your own staff can be instantly wiped out by a single error.

A Better Use of Time

Keeping up with CRA payroll tax legislation requires in-depth training and retraining. Even with all of that training, it still takes constant practice to meet all of the legislative requirements quickly and efficiently. Unless you have a dedicated payroll staff, your personnel probably only deal with CRA payroll tax requirements on a weekly or semi-weekly basis. This leaves gaps in their experience that can allow mistakes to creep in. With all of the other daily tasks your HR personnel are responsible for, it can be difficult for them to find the time to keep up with all of the payroll requirements. When they’re focused on payroll, they aren’t as productive in their other tasks. When they’re focused on their other tasks, they’re not gaining experience in CRA payroll tax compliance.

Employee Issues

Part of handling payroll involves handling employee questions and concerns. Employees always have questions about insurance and tax withholdings, overtime pay, missing hours, and myriad other concerns. Addressing these issues will consume even more time that your staff could be spending on more productive pursuits. Any mistakes must be corrected, CRA documentation must be changed, and new checks must be issued. The hours lost fixing minor errors can quickly add up to far more than the company is saving by using in-house personnel to handle payroll.

Convoluted Compliance

Even if your personnel have the right training and adequate experience to handle most payroll needs, that’s no guarantee that they’ll understand all of the nuances of the CRA payroll tax requirements. Worker classifications, insurance requirements, reporting documents, and more, can all change without notice. Something as simple as a trip to another work site can change the reporting requirements for a worker. If your staff isn’t familiar with the triggers that can cause these changes, they can fail to comply with the most current legislation. When that happens, fines, penalties, and back pay can quickly add up to tens of thousands of dollars.

Expensive Errors

Over the past year, the CRA has drastically increased their compliance efforts. This means more audits, more time spent navigating bureaucracy, and more potential for fines and penalties. Once you’re involved in a CRA payroll tax audit, you’ll probably want to engage legal counsel. At current hourly rates, it won’t take long for a labour attorney to cost far more than a payroll service.

Payroll Peace of Mind

Engaging a payroll service can eliminate all of these problems and concerns. Their dedicated staff is focused on payroll, and payroll regulations, every single day. They have the education, training, and experience to maintain compliance with the most recent legislation. Many of them are involved in shaping upcoming legislation, so they can be prepared for changes before they even happen.

Using a payroll service allows your personnel to focus on tasks for which they are better suited, and which are more productive for your business. The payroll service can handle everything from employee queries to CRA audit preparation. With their professional CRA payroll tax services, you save time, aggravation, and avoid compliance issues.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Service Provider, Outsourced Payroll Service, Payroll Tax Calculations, Payroll Tax in Canada, CRA Audit, Payroll Service, Payroll Calculator, CRA, CRA Payroll Tax, Payroll Deductions, CRA Compliant

Subscribe to Email Updates

Recent Posts

Posts by Topic

see all