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How a U.S. Company Can Pay Sales Reps in Canada

Posted by Stacey Duggan

|

Oct 31, 2014 4:57:25 PM

How a U S Company Can Pay Sales Reps in CanadaPotential customers are in Canada, why aren’t you selling to them? 

Expanding into a foreign market can seem very daunting, especially when you add a whole new set of rules for payroll and employment standards compliance.  Most U.S. companies decide that the complication and liability of hiring foreign workers far outweighs the potential sales revenue that can be made with an expansion north of the border. 

Or worse, they simplify the process and do one of two things;

1) Tax the Canadian sales person the same way they would their U.S. sales reps, converting the pay into Canadian funds and mailing out a cheque across the border.

2) Pay them as independent contractors.

The first way not only evades calculating the proper federal and provincial taxes in Canada as well as fails to remit them to the appropriate authorities but also sidesteps employment standards legislation as laid out by the Ministry of Labour (MOL).

The second way only works if the person is a true independent contractor in which the CRA, similar to the IRS, has very strict rules surrounding the qualification of these businesses.  Unsurprisingly, an independent contractor is expected to be just that - independent. They set their own hours, provide their own tools, and can subcontract their work to other people. By law, you have very little say in how they conduct their business.  When hiring a sales person you anticipate that they will learn your product or service, set and meet specific goals, represent your company brand to prospects and only work for you.  A sales person, who is treated as an independent contractor, rarely meets the criteria to be paid as such in the eyes of the Canadian government.

While the above may seem easier, it’s illegal and can result in huge fines, back payments, criminal penalties, and the loss of your right to conduct business in Canada.

Not expanding isn’t the answer either when there is true potential for company growth.

There is a much easier and perfectly legal way to expand your sales force into Canada without the complication of learning foreign payroll and HR compliance.

If you’re looking to expand your sales team north of the border, get a Canadian Professional Employer Organization (PEO) to handle the payroll and HR for your Canadian workers. 

The Payroll Edge is a Canadian employer of record whose forte is to help U.S. and foreign companies hire in Canada. We understand Canadian compliance when it comes to payroll taxation and employment standards across every province.  For U.S. companies trying to match a current employment package for a Canadian worker, the cross border differences and even the terms can be confusing. We understand these variances and can help companies navigate this unknown territory. 

Hiring a Canadian sales representative to promote your product or service can open up a new revenue stream for your business. By engaging with a PEO in Canada you don’t have to spend your time learning a new set of payroll and HR rules or taking confusing Canadian payroll classes, you can concentrate on other aspects of your business such as marketing and customer support.  

Contact us to see how much time and expense you can save by hiring a PEO service.  We’ll take care of the payroll, tax remittances, employment agreements, worker’s compensation, insurance and so much more!   

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

Topics: U.S. Companies operating in Canada

5 Reasons Why US Firms are Hesitant to Expand into Canada

Posted by Stacey Duggan

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May 23, 2014 10:52:00 AM

5 reasons why us firms are hesitant to expand into canadaUS companies do more business with Canada than with any other foreign country. US firms expanding into Canada can find thriving markets that make the expansion well worth the effort. So, why aren’t more US firms expanding into Canada? Like any major business decision, there are many factors to consider prior to an expansion. When looking into those factors, some US businesses may become hesitant. However, thousands of US businesses have successfully overcome those factors, and gone on to successful expansion. While all of these reasons are worthy of careful consideration, they alone shouldn’t derail an otherwise lucrative expansion.

Cost

For US firms expanding into Canada, cost is often the leading reason for hesitancy. Setting up the accounts and infrastructure necessary for a successful expansion can be considerable. There are legal costs, administrative costs, logistical expenses, and more. However, with the proper organization and approach, these costs can be minimized. And, in the long run, they pale in comparison to the profits that a successful expansion can generate.

Complications

Moving a US business into Canada isn’t as simple as renting a building and opening your doors. You’ll need to deal with multiple bureaucracies while setting up your Canadian presence. The Canadian government has strict rules about everything from employee classifications to product labels. Learning to navigate all of the bureaucracies, while still running your US business, can be time consuming and difficult.

Legalities

US firms expanding into Canada are entering a completely different legal system. There are different laws governing employee retirement funds, employee termination, pre-employment drug screening, and much more. It’s a convoluted and complicated legal code that has a different foundation and direction than what US employers are accustomed to. It can take years to learn the ins and outs of Canadian employment and business law, and then it requires constant vigilance to keep up with changes to those laws.

Stretched too Thin

US firms expanding into Canada may be hesitant due to fears of stretching their existing staff to thin. If you’re using your current US staff to manage your Canadian expansion, you may be putting too much on their plate. While you want your Canadian expansion to be successful, you don’t want that success to come at the cost of damaging your US base. Asking your current personnel to learn a new legal, administrative, and payroll system, while still managing your US business, can be problematic.

At Arm’s Length

Most business owners like to manage their own business. They enjoy being involved in the day to day activities, and like keeping an eye on the business they’ve worked so hard to build. US firms expanding into Canada don’t always enjoy this luxury. Unless your US business is right across the border, you probably won’t be able to visit your Canadian site every day. This means handing the reins over to another person, and trusting them to do the job to your satisfaction.

An Easy Solution

Registering a business in Canada just to hire staff to represent your product or service may seem like more trouble than it’s worth. An Employer of Record solution, similar to a PEO in the U.S., may be able to take that trouble off your hands and allow you to stay where in you are. They can assess whether registering a business in Canada is a necessary step to your expansion or if they can employ your workforce from a legal and legislative compliance perspective in Canada allowing you representation without the hassle of understanding foreign employment compliance.

A professional payroll service provider, like The Payroll Edge, can help you navigate these issues, and get your Canadian workforce up and running. 

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

Topics: US Firms Expanding into Canada, U.S. Companies operating in Canada, U.S. Business operating in Canada

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

How US Companies Get into Trouble with Canadian Payroll Laws

Posted by Ray Gonder

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Mar 12, 2014 9:05:00 AM

how us companies get into trouble with canadian payroll lawsAs a US-based business, you may be considering an expansion into Canadian markets. While that’s a great idea for your future growth, there are some pitfalls that you should be aware of. A lot of US businesses get into trouble trying to deal with Canadian payroll laws. Like US laws, Canadian payroll laws are complex, voluminous, and require a great deal of education and experience to navigate successfully. Companies that fail to navigate those laws can face considerable fines, penalties, and back payments. Worse yet, some businesses choose to bypass Canadian payroll laws, leading to criminal penalties in addition to those fines. While there are many ways for US businesses to get into trouble with Canadian payroll laws – ignorance and worker misclassification are two of the most common pitfalls.

What You Don’t Know Can Hurt You

Canadian payroll laws are every bit as complex as US laws, but that’s where the similarities end. Despite our many cultural similarities, Canada and the US have distinctly different legal systems. Learning the rules of Canadian payroll law takes a considerable investment of time and energy, and still doesn’t guarantee an understanding of how those laws are applied in the field. As with any laws, the written word of Canadian payroll laws can differ greatly from their practical application. The only way to learn those differences is through experience.

US businesses may not have a lot of opportunities to gain the necessary experience, especially if they’re managing a Canadian presence from inside the US. That lack of experience can quickly lead to problems with the Canada Revenue Agency (CRA). During your expansion, those problems can cause delays and extra costs. After your expansion is completed, any problems can lead to large fines, as well as back payments to employees and government agencies. In extreme cases, your Canadian presence could be shattered, and you could lose the privilege of operating in Canada.

Avoiding the Law is the same as Breaking the Law

Some US businesses think that the easiest way to deal with Canadian payroll laws is to simply not deal with them. They hire Canadian employees as independent contractors, pay them directly, and leave it to the individuals to take care of their own payroll obligations. This may appear on the surface to be an easy workaround, but it’s also completely illegal. Canadian law is very clear on who qualifies as an independent contractor, and under what circumstances their services can be used. If you truly need the services of an independent contractor, then you’re in the clear. However, if you’re found to be using the independent contractor classification to avoid Canadian payroll laws, there’s a good chance you’ll be facing criminal penalties.

Avoiding Trouble and Hassles

Typically, when a US business gets in trouble with Canadian payroll laws, it’s because they’re looking for an easy way to do things. Often, these businesses overlook the easiest legal way to navigate Canadian laws. With the help of an Employer of Record (EOR), like The Payroll Edge, you can quickly hire and pay Canadian employees, without the hassle of learning new laws, and without the risk of trying to bypass those laws. The suite of EOR (Employer of Record) services offered by The Payroll Edge includes everything from payroll filing and remittances, to workplace safety compliance. They can help you establish, operate, and maintain your Canadian expansion. Thanks to their highly trained and experienced staff, they can ensure that your expansion adheres to all relevant statutes, and operates well within the limits of the law.  

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

Topics: EOR, U.S. Companies operating in Canada, Canadian Payroll Laws

How US Companies Legally Pay their Canadian Employees

Posted by Stacey Duggan

|

Feb 28, 2014 9:00:00 AM

How US Companies Legally Pay their Canadian EmployeesGiven our cultural similarities, many US businesses assume that all they have to do to pay Canadian employees is slap some international postage on a check. Once you start looking into the matter, you’ll quickly realize that there are a lot of legal and administrative hurdles you have to overcome to pay Canadian employees. These hurdles are so problematic, that many US businesses either give up on operating in Canada, or try to find ways to “work around” the laws. Either of these options can end up costing you money, whether it’s in unrealized revenue or in fines and penalties. On the other hand, there is an easy, affordable way to pay Canadian employees without having to jump through a lot of hoops.

Employer of Record

If you need to pay Canadian employees, you can spend months jumping through hoops, or you can spend a few minutes on the telephone. An Employer of Record (EOR) is a Canadian business that offers administration and management services to foreign companies paying Canadian employees. They operate as completely legal Canadian entities, with all of the accounts and infrastructure required by law. You pay them directly and, in return, they hire and manage Canadian employees, calculate and distribute payroll, handle tax and insurance withholdings, and otherwise oversee your business processes inside of Canada.

Rapid Deployment

Expanding your business into Canada can take months. Securing a physical address, finding a bank, setting up insurance, and government inspections will all take time and cost money. Until you’ve completed each and every step to everyone’s complete satisfaction, you can’t do a single dollar’s worth of business in Canada. That’s months of time and expenses between you and your first sale.

EORs are already established and ready to start handling your business immediately. They’ve cleared all the hurdles, jumped through all the hoops, and have been successfully helping other US businesses for years. Instead of having months of red tape standing between you and a Canadian expansion, pick up the telephone and make a long distance phone call!

Better Results

One major problem faced by US businesses is their lack of experience with Canadian employment rules and payroll laws. The laws are complex and constantly changing. Without constant training and adequate experience, it’s easy to make expensive mistakes. When you’re trying to expand, those mistakes will slow down the process, costing you more time and money. After you hire Canadian employees, mistakes could close your doors and expose you to criminal penalties.

Canadian EORs are professional employers. Their primary business is the hiring, management, and payment of Canadian employees. Day in, and day out, they deal with all aspects of Canadian employment and payroll regulations. On top of their daily experience, they also train constantly to keep up with changes to the law, meet with regulators, auditors, and legislators, and even provide input on proposed changes to the legislation. At the end of the day, an EOR is far less likely to make a mistake that will end up costing you time and money.

Expand Quickly, and Legally, with a Canadian EOR

A Canadian EOR, like The Payroll Edge, can provide all of the services you need to get your expansion up and running quickly. And, unlike the do-it-yourself route, you won’t have to deal with mistakes, misunderstandings, and red tape along the way. Why reinvent the wheel, when The Payroll Edge can have you rolling smoothly in no time?

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

Topics: Canadian Payroll, Employer of Record, U.S. Companies operating in Canada

How Canadian Payroll Keeps US Companies from Operating in Canada

Posted by Stacey Duggan

|

Feb 11, 2014 9:00:00 AM

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

Jumping Through Hoops Yourself

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

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

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

Letting Someone Else Jump Through Hoops

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

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

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

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

US Companies Get in Trouble Hiring Canadian Independent Contractors

Posted by Ray Gonder

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Feb 5, 2014 9:00:00 AM

US Companies Get in Trouble Hiring Canadian Independent Contractors2Given the complexities of operating a US-based business in Canada, it’s no surprise that some employers look for loopholes and workarounds. One workaround that US businesses have tried is to hire Canadians as independent contractors instead of employees. The US Company may feel that this removes the need for them to have a business presence north of the border as they merely have to direct funds from their bank account to the independent contractors.  

Unfortunately, hiring Canadian independent contractors can cause numerous legal and business issues.

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

An Employee by any other Name

If you need an independent contractor in Canada, that’s perfectly acceptable and completely legal. If you need an employee in Canada, and use an independent contractor to avoid tax withholdings and other employment regulations, then you’ve broken the law. Just like the IRS, the Canadian Revenue Agency (CRA) has strict rules around qualifying someone as an independent contractor.  The CRA has expressed a direct interest in eliminating the underground economies that have been created by employers abusing the independent contractor system. They are actively looking for businesses that abuse the system, and the penalties are severe.

Loss of Control

Unsurprisingly, an independent contractor is expected to be independent. They set their own hours, provide their own tools, and can subcontract their work to other people. By law, you have very little say in how they conduct their business. As a manager or owner, this gives you very little control over someone who is working for you. If they’re being used legitimately as a contractor, that’s rarely a problem. However, if you’re using them as a de-facto employee, then you have issues. Training them on your business processes, giving them goals to achieve and the tools to accomplish them and having the expectation that they are only working for you, all cross the line between contractor and employee.

Why Bother?

The only reason to use independent contractors as a workaround is convenience. Setting up all of the accounts and infrastructure to pay workers legitimately is difficult and time consuming. Instead of dealing with all of the legal and administrative complexities, some employers choose to pay contractors directly, expecting them to handle all of the legal and tax requirements themselves. While this may be simpler, it’s illegal and can result in huge fines, back payments, criminal penalties, and the loss of your right to conduct business in Canada. To make matters worse, it’s all pointless, since there’s a way that’s just as easy, yet completely legal.

Employers of Record

If you want the convenience of paying a flat rate, without having to worry about tax withholdings, workplace regulations, or business infrastructure, then you want an Employer of Record (EOR). They operate in the same way as an American Professional Employer Organization (PEO). An EOR already has all of the infrastructure, accounts, and insurance necessary to directly hire Canadian employees. You pay the EOR directly, then they hire and pay employees, handle withholdings and remittances, and ensure workplace compliance. You get the convenience of a contractor, without the legal risk, and without ceding control.

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

Topics: Payroll Service Provider, Outsourced Payroll Service, Canadian Payroll, Canadian Payroll Deductions, EOR, Employer of Record, U.S. Companies operating in Canada, CRA, Canadian Employer of Record, Independent Contractor, CRA Compliant

Where to Find Professional Employer Organizations (PEOs) in Canada

Posted by Stacey Duggan

|

Jan 31, 2014 9:00:00 AM

Where to Find Professional Employer Organizations PEOs in Canada2As a US-based business, you’re probably already familiar with the services a Professional Employer Organization (PEO) can offer. With their many benefits, it’s no surprise that PEOs are becoming increasingly popular in the States. For a US-based business wishing to hire Canadian workers to service their Canadian clients, the benefits of a Professional Employer Organization are even greater.

Not Finding What You’re Looking For?

If you’re looking for a Professional Employer Organization in Canada, you should be aware that they operate under a different name. In Canada, a PEO operates under the title of Employer of Record (EOR). An EOR offers the same services and benefits as a PEO, along with a number of services specific to businesses trying to establish a Canadian presence. For US-based businesses, these professional employers are especially helpful when trying to service clients north of the border but not looking to establish a bricks and mortar location in Canada.

Services for US-Based Businesses

When hiring in Canada, there are some major obstacles that must first be overcome. There’s the difference in pay structures, benefits, employment standards and of course the liability of not knowing how another country operates when it comes to employment. These obstacles are so confusing that many US businesses simply give up on their expansion plans. With the help of an EOR, you can realize your dream of a Canadian expansion without having to deal with any of these obstacles directly.

An EOR, like The Payroll Edge, can provide you with all of the services you need to hire your Canadian staff all the while being completely legal and in compliance with Canadian employment law. Since they already operate in Canada, they already have all of the necessary infrastructure and accounts to begin hiring and paying your Canadian employees. Setting all of this up on your own is an expensive and time-consuming process that leaves a lot of room for errors that will add to the time and cost of your expansion.

With an established Canadian EOR, you don’t have to worry about any of the following;

  • Creating a physical presence for your business in Canada
  • Establishing all necessary government accounts
  • Setting up banking and insurance accounts for your business
  • Ensuring workplace safety and continued compliance
  • Providing government mandated training for all Canadian employees
  • Withholding and remitting all necessary taxes and fees from employees’ payroll
  • Calculating, distributing, and rectifying payments to employees and contractors
  • Handling interactions with multiple layers of government bureaucracy

As the employer of record for your Canadian workforce, they take complete care of all of the above allowing you to service your Canadian clients seamlessly. 

Experience Trumps Perseverance

As a business owner, you probably have a “can-do” attitude toward running your company. While that attitude is admirable, it can be misplaced if it negatively impacts your business. Trying to establish a Canadian presence on your own opens you up to a lot of costly mistakes. If you make any mistakes during the expansion, it will cost time and money to fix them. If you make any mistakes after the expansion, you may be on the hook for fines, back payments, and even criminal actions. With the experienced, professional help of an EOR, you can have your Canadian workforce without the red tape of having a business presence north of the border.

A Canadian EOR is where you will find a Professional Employer Organization in Canada.

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

Topics: Outsourced Payroll Service, Canadian Payroll, EOR, Professional Employer Organization, PEO, U.S. Companies operating in Canada, Canadian Payroll Calculator

How U.S. Companies Manage Their Payroll in Canada

Posted by Stacey Duggan

|

Dec 13, 2013 9:00:00 AM

How US Companies Manage Their Payroll in CanadaFor US-based businesses, managing payroll in Canada presents a unique set of challenges. To legally hire and pay Canadian employees, there are numerous obstacles that must first be overcome. The cultural similarities between the US and Canada can give the impression that managing payroll in Canada isn’t that different from managing payroll in the US. Unfortunately, nothing could be farther from the truth. Canadian payroll regulations are wholly different from US regulations. From the ground up, managing payroll in Canada is a completely different animal. US-based businesses that aren’t fully aware of these differences at the outset are sure to make costly mistakes along the way.

A Solo Act

A lot of US businesses choose to try and manage their Canadian payroll needs by themselves. They believe that using their existing HR staff and payroll system will save them money in the long run. Once they get into it, they often realize that their existing payroll management simply can’t be adapted to manage their payroll in Canada. The vast differences between the Canadian and US systems make it nearly impossible to use the same personnel and processes to handle payroll in both countries. This makes it necessary for the US-based business to set up two entirely separate payroll departments. In effect, trying to save money will immediately double the cost of managing payroll.

Setting up a separate payroll system is just the first of many obstacles that the business will face. Before hiring their first Canadian employee, they must also register a business presence inside of Canada, set up accounts with Canadian regulatory authorities and agencies, establish banking and insurance infrastructure, and make sure their business complies with all federal and provincial statutes. Once all of those steps are completed, they can then begin going through all of the steps to hire and retain employees. At a minimum, those steps will require verification and classification of employees, managing withholdings and remittances, ensuring compliance with workplace safety and training requirements, and keeping up with the frequently changing payroll regulations. Before a business issues its first paycheque, it will invest hundreds of work-hours into just making sure that the cheques will be legal and legitimate.

In it Together

For US businesses that don’t have the time to essentially start a new company across the border, there are companies that provide Canadian Employer of Record (EOR) services. These are the northern cousins of professional employer organizations (PEO). They not only take over the management of payroll but mitigate the risk of hiring someone in an unknown country by taking responsibility of all government compliance.  With an EOR in Canada, a U.S. company does not have to maintain a business presence north of the border or keep up to date with the many rules and regulations that change from Province to Province.

There are other significant advantages to retaining the services of an EOR.

A Canadian EOR helps maximize efficiency while minimizing risk. They have the training and tools to deal with the most convoluted aspects of payroll and human resources in Canada. This helps them quickly and accurately handle all of your payroll needs, from worker classification to taxation remittances. An EOR will also have an existing infrastructure for banking and insurance, along with all of the necessary government accounts. And when it comes to the variety of issues that can arise when hiring a worker, an EOR will take care of them as well from employment agreements, harassment claims, employee discipline and termination all within the compounds of Canadian law.

If you’re looking for a less risky, more efficient way to expand into Canada, an EOR is for you.

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

Topics: Payroll Service Provider, Canadian Payroll Deductions, Canadian Payroll Regulations, EOR, PEO, Professional Employer Organizations, Employer of Record, U.S. Companies operating in Canada, Payroll Tax Laws in Canada

Understanding the Intricacies of Canadian Government Regulations

Posted by Karen McMullen

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Nov 29, 2013 9:00:00 AM

Payroll Service Providers Understand the Intricacies of Canadian Government RegulationsCanadian payroll regulations are complex, cumbersome, and unforgiving. Navigating them can be difficult and time consuming for businesses on both sides of the Canada-US border. The time, effort, and money required to maintain compliance can all go to waste if a single error is made. Using a Canadian payroll service provider is an inexpensive, hassle-free way to avoid those errors. Unlike an in-house payroll department, payroll isn’t a part-time job for a Canadian payroll service provider. They handle payroll requirements for a wide variety of clients every day of the week. This constant training and experience gives them the expertise they need to navigate the complicated and ever-changing payroll requirements. Whether you’re a Canadian business looking to simplify your payroll needs, or a US-based business considering an expansion into Canadian markets, a Canadian payroll service provider can help you maintain compliance.

If it Was Easy, Everyone Would Do it

A lot of time and effort goes into learning how to deal with Canadian payroll regulations. The initial training and education is just the tip of the iceberg. There are also conferences to attend, continuing education to pursue, and new regulations to learn about. Handling complex payroll regulations also requires the latest software. That software is expensive to purchase, set up, and maintain, and also requires initial and continuing training. Handling all of this in-house requires a large initial investment, along with considerable recurring costs.

A Canadian payroll service provider will already have educational systems in place, along with all of the necessary software. It’s their job to have the best tools and knowledge to handle payroll regulations. For any other company, these are additional expenses—for a Canadian payroll service provider, these are just the basic costs of running their business. Since they manage payroll for a large number of clients, these costs are spread out over a large customer base. That way, none of their clients have to absorb these expenses alone.

Domestic Partnership

For Canadian businesses, a Canadian payroll service provider can help ease administrative costs and burdens. They can manage payroll for multiple jobsites, employee classifications, and even independent contractors. Their in-depth knowledge of payroll regulations makes it easy for them to navigate even the murkiest legal waters. With their help, businesses can maintain compliance with payroll regulations, health and safety policies, and other workplace requirements. This eases the burden on in-house administrators, allowing them to focus on tasks that are more directly related to the success of the business.

Crossing the Border

For US businesses that are considering a move into Canadian markets, a payroll service provider can help with much more than just payroll. They can help establish a legal presence in Canada, as well as set up the necessary infrastructure for banking, insurance, and government compliance. All of these things are necessary to legally do business in Canada, and they can be difficult and time-consuming to try and set up on your own. A Canadian payroll service provider can help you get your Canadian expansion up and running faster and with fewer legal hurdles. Going it alone is always an option, but not always a good one.

7 Signs It's Time to Outsource Payroll

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

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