<span id="hs_cos_wrapper_name" class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_text" style="" data-hs-cos-general-type="meta_field" data-hs-cos-type="text" >A PEO Answers Your Top 4 Questions about International Expansion</span>

Expanding your business is both an exciting prospect and a challenging one. If you’re thinking about expanding across international borders any time soon, you’re probably asking a lot of questions.


Who is more qualified to answer your questions about expansion than a team of professionals who deal with expansions every day? Take a gander at some of the top questions people ask about international expansion, and discover the answers from the team at the Payroll Edge, a professional employer organization.

1. Who Files Employer Taxes, Employment Deductions, and Other Deductions?

This is an excellent question many international employers wonder about. Will they need to handle tax filings and deductions on their own, or is there someone who could look after this task for them?

It’s easy to see why this question comes up. Most countries have arcane systems for filing payroll taxes and remittances. The process is confusing, the rules aren’t clear, and making mistakes has high costs.


The good news is that a PEO or other payroll service provider can file these taxes for you. If they’re handling your payroll, they’ll collect the deductions and handle remittances. For end-of-year taxes, you may need to negotiate adding this service. In many cases, it makes sense to have your payroll provider handle your taxes too.

2. What Are the Differences between US Healthcare and Other Countries?

Canada, the UK, and other countries have public healthcare systems, which is much different than the system found in the US. The US system is entirely privatized and handled through insurance or out-of-pocket payments from the patient.


The healthcare system of any country can be baffling for an international employer. US employers are often overwhelmed by the public system in Canada and other countries. Companies entering the US might find themselves at a loss for understanding what they need to offer and how to go about offering it.


In Canada and other countries, the public system is funded by taxes. Some jurisdictions, like British Columbia, will deduct healthcare subsidies directly from an employee’s paycheck. Employers should check the rules of their province to see how to handle these deductions.


Privatized healthcare may be offered through insurance providers, similar to the US, although at a lesser scale. Insurance benefits in the US must cover basic medical needs. In Canada and other countries, health insurance is supplemental and may cover costs like dental care and vision care.

An easy way to discover what you must offer in any country is to talk to a PEO. They can guide you on what the minimum requirements for your business are, as well as help you pick plans that will keep your employees happy.

3. What’s the Canadian Equivalent of a 401k?

The 401k is a popular retirement savings option in the US. Canada and other countries also have options for retirement savings, but they’re not called a 401k.


Canada offers a public pension program, called the Canada Pension Plan. Employees and employers contribute to the program through payroll deductions. As a result, you don’t need to offer your employees anything more for their retirement savings.


Some employers do want to offer more. The most common option is known as a Registered Retirement Savings Plan, or RRSP. This is a type of account you or an employee may regularly contribute to. The money added to the account can then be invested, often in mutual funds or bonds.

The RRSP is used as a tax reduction method as well. Employees in high tax brackets can defer paying taxes on their RRSP contributions until they withdraw the funds. Most Canadians’ income drops during their retirement years, which puts them in a lower tax bracket. When they withdraw funds from their RRSP, they’ll pay less tax.


Finally, the RRSP is registered because the government has information on its value. This is then used to determine the CPP payment a Canadian is entitled to in their retirement years.

4. How Can You Terminate an Employee If There Is No At-Will Employment?

One of the major differences between Canada and the US is the existence of “at will” employment. In the US, either the employee or employer may terminate employment at any point in time. Unless there’s an agreement about severance, negotiated between employer and employee, there are no repercussions.


The same is not true in Canada. Employees must be given either appropriate notice or severance pay equivalent to proper notification. You can fire someone on the spot, but you’ll need to pay them two weeks’ worth of wages or more, depending on how long they’ve been with you.

You’ll also need a justifiable cause to terminate the employee this way. All in all, it’s best to give two weeks’ notice.


These are just some of the most common questions from international employers. Chances are you still have more. If you’re looking for answers, then get in touch with a PEO.