We may share a border with Canada, but when it comes to payroll and HR management, we’re nothing alike. Canada has a very different payroll system governed by different laws and regulations from here in the United States. U.S.-based employers can run into trouble by failing to comply with Canadian regulations. This can lead many U.S. employers hesitant to expand across our Northern border for fear of making a costly mistake by relying on misinformation or erroneous practices.
Not expanding out of fear and a lack of understanding can be just as costly in the long-run, however, as you miss out on valuable resources and business opportunities. Instead of staying small and keeping to where you already know the ins and outs of the payroll laws and regulations, hire one of the many professional payroll services companies who can offer guidance and payroll support.
Reasons to use payroll services companies for support with payroll in Canada
- To ensure you stay in compliance
Canadian payroll is governed by over 190 regulatory legislative requirements. If that’s not enough, these requirements often change over time. Staying up to date on the mandatory deductions, tax rules, and the intricacies of the laws and regulations governing Canadian payroll is essential if you want to avoid costly fines. Payroll services companies with expertise in Canadian payroll can protect you and your business. - To avoid costly penalties
It’s no secret the penalty for failing to follow the guidelines with Canadian payroll can be costly. Simply by failing to remit deductions on time, you could face a penalty anywhere from 3% to 15%. the three most costly mistakes employers often make are missing the deadline to file their remittance deductions, miscalculating their Canadian employee’s taxable income, and failing to report the taxable employment benefits in the correct period. Don’t let a missed deadlines, miscalculations, or improper reporting cost you and your business. Payroll services companies can ensure you stay on-time and in-compliance. - Payroll services companies provide more than just payroll support
Beyond cutting cheques (which with the myriad deductions and taxes in the Canadian payroll system is task enough), payroll services companies can provide you with ongoing Human Resources support, and guidance on dealing with sensitive employee issues. They can also help with ESA and OHSA compliance and those pesky government remittances. - It will save you time
With payroll services companies, you’re left with only one report to approve and a single invoice to pay. As any business owner who has ever managed their payroll in-house will tell you, this could free up a world of time. In-house payroll processing demands huge chunks of employers’ time, from totaling hours to performing gross-to-net calculations for each and every employee, then calculating and depositing the requisite payroll taxes, and finally preparing and filing tax returns accurately and by their due date. Imagine how much more revenue you could earn if you were able to use that time for core business needs instead? - Your CPA thinks you should
The vast majority of certified public accountants (over 85% to be exact), agree that small business owners need to employ professional payroll services companies. The rules and regulations governing payroll are far too complex to leave them to a vague understanding. For owners of small- and medium-sized businesses, look for payroll services companies who offer automated phone systems and employee-access tools such as a web portal.
A final note on the Canadian Revenue Agency
No business owner enjoys payroll processing. Whether you’re operating within one border or thinking of expanding across multiple, payroll services companies can be a huge asset to your business. If you are planning to expand to Canada, leveraging payroll processing companies becomes even more imperative.
Small businesses have been identified as one of the largest sources of uncollected taxes in Canada. As such, the Canadian Revenue Agency is making enforcing payroll tax policies on small businesses a priority. The Canadian Revenue Agency is watching closely, which means you’d be wise to hire someone whose full-time job is watching the Canadian Revenue Agency and its changing laws and regulations closely. Save yourself headaches, time, and penalties by outsourcing your payroll to a professional payroll services company.
