Companies expanding their operations into Canada open up a world of opportunity – but challenges come alongside the benefits. Payroll management is among those challenges, whether your company is considering moving employees abroad or hiring fresh staff in-country.
Employment laws, payroll regulations and income tax requirements vary between the federal government and the 10 provinces and three territories. Bradford Jacobs’ Employer of Record (EOR) payroll solutions will navigate around these potential pitfalls effectively and efficiently by putting into action our comprehensive knowledge of federal and provincial taxes and payroll regulations.
As part of our service, we file returns and associated payments for wages tax and social security contributions directly from our payroll system to the relevant authorities. Staying up to date with federal and provincial laws is a vital element of our payroll services. Our role in consulting with the Canada Revenue Agency includes:
- Confirming the requirement to make payroll deductions. Any remuneration relating to employment requires registering for payroll.
- Obtaining the employee’s Social Insurance Number (SIN) within three days of their starting work, and completing Form TD1 (Personal Tax Credits Return) within seven days of starting and before paying the employee.
- Obtaining a Business Number (BN) from the federal government or a Québec Enterprise Number for those incorporating in that province.
- Opening a payroll program account to obtain the payroll number needed to remit deductions and file returns. We register for the program account as soon as hiring begins.
- Calculating deductions and contributions for Canadian Pension Plan (CPP), Employment Insurance (EI) and income tax.
- Submitting payroll information returns, completing, and filing year-end summary of all employees’ pay and deductions and remitting deductions for CPP, EI and income tax. In most cases deductions are filed by the 15th of the month after employees are paid. Remuneration includes taxable benefits and allowances. Different rules may apply to Small and Medium Enterprises (SMEs).
Additional payroll support includes:
- Negotiating any tax exemptions for skilled expats (where applicable).
- Reconciling federal, and any provincial, territorial and local taxes to assess for refunds or extra payments.
- Calculating employees’ monthly salary and sending their pay slips.
- Researching for any available tax incentives.
- Submitting employees’ and employers’ wage tax returns.
- Creating and submitting your company’s annual accounts and year-end statements.
- Creating payment schedules for salaries and any insurance contributions (if applicable).
- Ensuring accurate personal income tax returns are filed for you and your employees, where required.
The above checklist highlights why the vast percentage of foreign companies expanding into Canada’s strictly regulated business environment hand their payroll to EOR providers such as Bradford Jacobs. By outsourcing payroll, your company complies with tax and employment regulations without risking sanctions or financial penalties for late or incomplete filing. You focus on your goals and expansion, free of any concerns over payroll.
