Payroll Processing Why US Businesses With Canadian Employees Will Benefit From Outsourcing


Outsourced payroll solutions

Payroll processing can be a tricky thing for any employer to manage, and for a company that has to manage a payroll processing system for employees in another country, the task can be even more difficult! For this reason, many companies operating internationally choose to outsource their payroll program to a payroll service provider — and if you think that it’s not necessary to do this when managing a U.S. business with Canadian employees, here are just a few ways that the two countries differ when it comes to taxes, employment, and payroll processing:

  • It’s important to understand that firing an employee in Canada is going to cost your business some money; there are actually termination fees for firing an employee, even if your business is based in the U.S. Many people don’t realize that HR issues are often tied closely with payroll processing services, and a good payroll service will help you navigate things like termination fees on top of managing employee paychecks.

  • Taxes a bit different between the U.S. and Canada, but both are very important and are taken out of employee paychecks and sent to the government. Many businesses benefit quite a bit from using a payroll service that knows about tax legislation in both countries, and not just in one country.

  • Vacation days and sick days tend to be a bit more flexible in Canada — again, this is an HR issue but it’s also tied to employee paychecks and overall payroll. Remember that Canada gives its citizens a lot more time off than the U.S. does, and this needs to be accounted for in the company’s payroll processing system.

  • Last but not least, keep in mind that managing an employee payroll processing system in one country can get very, very expensive after even the slightest mistakes — in two countries, the expenses can increase exponentially! Large companies may be able to afford their own payroll departments to manage everything, but small businesses will likely benefit more from outsourcing payroll processing because they’ll be less likely to run into legal issues.

So now it’s your turn to think about it — what can a payroll processing service do for your international business?

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