Canada has few barriers to entry and its close proximity to the US provides businesses a great place to start with global expansion. There are a few factors to consider when starting a business or expanding in Canada.
Canada has strict residency requirements for company board members, as well as tax regulations related to resident vs. non-resident status employees. While Canada is officially bi-lingual English and French, businesses in Quebec are required to communicate in French and comply with a different set of laws and regulations. Having a local partner who can guide you through the language and customs of each province is vital to ensure compliance.
There are unique statutory deductions and filing requirements based on the province or region in Canada. Pension plans, employment insurance, and income tax contributions are just the beginning.
Employers must file payroll with the Canada Revenue Agency (CRA), Revenue Quebec (if applicable), as well as federal and provincial taxes. At the end of each year, employers have to send reporting to CRA including:
- T4 Employment income
- T4A Other pensions & annuities
Employers also need to check and update outstanding entries to payroll (manual and void/cancelled checks), balance the T4/RL-1 report to the payroll register and validate the earnings and deductions, and validate social insurance numbers and pensionable earnings. Other employer requirements include:
- Reporting taxable benefits on each pay (either when received or as used)
- Complete and file RQ summaries
- Commission de cormes du travail (CNT)
- Workforce Skills Development and Recognition Fund (WSDRF)
- Declaration des activites de formation (only for Quebec employers who pay WSDRF)
- File employer health tax returns, workers compensation/CSST annual return, RQ Annual summary reports
Funding options for Canada payroll
There are several options for funding employee payroll in Canada. We provide integrated money movement services so you can fund in USD and settle in the local currency, or use your in-country bank accounts to fund payroll.
If you’re just getting started in Canada or are looking to expand, we can help you navigate payroll in Canada. Our cloud-based payroll platform gives you real-time access to your payroll, in-country experts to help when questions come up, and integrated global solutions to ensure compliance. To get started and learn more about simplifying payroll in Canada, click here