Canadian payroll compliance can improve with technology
August 21, 2013
Canadian payroll legislation is more complicated than in other countries because of jurisdictions regarding the separate provinces. Firms have many challenges in managing employees and payroll technology can help companies handle complex regulations.
Canada is one of the best countries in the world for starting a new businesses, but the government does not encourage businesses to grow or drive innovation, which is critical for startup success, according to The Vancouver Sun. Growth-oriented companies are more likely to adopt technology solutions that will help them advance and stay competitive in the market. While startups are seen as a phenomenon in the technology industry, entrepreneurs are creating new businesses in many different sectors, and each of these has separate needs. Most of these firms will stay small, but some will evolve into midsized businesses over time.
Similar to the U.S., a small portion of quickly growing companies can claim a significant amount of market share. With rapid expansion, some entrepreneurs may find themselves with payroll needs that they are unable to manage on their own.
Payroll software helps firms adapt to new market conditions
Canadian payroll is extremely complex due to the 14 separate jurisdictions regarding provincial income tax, according to Canadian HR Reporter. In addition to the number of jurisdictions, the rules used to determine them are also complicated. Typically, these jurisdictions are mutually exclusive, meaning if one province's income tax applies, no other provincial or territorial income taxes can. However, this changes over time and payroll management can be more complicated for employers who have employees that work in multiple provinces.
If an employee works in more than one province during the same pay period, employers are supposed to use the jurisdiction where most of the time was spent to keep with Canadian payroll compliance. However, understanding payroll jurisdictions is further complicated if employees are working in Quebec for part of the time. In the province, different payroll tax regulations are in practice, even if an employee begins working in Quebec in the middle of a pay period.
It can be difficult for entrepreneurs to keep up with complicated and changing payroll legislation on top of running a growing business. Payroll software can help managers keep up with the changing needs of an expanding company while complying with regulations.