Expanding Your Business: Payroll in Canada

Payroll in Canada

Canada has few barriers to entry and its proximity to the U.S. 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.

Canada Payroll Requirements

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 must send reporting to the CRA including:  

• T4 Slips (Statement of Remuneration)
• T4 Summary
• T4 Slips and Summary
• RL-1 Slips (Releve 1)
• RL-1 Summary
• RL-2 and RL-3 (if applicable) 

Employers also need to check and update outstanding entries to payroll (manual and void/canceled 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.

Canada Employer Requirements

Other employer requirements include:

• Complete and submit summaries and reports to Revenue Quebec (RQ)
• CNESST Commission des norms, de l’equire, de la sante dt de la securite du travail
• Workers Safety and Compensation Board - Reporting and Filing
• 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 

Holidays in Canada

When planning to hire in Canada, it's crucial to be aware of the official holidays when employees may not be available for work.

• January 1: New Year’s Day
• March 29: Good Friday
• March 31: Easter Monday 
• May 20: Victoria Day
• June 24: Saint-Jean-Baptiste Day
• July 1: Canada Day
• August 5: Civic Holiday (excluding Quebec)
• September 2: Labour Day
• September 30: National Day for Truth and Reconciliation
• October 14: Thanksgiving Day
• November 11: Remembrance Day
• December 25: Christmas Day
• December 26: Boxing Day  

Easily Hire and Pay Employees in Canada

Is Canada in your hiring or expansion plans? Paylocity can help. Our cloud-based platform helps you navigate the waters of international payroll.

And don’t sweat complicated compliance — our hybrid service model includes a U.S.-based team and in-country experts in Canada to help when you have questions.

Want to learn more? Request a demo today!