Expert: Shirley McAllister, CPP, PHR - 10/15/2009

Question
We are a Canadian company but one of our employees moved to North Carolina about a year ago.  We still deduct CDN taxes, yet he is required to submit US taxes as well.  To facilitate switching him to US Payroll, we have set up a Delaware company.  We plan to have additional US employees and would like to set up automatic payments and withholdings thru our US Co.  Any of the payroll services require us to have a US bank account.  We would like to set up a bank account in Canada (for the US Co) in US dollars and pay him from there - it is easier to transfer funds and maintain a single bank relationship.  Are there (simple) automated payroll services (US or CDN) that would provide this (and do remittances)?

Answer
The two that I know of are "Ceridian" and "ADP".   I don't know how it would work with ADP as there is a US ADP and a Canadian ADP. Ceridian is all over the world, they do worldwide.

I don't know about Canadian Banks, but I have used Royal Bank for my ADP payroll for my Canadian Offices. I do not pay them from the states, it was less expensive to have a Canadian Bank, transfer payroll to that account once a month and have ADP pay them and take the money out of the Royal Bank Account.

Shirley

One more thought is the U.S. employee a Canadian citizen? He should not have to pay both Canadian CPP and Social Security. Unless he lives for 5 years or longer in the U.S. he is covered under the tax treaty between Canada and the U.S. , some of his taxes also may be covered. You might want to check out the Canadian /US tax treaty so he is not overpaying on taxes.

http://www.fin.gc.ca/treaties-conventions/USA_-eng.asp

Shirley