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Changing payroll providers can feel overwhelming, but preparation makes the process smooth. This article guides you through the three critical steps you must take with your current provider before transitioning to Employment Hero to ensure a seamless implementation.
Employment Hero's 3-Step Guide for Changing Payroll Providers
Step 1 – Notify your current payroll provider
Step 2 – Request these documents from your current payroll provider:
- ROEs for employees
- Copies of all "Payroll Register" reports up until your final payroll
- Paystubs for all employees, including terminated employees
Step 3 – Provide written instructions to ensure that your former payroll provider doesn't file Year-End reports for you
Getting started
The first step to changing payroll providers is letting your current provider know that you want to cancel your account. We list this as Step 1 because many payroll providers require ample cancellation notice, typically between 30-90 days, which could alter the timing of your plans.
Review your contract or contact your current provider to see how much notice of cancellation they need to prevent delays in your Employment Hero Payroll implementation.
Before closing your account with your current provider, you must ensure Records of Employment (ROEs) are handled correctly.
While usually for terminations, ROEs must be submitted to Service Canada when changing payroll providers.
Notable differences about these ROEs:
- Do not give these to employees: Your current provider should submit them directly to Service Canada for all employees after processing the final payroll.
- Reason Code K: Ensure they use the reason code "K" (Change in payroll provider).
- Why this matters: If your current provider doesn't submit these, Employment Hero won't have the detailed breakdown of insurable earnings required to prepare future ROEs on your behalf.
Important note about ROE Web Authorization
If your current provider has ROE Web Authorization, you must inform Employment Hero so we can register as the new "Primary Officer (PO)."
However, do not do this too early. If Employment Hero submits a new authorization request before your current provider submits your ROEs, Service Canada may deactivate your current provider's access. We highly recommend coordinating the transition so that your current provider completes all ROE submissions before allowing Employment Hero access to ROE Web Authorization.
Payroll Register Reports contain beneficial details of each payroll you processed for each employee with your current provider, including the breakdown of net wages, payroll taxes, and more.
If you are switching payroll providers mid-year, the information on these reports is invaluable for setting up your new account. It is also vital to have this data for all terminated employees so that Employment Hero has the information required to create T4s at Year-End.
Employers must keep Payroll records
Employers must keep payroll records for six years from the end of the last tax year. We recommend collecting all historical payroll records before cancelling your account, as accessing this data later can be difficult and time-consuming.
We recommend asking your current payroll provider for electronic copies of all previous paystubs for both active and terminated employees.
Employment Hero will not have access to paystubs or payroll information that existed before your onboarding. This step is more of a precaution, as collecting these now ensures you are prepared if an employee requests a past paystub during the transition.
When you change payroll providers, your new provider usually becomes responsible for filing all year-end reports. To avoid errors, we recommend emailing your current provider with written instructions requesting that they do not file any of your Year-End reports.
If both Employment Hero and your former provider submit your year-end reports, it could trigger a Pensionable and Insurable Earnings Review (PIER) from the CRA.
We hope this guide is helpful, and we know that changing payroll providers can be less stressful and trouble-free if you follow these steps.