Changing payroll providers can feel overwhelming, but in our experience, challenging things are always worth it!
If you're changing payroll providers to join Humi – welcome, we're glad you're here! However, to make changing payroll providers painless, there are a few critical things you should do before cancelling your account with your current provider.
This guide will walk you through the steps you should take to make your transition to Humi Payroll easy.
Humi'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 One – Notify your Current Payroll Provider
The first step to changing payroll providers is letting your current provider know that you want to cancel your account. However, we include 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 Humi Payroll implementation.
Step Two – Request Documents from your Current Payroll Provider
Before closing your account with your current provider, there are several documents you should request to make your transition to Humi seamless.
You should request the following documents:
- ROEs for all employees
- Copies of all Payroll Register Reports up until your final payroll
- Paystubs for all employees (including terminated employees)
A) Request ROEs for a "Change in Payroll Provider"
It's common knowledge that ROEs are required when an employee is terminated but did you know they must be submitted to Service Canada when changing payroll providers?
The most significant difference between these ROEs is that you won't give this one to your employees. Instead, before changing to your new payroll provider, your current payroll provider should submit them to Service Canada for all employees after processing the final payroll.
This ensures that Service Canada has comprehensive records of your employees' insurable hours and earnings. Tip: The reason code is "K" - Change in payroll provider. Learn more from the CRA website.
If your current provider doesn't submit the ROEs to Service Canada, Humi (your new payroll provider) won't have access to a detailed "per pay period breakdown of insurable earnings" to prepare ROEs on your behalf. This is why it's crucial to confirm that they've submitted your ROEs after processing your final payroll with them.
Important note about ROE Web Authorization
ROE Web Authorization allows your payroll provider to submit payroll-related items to Service Canada on your behalf.
To avoid complications, if your current provider has ROE Web Authorization, you must inform Humi so that we can register as the new "Primary Officer (PO)."
If you don't complete this step, when Humi submits a new ROE authorization request, Service Canada may deactivate the existing ROE Web Authorization for your current provider.
If this happens before your current provider submits your ROEs, they will no longer have access to submit them, creating problems and taking time to resolve.
For this reason, we highly recommend coordinating your payroll transition so that your current provider completes the ROE issuance and submission for all employees before allowing Humi access to ROE Web Authorization.
B) Request Copies of All Payroll Register Reports Up Until Your Final Payroll
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.
Many companies decide to change payroll providers at the end of the year because it's a little less complicated since the former provider will provide all necessary year-end paperwork. In addition, the new payroll provider can start from scratch in the new tax year.
However, suppose you're switching payroll providers mid-year. In that case, the information on these Payroll Register Reports will be invaluable and help make it easier to get set up with your new payroll provider.
It's vital to have access to this information for all terminated employees so that your new provider has all the information required to create all 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. Therefore, before cancelling your account with your current provider, we recommend collecting all payroll records they maintained for you. Accessing this critical data can become complicated and time-consuming once your account is cancelled, especially if you need it quickly.
C) Request Paystubs for All Employees (including terminated employees)
We recommend asking your current payroll provider to provide you with electronic copies of all previous paystubs for active and terminated employees. This step is more of a precaution, so you're prepared if an employee asks for their paystub while you're transitioning to Humi as your new payroll provider.
Humi won't have access to any paystubs or payroll information before onboarding with us, so you should request this before cancelling your account with your current provider.
Step Three – Provide Written Instructions to Ensure that your Current Payroll Provider Doesn't File Year-End Reports for you
When you change payroll providers, your new payroll provider becomes responsible for filing all year-end reports.
We don't like taking any chances when it comes to payroll, so to cover all your bases, we recommend emailing your current provider with written instructions requesting that they don't file any of your Year-End reports.
Suppose there's a scenario where both Humi (your new provider) and your former provider submit your year-end reports. In that case, it could trigger a Pensionable and Insurable Earnings Review (PIER), and we don't want that to happen!
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.