It looks like you're right - you can have a Professional Employer Organization act on behalf of the employer in regards to payroll, HR and other compliance matt

It looks like you're right - you can have a Professional Employer Organization act on behalf of the employer in regards to payroll, HR and other compliance matters: http://www.salesforcesearch.com/bid/147571/How-Does-a-U-S-Company-Payroll-Their-Canadian-Sales-People http://www.salesforcesearch.com/bid/147571/How-Does-a-U-S-Co... Just don't try and pay employees without doing the proper paperwork with the Canadian government (or use a PEO to do it for you): http://www.pwc.com/ca/en/services/tax/tax-tracks/episode-59-payroll-issues-for-cross-border-employees-receiving-incentive-compensation.html http://www.pwc.com/ca/en/services/tax/tax-tracks/episode-59-... If an employer only has one or two Canadian employees though, they may want to go via the self-employed route I mentioned in an earlier reply.