Only 30–40% of Canadian small businesses have moved to cloud payroll. What’s actually blocking the other 60% – is it trust, cost, awareness, or something more specific to how Canadians run their businesses?
Ben Richmond: The number that tends to surprise people is that of the roughly 1.05 million Canadian businesses with one to 20 employees, only about 35% have actually digitized their payroll. With that in mind, the real question is what’s holding the rest back, and it comes down to trust and habit far more than price.
Plenty of owners are running payroll the way they always have, whether that’s a spreadsheet, a desktop tool, or a manual process, and the familiar option feels safer than changing it even when it quietly costs them hours every pay run. Owners also have a habit of undervaluing their own time, so when they weigh up software they look at the monthly cost without pricing in the hours they’d get back or the value of knowing their numbers are right in real time.
There’s also a big structural piece to it. A lot of the technology Canadian businesses have been handed over the years was built for the US first and adapted for Canada as an afterthought, so it never quite fit the way people here actually run their businesses. That’s changing now: the infrastructure gaps that used to hold rural businesses back are being solved, the software has largely caught up, and this is a key moment for that remaining majority to make the move.
Wagepoint walked away from the US in 2023 to double down on Canada. At a time when a lot of Canadian tech companies are chasing US expansion to survive, how do you make the case to your investors that Canada alone is a big enough prize?
Ben Richmond: Canada has far more headroom than you might think. Take just that one-to-twenty employee segment and you have over a million businesses, the large majority of which still haven’t moved to modern payroll. We can build a genuinely large, sustainable company by winning that market properly, and our investors see the same opportunity we do.
Plenty of Canadian companies rush into the US far too early. Especially in something as complex as payroll where every state runs on its own rules; they end up stretched thin instead of strong anywhere.
Being all-in on Canada is also our single biggest advantage, because so much of the software here was built for another market and bent to fit afterward, and you never get a great Canadian product that way. We are the best at Canadian payroll precisely because it is what we do.
CRA compliance is notoriously complex and changes constantly. How does Wagepoint stay ahead of that and what happens to a small business owner when payroll software gets it wrong?
Ben Richmond: Wagepoint was built in Canada for Canadian rules, and we have a dedicated compliance team, many of whom have been doing this for well over a decade. We stay close to the regulators rather than reacting after the fact, so when something shifts, our job is to absorb that complexity and make the change invisible to the business owner. They should never have to become a payroll expert just to stay onside with the CRA.
We are also putting AI to work on accuracy itself. One capability we’re testing with a small group of customers right now and rolling out more broadly later this year, scans payroll data before payments go out and flags the kinds of things that quietly cause trouble, such as an overtime miscalculation, a missing deduction, or a compliance issue triggered when an employee changes province.
That matters because the consequences of getting payroll wrong land hard on a small business, whether that is a penalty, a reassessment, or a stressful letter from the CRA. Handing the whole process to a Canadian-owned provider that owns it end to end, rather than stitching together white-labelled pieces from several vendors, is what gives an owner real accountability if a question ever comes up.
Bookkeepers and accountants are clearly Wagepoint‘s secret distribution weapon in Canada. Is that a uniquely Canadian dynamic – and why hasn’t a US player been able to crack that relationship the way you have?
Ben Richmond: Bookkeepers and accountants are the most trusted advisors Canadian small businesses have, so they are central to how we grow, but I wouldn’t say that this is a relationship a US player hasn’t unlocked yet. Canada’s compliance environment, from payroll through GST, pulls accountants into a deeper, year-round relationship with their clients, whereas that same work is far more seasonal and transactional in the US. The channel dynamic we rely on here doesn’t really exist there in the same form.
That said, we also built Wagepoint around how these professionals actually work, and we invest in the community directly through things like Canada’s Payroll Collective, where bookkeepers and accountants share what they’re learning.
Payroll has moved from a back-office chore into a strategic lever for their clients, and the firms leaning into that shift are growing from data processing into genuine advisory work. Automating the routine parts of payroll, increasingly with AI, is what frees them to do it. We are pushing in exactly the direction the best firms already want to go, which is why they choose us and stay.
With trade tensions and economic uncertainty as a backdrop for many small businesses right now, what are you actually seeing in your customer base? Are there any unique signals you see that Canadian small businesses are thriving, struggling, or weathering the storm?
Ben Richmond: The honest answer is that two things are true at once. On the surface, the mood is rough. Trade tensions and the general uncertainty have made a lot of owners cautious, and you can see it in how carefully people are spending and hiring. We’re also seeing a small uptick year over year in companies ceasing operations. But there’s a second force working in the other direction. There’s a real support-local, buy-Canadian energy right now. For a Canadian-owned small business, that’s a tailwind that didn’t exist a few years ago. The ones that survive are stronger than they were.
That tension is why the payroll data tells a story. Every pay run is a small, current signal about whether a business is keeping its people and whether it’s adding any. And it’s steadier than the headlines. In our own payroll data, the share of workers leaving their jobs in a given year has fallen from roughly two in five in 2019 to about one in four in 2025. Teams are holding on to their people.
So yes, the most fragile businesses are under real pressure, and some won’t make it. But the businesses that have made it this far are steadier than they were a few years ago. What’s left is a grind, not a crash. Payroll is the last thing a healthy business lets slip, so steady pay runs and stable teams are the clearest real-time signal we have, and right now it says most businesses are holding their ground.
