At Borderless AI, our mission is to simplify global hiring and payroll, ensuring you can access top talent anywhere while we handle the complexities of local compliance. When you hire an employee in Quebec, you may notice a line item related to the Workforce Skills Development and Recognition Fund (WSDRF).
This is not a Borderless AI fee. It is a mandatory provincial payroll tax levied by Revenu Québec, and as the legal Employer of Record for your Quebec-based team members, we are legally required to manage and remit it.
Here’s a clear breakdown of why this is a necessary employer burden.
What is the WSDRF?
The WSDRF (or Fonds de développement et de reconnaissance des compétences de la main-d'œuvre in French) is a Quebec government mandate designed to compel companies to invest in the professional development of their workforce. The law requires any business with a total annual payroll in Quebec exceeding $2 million to invest at least 1% of that payroll into eligible employee training activities.
How Borderless AI Manages This for You
As the Employer of Record, Borderless AI is the legal entity employing your workers in Canada. This means our total payroll in Quebec, which includes the salaries of employees from all our customers in the province, is aggregated. As a result, our total payroll almost certainly exceeds the $2 million threshold, making us legally obligated to comply with the WSDRF for all the Quebec-based employees we manage.
The government’s rule is straightforward:
- Invest 1% in Training: The business must demonstrate that 1% of the total gross payroll for Quebec employees has been spent on eligible training activities.
- Pay the Difference: If the amount spent on training is less than the 1% threshold, the outstanding difference must be paid directly to Revenu Québec as a tax.
The calculation is simple:
Contribution Owed = (1% of Total Quebec Payroll) - (Eligible Training Expenditures)
Why This Cost is Passed to Our Customer
The EOR model is built on transparency. We handle all the statutory obligations of employment, and these government-mandated costs are a direct part of the total cost of employment in any given jurisdiction.
- Legal Obligation: The WSDRF contribution is a provincial tax. Just like employer contributions to the Quebec Pension Plan (QPP), Employment Insurance (EI), and the Health Services Fund (HSF), it is a non-negotiable part of the payroll burden. Borderless AI is legally required to pay this on behalf of your employees.
- Direct Employment Cost: Since the tax is calculated as a percentage of your employees' salaries, it is a cost directly attributable to their employment. Our role is to ensure this statutory payment is accurately calculated and remitted, keeping your business fully compliant.
- Lack of Training Investment: In many remote work arrangements, coordinating and tracking "eligible training expenditures" that meet Revenu Québec's specific criteria is often impractical for our customers, and unscalable as a EOR business practice. Without eligible training expenses and proper documentation to offset the 1% requirement, the full amount becomes due as a contribution to the fund. As such, we must collect and remit this tax to the government.
Our Commitment to You
By partnering with Borderless AI, you are ensuring that complex, province-specific requirements like the WSDRF are handled correctly without you needing to become a Quebec payroll expert. We manage the calculation, annual reporting, and remittance, protecting you from the risks of non-compliance, such as audits and penalties from Revenu Québec.
This line item on the Quebec payroll run is a direct reflection of our commitment to upholding the highest standards of legal and financial compliance for your global team.