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North America

Canada

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Employer of Record (EOR) in Canada

What you'll learn

  • Country Introduction
  • Tax Breakdown for Employers
  • Statutory Leave Laws
  • Minimum Wage and Working Hours
  • Termination Process
  • Additional Information
Canada Introduction

Canada is the 2nd-largest country in the world in terms of land mass and is bordered by the United States. It has a highly developed mixed-market economy with a GDP of around $2 trillion USD. Canada is one of the world's largest trading nations, with an average household disposable income above the OECD average.

Paid Leave and Statutory Leave

Parental Leave

Canada guarantees maternity leave for their employees of at least 15 weeks (though some areas set a higher minimum). This leave is paid by the Canadian social programs that provide payments to new parents. New parents in Canada are also able to take at least 27 weeks of shared parental leave, no matter their gender.

Sick Leave

Employees in Canada who have worked at their companies for at least 90 days are able to take up to 16 weeks of unpaid sick leave without the risk of losing their job.

If the sickness is long-term, the employee may be eligible for benefits from Employment Insurance.

Paid Leave

Public holidays celebrated depends on the province, some are nationwide and some are province-specific. Employees are also entitled to 2 weeks of paid time off per year, receiving 4% of their earnings as vacation pay. After 5 years at the company this becomes 15 days with 6% as vacation pay, and after 10 years it becomes 20 days with 8% as vacation pay.

Some provinces also provide paid time off for bereavement, compassionate leave, jury duty, and military leave.

Wage Requirements and Working Hours

Canada’s minimum wages vary by province, and is currently set at around $13.70 CAD per hour with the goal of raising it to $15 CAD per hour by 2024 in all provinces (some already have). The standard workweek is 40 hours with a maximum of 8 hours of overtime paid at 150% of the regular rate.

Termination Process

Process

The laws in Canada encourage employers to first work with underperforming employees instead of going straight to termination. Canada does not practice at-will employment — if the termination is unavoidable, employees will retain a few protections if it’s not for just cause.

Notice Period

Employees are entitled to notice of termination (or payment in lieu of notice), of which the periods vary based on tenure, cause, and more. The minimum notice is usually 2 weeks, or 1 month in Ontario and Quebec.

Severance Pay

Severance is paid when the contract has a mutual separation agreement, or when an employee has worked a minimum of 1 year at the company. Generally employees receive either 2 days of wages per year worked, or 5 days of wages (whichever is greater) — this varies by province.

Additional Information

Although Canada has a public health system, a lot of companies offer supplemental health insurance to employees with a wider range of options and shorter wait times.

OVERVIEW
Language(s):
English & French
Currency:
Canadian Dollar (CAD)
Capital City:
Ottawa
Population:
38.4 Million
Cost of Living Rank:
17th
VAT (Valued Added Tax):
5%
Employer TaxES
9.86%
(estimated)

★  5.7% - Canada Pension Plan

★  2.21% - Employment Insurance

★  1.95% - Health Insurance

Simplified Global HR and Payroll.
Let’s work on it together.

We've made the process really simple
with only 3 steps.

1

Remote candidate

You've sourced a full-time employee or contractor located in a country where your company is not incorporated.

2

Cost Calculation

Pass us the details of your candidate and we will let you know exactly what it costs to employ your candidate in that country.

3

Onboarding & Admin

Sit back and relax as we onboard your new team member and take care of all the local compliances and admin work.

Same-day onboarding
Best Pricing
Available in 150+ countries
How Remofirst employs in Canada

It can be prohibitively expensive to establish an entity in every country you want to hire talent in, so Remofirst will hire and pay your employee on your behalf while you manage their daily duties. Remofirst will handle formal HR procedures and employment contracts that adhere to local laws, so that you can simply approve invoices via our platform. When you work with an Employer of Record (EOR) you can compliantly hire the best employees around the world.

How employees in Canada get paid
Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. Remofirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees in Canada are paid on time in Canadian Dollar (CAD). To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Full-time Employees vs Global Contractors

Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.

Dependable support for employees
Whenever the employee or employer has a question about benefits, Visas, or anything else related to international employment in Canada, they can use our platform's chat function to get answers from our team of experts. Every client of Remofirst also receives a dedicated account manager that will serve as a point of contact for global HR support.