Hiring in Canada: Complete Guide 2027
Everything you need to know about hiring and managing employees in Canada
Overview
Canada is the natural first international hire for US companies: same time zones, common law, English contracts and deep tech talent in Toronto, Vancouver and Montreal. Employment law is provincial, so the rules change when the hire sits in Quebec rather than Ontario, and termination exposure is the cost buyers underestimate. Employer on-costs stay moderate at 8–12% of gross outside Quebec (CPP, EI, provincial health tax, workers' compensation) and reach 12–14% in Quebec. An EOR carries the CRA payroll account, the provincial registrations and the contract wording that caps notice.
Currency
Primary Language
Payroll Tax
Pay Frequency
Overview
Employer Costs
Employer Social Contributions
Mandatory Benefits
EOR Service Fee
Total Additional Cost
Employee Deductions
Income Tax
Employee Social Contributions
Mandatory Employee Benefits
PAYROLL & SETUP
Setting Up Payroll in Canada
Canadian payroll runs bi-weekly or semi-monthly and needs a CRA business number with a payroll (RP) account, plus workers' compensation registration per province (WSIB in Ontario, CNESST in Quebec). Employer contributions in 2026: CPP at 5.95% of pensionable earnings between the CAD 3,500 exemption and the YMPE of CAD 74,600, plus CPP2 at 4% up to CAD 85,000; EI at 1.4 times the 1.63% employee rate, 2.28%, on earnings up to CAD 68,900. Ontario adds the Employer Health Tax at 1.95% once payroll passes the CAD 1M exemption; workers' compensation premiums run 0.2–3% by industry. Quebec replaces CPP with QPP (6.4% employer), runs a lower EI rate and adds QPIP (0.692%) and the Health Services Fund (1.25–4.26%). Minimum wage is provincial: CAD 17.60 in Ontario, 16.10 in Quebec, 17.75 in federal sectors. An EOR remits deductions to the CRA and Revenu Québec, files T4s in February, issues Records of Employment and runs the health plan.
Key Labor Laws &
Requirements
Employment Contracts
- Written contract with an enforceable termination clause
- Rules set by the province (ESA in Ontario, Labour Standards in Quebec)
- Probation typically 3 months
Leave & Time Off
- 2 weeks paid vacation, 3 after 5 years in Ontario and federally
- 9–10 public holidays by province
- EI-funded maternity and parental leave up to 18 months
Termination Rules
- Statutory notice 1–8 weeks by tenure
- Ontario severance after 5 years at CAD 2.5M payroll
- Common-law notice up to 24 months unless capped
COMPLIANCE
Termination Notice and Provincial Standards in Canada
Canada has no at-will employment. Each province sets statutory minimums: in Ontario, one to eight weeks of notice by tenure after a three-month probation, plus severance pay of one week per year of service (capped at 26) after five years when the employer's payroll exceeds CAD 2.5M. The real exposure sits above that floor. Unless the contract caps entitlements with wording the courts accept, the employee is owed common-law reasonable notice, up to 24 months for long-serving senior staff, and Ontario courts have voided termination clauses over a single defective sentence. Quebec adds its own standards and French as the working language under Bill 96. An EOR drafts province-specific contracts and keeps the termination clause enforceable.
Key Challenges
- Employment standards differ in every province and territory
- Quebec runs its own QPP, QPIP and French-language rules (Bill 96)
- Common-law reasonable notice can reach 24 months on termination
- Employer-paid health and dental plans expected by candidates
- CRA payroll account and workers' compensation registration per province
Country Highlights
Advantages
- Highly educated workforce, bilingual in English and French
- Same time zones as the US and a close cultural fit
- Moderate employer on-costs (8–12% outside Quebec)
- Deep tech talent in Toronto, Vancouver, Montreal and Waterloo
- Stable common-law system and strong IP protection
Popular Industries & Roles
Technology
Avg. Salary: C$85k-C$140k
Toronto, Vancouver, Montreal and Waterloo hold deep software, AI and fintech engineering talent at a discount to US coastal rates
Financial Services
Avg. Salary: C$80k-C$150k
Toronto's Bay Street is the second-largest financial centre in North America, with banking, insurance and asset management depth
Energy & Natural Resources
Avg. Salary: C$90k-C$160k
Calgary and Edmonton anchor energy, mining and clean-tech engineering roles that pay among the highest salaries in the country
Top 3 Providers in Canada
Based on our analysis of pricing, compliance record, service quality, and customer reviews
Deel
- EOR in 130+ countries; owned entities in 120+
- Contractor and EOR in one platform
- 300+ integrations including Slack, Workday
- AI-powered compliance automation
Borderless AI
- Highest-rated EOR on G2 at 4.9/5
- AI-native: Alberni + HRGPT free
- 100% owned entities across 170+ countries
- Zero salary deposits, 5-day payroll
Thirdsail
- Canada-exclusive EOR + entity formation
- Toronto-based; $350 USD/month
- Volume discounts at 5+ employees
- Canada-specialist boutique
Frequently asked questions
Hiring in Canada through an EOR, in short.
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How much does an employer pay on top of salary in Canada?
Employer contributions in Canada come to ≈8–12%; the largest mandatory line is CPP 5.95%. With the other statutory benefits and a typical EOR fee, budget ~20–25% on top of gross salary.
What does an EOR charge per employee in Canada?
Published EOR fees in Canada run $400–700/mo per employee per month, with any setup fee negotiated separately. The fee is flat, so it weighs less as the salary rises.
What does an employee in Canada pay in tax and contributions?
Income tax is 14–33% federal + provincial and employee social contributions are ≈7.6% (5.95% CPP), both withheld by the employer on every pay run.
How long does it take to hire through an EOR in Canada?
1-3 Days once the employee's documents are in. The contract is issued by the EOR's local entity and payroll runs on the local cycle (Bi-weekly).
Which EOR providers rank best in Canada?
Deel, Borderless AI and Thirdsail hold the first three places in our ranking for hiring in Canada. The full top 10, with the questions to put to each provider before signing, is here: Top 10 EOR providers in Canada.
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