Canada is one of the United States' most important economic partners. Home to one of the best public education systems in the world, Canada is a booming talent hub across all industries, including tech, financial services, healthcare, and agriculture. Despite being a relatively small country by population, Canada's GDP is approaching $2 trillion. Companies looking to expand globally can hire top Canadian talent by partnering with an EOR service like Via.
Companies all over the world have started hiring remote workers and building hubs in Canada. If you’re planning to hire in Canada for the first time, however, you’re probably discovering how complicated it is to open an entity in the country and manage payroll & benefits for your Canadian workforce.
The good news is that an employer-of-record (EOR) provider like Via can help you onboard new employees in minutes and offer local on-the-ground support. By partnering with an EOR, you can hire and pay workers in Canada compliantly without opening an entity or establishing a Canadian HR team.
Keep reading to learn about the hiring, employment, payroll and benefits requirements for onboarding workers in Canada, as well as how an employer-of-record (EOR) in Canada can help you manage your international employment needs.
An employer of record (EOR), sometimes known as an international PEO, enables you to quickly hire and onboard workers in Canada, often in as little as two weeks, without having to take on the cost and risk of establishing a local entity.
Manage payroll, employment contracts, and statutory benefits
Navigate payroll taxes and other HR processes
Support full-time workers across the entire employee lifecycle, from onboarding to offboarding
Sponsor work visas & permits, including LMIA support
Save thousands of dollars and countless hours of valuable time
1.643 trillion USD
Minimum hourly salary
$16.65 CAD per hour
8 hour days (40 hour weeks)
Number of public work holidays
Penalties for misclassifying employees and contractors in Canada can range from making back payments of statutory benefits to severe fines and legal repercussions. Back payments for misclassification include an interest fee of either 10% or 20%, depending on the severity and number of cases.
Time to hire with an EOR in Canada
1-2 business days
An EOR can help you understand the cultural differences in the workforce and ensure that you’re adhering to employee expectations, both during the hiring process and ongoing employment.
For example, you’ll need to know that although English is the primary language in Canada, in the province of Quebec, French is also an official language.
Canadians value listening and polite social interaction in their everyday conversations. They are known to be softer than Americans in the way that they approach most situations.
Teamwork and harmoniously working with co-workers on projects and tasks is a key part of work culture in Canada. If you are late to a meeting, Canadians will wait no more than 15 minutes before starting that meeting. Not valuing your co-workers’ time and input on a project will not paint you in the best light.
Canada has six standard time zones, so if it’s 9am in NYC its:
10:30am in Newfoundland
9am in part of Ontario, including Toronto
8am in New Brunswick and Nova Scotia
8am in Saskatchewan
7am in Alberta and the Northern Territories
6am in British Columbia
The typical work week in Canada is 40 hours, with eight hours per day being standard.
A 30 minute break must be taken before the 5-hour mark for lunch.
In some provinces, such as Ontario, employees are entitled to overtime pay for any hours worked over 44 hours per week. Additionally, employees are entitled to a minimum of one day off per week, although this may not always be the case on the weekend.
To hire a new employee in Canada, employers will have standard typical overhead costs, which include:
Contributions to the Canadian Pension Plan (CPP)
Vacation and sick days
Onboarding and training
Per federal regulations, Canadian employers must pay for at least 10 holidays (non-working days) per year, including:
New Years (1/1/2023)
Good Friday (4/7/2023)
Victoria Day (5/22/2023)
Canada Day (7/1/2023)
Labour Day (9/4/2023)
National Day for Truth and Reconciliation (9/30/2023)
Remembrance Day (11/11/2023)
Christmas Day (12/25/2023)
Boxing Day (12/26/2023)
Right now, Canada ranks 21st in the overall world index for internet connection.
Over ⅓ of Canadian jobs can now be performed online and workers prefer being able to work from home. They report having higher productivity levels when they don’t have to go into an office everyday.
Canada has a diverse economy, and several industries thrive in the country, including:
When deciding to hire in Canada, you should consider each province and what cultural or regulatory distinctions stand out.
Some important differences between provinces:
Quebec: The official language in Quebec is French, so expect to see most contracts and official documentation translated into the language.
Ontario: The Employment Standards Act outlines and dictates all of the employment and labor laws in the province.
British Columbia: This west coast province offers extended benefits plans through the province's Medical Services Plan. British Columbia also has a thriving tech industry, making it one of the best places in the country to recruit developers and other tech-focused employees.
Right now, more than half a million people in Canada are considered contractors or self-employed. Many companies begin hiring contractors in Canada, but fail to learn about compliance and distinctions between contractors and full-time employees.
Some general distinctions between employees and contractors in Canada include:
Employees are on payroll while contractors are paid per project
Contractors file and deduct their own taxes
Employees are entitled to benefits while contractors are not
Contractors are not entitled to notice or severance
Contractors set their own hours and completion of projects while employees have a set schedule
If you partner with an EOR solution, you can hire full-time employees without worrying about misclassification. Many companies find an EOR after they have too many contractors in a new country, which makes it difficult to scale.
Canada Labour Code
Federal law that sets the minimum employment standards for employees who work in federally regulated industries
Human Rights Code
Each province in Canada has its own human rights code that prohibits discrimination during employment
Employment Standards Act
Sets the employment standards for non-federally regulated employees for vacation, hours, wage, and overtime
Occupational Health and Safety Act
Sets the requirements for workplace safety and ensures the employers provide a safe working environment
Start recruiting top Canadian talent using your in-house recruiter or by partnering with a recruiting agency based in Canada (Via can introduce you to one of our local recruiting partners)
Choose the EOR partner that fits your hiring needs (Via, for example, is the best EOR for hiring 20+ workers in Canada)
Complete LMIA and work visa application, if the employee is not a Canadian citizen
Begin onboarding full-time employees with local benefits such as private health insurance
Manage new worker onboarding, as well as ongoing payroll, benefits, compliance, and other local HR processes for your growing hub
Scale your hub to 20-100+ workers without an entity
Offboard workers with compliant severance packages
In Canada, employers must provide an employee with a written notice at least 2 weeks before the date they intend to terminate his/her employment. If employers do not offer a 2 weeks notice, they must pay 2-weeks worth of wages to the employees.
An EOR is responsible for compliant offboarding, creating the right severance package, and notifying employees of termination or layoffs.
When you decide you want to expand your business and hire employees in Canada, you have a few options: partner with a PEO, open your own subsidiary/entity, or partner with an EOR. Each option has its own pros and cons. Let's explore below!
The first option is to partner with a third-party PEO service provider in Canada.
Pros of a PEO
Cons of a PEO
Simple payroll and HR outsourcing
Need to set up an entity in Canada (which is time consuming)
Usually located in Canada
Must enter into a co-employment agreement, which makes you partially liable if any compliance problems arise
Useful knowledge about compliance in Canada
Not specifically tailored to your business needs in Canada
If you have the resources to open an entity and know you’ll be staying in Canada permanently, you can open your own subsidiary in the country. This can be a good option if you plan to sell goods in Canada.
Pros of opening a subsidiary
Cons of opening a subsidiary
Direct management of your entity in Canada
Registering a subsidiary in Canada starts at around $6500 USD after completing all of the necessary steps, but you also need to take into account legal, accounting, and other fees
Can hire a local HR team to help manage payroll and employee benefits in Canada
Entity setup normally takes at least 12 weeks in Canada but can last up to 1 year, depending on your business needs
Assimilate your business practices to Canadian culture by being directly immersed in the marketplace
Forced to deal with local bureaucratic agencies and will need your own in-country legal team
The last option is to partner with an EOR service provider like Via.
Pros of an EOR
Cons of an EOR
Save your business at least $6,500 USD and 12 weeks by avoiding entity incorporation in Canada
May not be the best option if you need to hire 500+ workers in Canada (you should open your own entity)
Avoid having to navigate the tricky LMIA process for hiring foreign workers through visa sponsorship
May have less control over how HR is managed
Help with benefit and payroll management, support during the onboarding and offboarding process
Learn more about EOR services.
Via makes hiring talent around the world and building your global team seamless by helping you onboard workers in as little as 2-3 business days. With our easy-to-use platform, Via helps you manage local HR processes for direct employment such as work visas & permits, employee data privacy compliance, benefits, global payroll, background checks, and more. Our team of local labor lawyers and on-the-ground experts provide 24-hour local support and ensure that your company remains compliant while expanding abroad. As your employer-of-record/entity abroad, Via assumes responsibility for employment liability, so that you can focus on what matters: recruiting and managing your team.