Global HIRING & employment
Hire employees in Canada in 90 seconds
Normally, setting up a corporate entity abroad is a long, expensive process. But through Rippling EOR’s entities, you can start hiring and working with people abroad quickly and compliantly.
Currency
Canadian Dollar
Languages
French, English
Time Zones
GMT-8, GMT-7
and
6 additional
6 Time Zones
Pacific Time Zone
Mountain Time Zone
Central Time Zone
Eastern Time Zone
Atlantic Time Zone
Newfoundland
1. Hiring in Canada
Here’s what you need to know about hiring employees in Canada
Onboarding in Canada usually takes one day. Contracts must be in writing and signed by both parties. With Rippling EOR, you have access to a localized contract with the necessary information.
Common Employment Mistakes to Avoid
1. Terminating employment without appropriate notice or cause.
In Canada, there is no concept of at-will employment. You can only terminate employees for cause or without cause if you provide reasonable notice (pay in lieu of notice). Never forget a written contract! Contracts are preventative measures to help avoid disputes when an employee is terminated. Such a contract should define any entitlements that an employee may receive.
2. Not calculating vacation pay correctly
Vacation pay must be calculated on an employee’s gross wages, not their standard salary. Gross wages include things like overtime, commission, termination pay, and bonuses.
3. Not being aware of Canada's aggressive enforcement of health and safety standards.
Vacation pay must be calculated on an employee’s gross wages, not their standard salary. Gross wages include things like overtime, commission, termination pay, and bonuses.
4. Not being aware of Canada's aggressive enforcement of health and safety standards.
Businesses must take reasonable steps to ensure the safety of their workers and the public. If an employee is seriously injured or killed, employers can be subjected to a maximum fine of $1.5M CAD.
5. Not understanding the extent of Canadian anti-discrimination laws
Those protected under Canadian law may differ from those covered under other countries’ laws. For example, in British Columbia, it would be discriminatory to refuse to hire an employee because they have been convicted of a criminal offense or a perceived conviction unrelated to their employment or intended employment.
6. Not conducting thorough due diligence in mergers and acquisitions.
Due diligence should always be conducted before a company acquires shares or assets. In Canada, companies are at risk of significant liability in several areas, including:
- Pension benefits and other post-employment benefits
- Pay equity compliance
- Accrued vacation pay
- Noncompliance with overtime pay requirements
- Improper classification of workers as independent contractors
- Change-in-control liability
- Succession of bargaining and collective agreement rights from the vendor to the purchaser
2. Benefits
Mandatory benefits
- Public health insurance
- Employment insurance contribution (and Quebec Parental Insurance Plan (for QC employees)
- Workers compensation
- Registered retirement saving plan
- Canadian Pension Plan contributions (or Québec Pension Plan contributions)
3. Pay
Rippling EOR ensures you’re compliant with minimum wage requirements federally and in all Canadian provinces.
See Rippling
Minimum wage
The minimum wage in Canada differs by Province/Territory. For those working in provinces or territories where the minimum wage rate is higher, the higher rate will continue to apply.
Province-specific minimum wage
Province
Minimum wage
Alberta
$15.00/hr
British Columbia
$15.65/hr
Manitoba
$13.50/hr
New Brunswick
$13.75/hr
Newfoundland and Labrador
$13.70/hr
Nova Scotia
$13.60/hr
Ontario
$15.50/hr
Prince Edward Island
$14.50/hr
Quebec
$14.25/hr
Saskatchewan
$13.00/hr
Territory-specific minimum wage
Province
Minimum wage
Northwest Territories
$15.20/hr
Nunavut
$16.00/hr
Yukon Territory
$15.70/hr
Overtime
- Overtime pay is required in most instances.
- Standard working hours are 8 hours/day and 40 hours/week.
Working Week
Monday—Friday
Payroll Frequency
Commonly, employees are paid on a bi-weekly or semi-monthly, (the 15th and the last day of the month)
4. Terminations
Requirements
Canadian employees are typically entitled to written notice of the employer’s intention to terminate their employment or be provided with pay in lieu of notice. The length of the notice period is defined by each Province and Territory and depends on how long the employee worked for the employer.
5. Time Off
Rippling EOR automatically flags non-compliant sick leave policies and tells you how to fix them. If you'd like to give your employees more leave to match policies in other countries, you can do that too.
See Rippling
Maternity
Type
Maternity
Max Weeks
Up to 15 weeks
Rate
55%
Weekly Max
Up to 15 weeks
Parental
Type
Standard Parental
Max Weeks
Up to 40 weeks, but one parent cannot receive more than 35 weeks of standard benefits.
Rate
55%
Weekly Max
Up to $638
Type
Extended Parental
Max Weeks
Up to 69 weeks, but one parent cannot receive more than 61 weeks of extended benefits.
Rate
33%
Weekly Max
Up to $383
6. Employer Costs
Canada Employer Costs
Canada Pension Plan
5.95% (reduces to 4% after C$68,500 and 0% after C$73,200 wages)
Employment Insurance
2.324% (capped at C$63,200 wages)
Employment Health Tax
1.95%
Workers' Compensation
(estimated)
0.21% (capped at C$110,000 wages)
Total
10.432% or less
Canada (Quebec) Employer Costs
Quebec Pension Plan
6.4% (reduces to 4% after C$68,500 and 0% after C$73,200 wages)
Employment Insurance
1.848% (capped at C$63,200 wages)
Quebec Parental Insurance Plan
0.692% (capped at C$94,000 wages)
Employment Health Tax
4.26%
Workers' Compensation
(estimated)
0.41%
Total
13.61% or less
7. Employee Taxes
Employee income tax
Federal taxes are calculated according to progressive rates.
Gross Annual Income (CAD)
Tax Rate (%)
Up to $50,197
15%
Between $50,197 - $100,392
20.5%
Between $103,392 - $155,625
26%
Between $155,625 - $221,708
29%
Above $221,708
33%
Provincial income taxes are highly variable. You can find today’s tax rates, here.
8. Federal Holidays (2023)
Note: holidays vary by province.
01
Jan
New Year's Day
Sunday
07
Apr
Good Friday
Friday
10
Apr
Easter Monday
Monday
22
May
Victoria Day
Monday
01
Jul
Canada Day
Saturday
07
Aug
Civic Holiday
Monday
04
Aug
Labour Day
Monday
30
Sep
National Day for Truth and Reconciliation
Saturday
09
Oct
Thanksgiving
Monday
11
Nov
Remembrance Day
Saturday
25
Dec
Christmas Day
Monday
26
Dec
Boxing Day
Tuesday
9. Contractor Classification
How to ensure contractors are properly classified as such. (And avoid fees, taxes, and fines.)
There are specific legal “tests” to determine if a contractor should be deemed a full-time employee. When hiring and designating a contractor, it is important to consider:
- Level of control employer has over the worker
- Ownership of tools and equipment
- Chance of profit/risk of loss (i.e., a true contractor will incur expenses for services performed)
- Degree of economic dependence
- The exclusivity of service (i.e., whether the contractor can freely provide services to other organizations)
- Degree of integration
- Length of engagement (but ultimately it comes down to the nature of the working relationship in practice)
How to ensure contractors are properly classified as such. (And avoid fees, taxes, and fines.)
When entering into a business relationship with a contractor, it is recommended to have both an independent contractor agreement and a payment process that provides the business with an invoice for services and charges sales tax.
Equipment
Unlike employees, independent contractors are responsible for bringing their equipment and ensuring the work is completed on time. No reimbursements should be provided for the cost of equipment.
Compensation
Independent contractors are entitled to receive payments only when they have successfully performed services and have submitted invoices for that work.
Employee Benefits
Independent contractors do not receive benefits like paid leave, employee retirement benefits, social security contributions, overtime payments, etc.
Disciplinary Action
The company will not be able to take disciplinary action against the individual for any act of misconduct—they can only terminate the arrangement for breach of contract.
Exclusivity
Independent contractors should not be restricted from providing services to any other business.
Duration
Independent contractors cannot be engaged for long and continuous periods.
Rippling and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any related activities or transactions.