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.

By clicking "See Rippling" you agree to Rippling's Privacy Notice

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.