Hire in Canada

EOR in Canada

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in Canada, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, 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.

Learn about the hiring, employment, payroll and benefits requirements for workers in Canada and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs.

Hiring in Canada

Top companies from around the world have seen the benefits of hiring in Canada, but Canada's labor laws can be complex. Employment relationships in Canada are governed by federal and provincial legislation, judicial precedents, and both collective and individual contracts. Numerous statutes and regulations established by the Government of Canada and provincial authorities work together to protect employee rights and outline employer obligations.

Additionally, Canadian law regulates — and in certain cases, sets specific requirements for — the use of temporary or contract workers. Many provinces have enacted legislation to ensure that contract and temporary workers receive statutory benefits and protections. Employers and staffing agencies must comply with these regulations, which may require registration or licensing depending on the province.

Because of the complexity of employment laws in Canada, compliant employment contracts are an essential business need. With Safeguard Global as your trusted partner, you can employ workers in Canada with confidence, knowing that every contract meets all legal requirements. We also provide guidance on local cultural norms and hiring best practices, ensuring you stay up to date with evolving employment regulations.

Employment contracts in Canada

In Canada, employment contracts can be either fixed-term or permanent, depending on the nature of the job and the agreement between the employer and the employee. Permanent contracts must include benefits such as pension contributions, health insurance, paid leave, and access to employment insurance. Fixed-term employees are likewise entitled to statutory benefits and protections as dictated by provincial or federal law. Canada also supports apprenticeship contracts governed by relevant provincial or federal legislation. Employers must provide structured training in line with approved curricula, pay apprentices a regulated stipend, ensure a safe working environment, and maintain regular working hours.

Probationary period

In Canada, probation periods are governed by provincial employment standards and typically range from three to six months, depending on the jurisdiction and the nature of the role. For example, Ontario permits up to three months without severance, while other provinces allow longer periods if stipulated in the employment contract. Probation terms must be clearly stated in writing. During the probation period, either party may end the employment with minimal notice, and employees are entitled to statutory protections such as workplace safety and nondiscrimination.

Termination and severance

Canadian labor law outlines clear rules regarding termination, notice periods, and severance rights. Employers must give written notice before terminating an employee, or provide pay in lieu of notice. The statutory minimum notice period is based on length of service:

• Less than three months: No notice required
• Three months to one year: One week’s notice
• One to three years: Two weeks
• More than three years: One additional week per year of service, up to eight weeks

Valid reasons for dismissal include:

• Misconduct or violation of workplace policy
• Redundancy or business closure
• Ongoing performance issues
• Frustration of contract due to long-term illness

Employees may also be entitled to severance pay depending on tenure and provincial regulations. Federally regulated employees follow Canada Labour Code requirements.

As your EOR in Canada, we help manage termination processes and ensure compliance with Canadian employment law.

Working hours

The standard workweek in Canada typically comprises 40 hours (eight hours/day, five days), although specifics can vary by province. Overtime is permitted and is generally compensated at one and a half times the regular rate for hours worked beyond the standard threshold. Some provinces may impose daily limits on work hours, and employers must ensure that adequate rest periods are provided between shifts. Excess hours may also be authorized by a permit issued by the federal Ministry of Labour.

Pay and benefits

When negotiating terms of an employment contract with a candidate in Canada, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company's benefits strategy.​

Minimum wages and salary benchmarks

• Minimum wage rates in Canada vary by province and territory. For example, as of the latest standards, Ontario’s minimum wage is approximately $16 CAD per hour. Other provinces set rates that are reflective of their local economic conditions.
• Federally regulated industries may have specific wage benchmarks that differ slightly from provincial standards. These benchmarks are set to ensure fair compensation across sectors such as transportation, telecommunications, and banking.
• The overall annual average salary in Canada is approximately $60,000 CAD per year, with monthly earnings varying significantly by position, experience, and region. The median monthly salary is estimated to be around $3,800 CAD.
• By gender, a wage gap exists with average annual salaries for men typically exceeding those for women. Efforts to reduce this disparity continue through targeted government initiatives and policy reforms.

Looking at salary by location in Canada:

• Toronto is known for offering salaries above the national average, particularly in sectors such as finance, technology, and healthcare.
• Vancouver offers competitive compensation in industries like film, technology, and trade, with wages generally reflecting the high cost of living.
• Montreal generally offers salaries that are competitive, but certain sectors may offer compensation slightly below the national average, influenced by regional economic factors.

As your employment partner in Canada, Safeguard Global can provide you with the latest resources and insights on average employee compensation across various roles and regions, ensuring that you make competitive and compliant employment offers.

Payroll frequency

In Canada, salary payments are most commonly processed on a bi-weekly or monthly basis, especially for salaried employees in professional and corporate sectors.

• Salaried employees typically receive their wages through direct deposit, with payment dates determined by company policy and provincial employment standards.
• Hourly or daily wage workers, such as those in retail, manufacturing, or construction, are often paid weekly or bi-weekly to match the nature of their work schedules.
• In addition to regular wages, annual bonuses, performance incentives, and periodic salary increments are frequently provided, aligning with contractual agreements and company performance metrics.

Bonuses and additional payments

In Canada, bonus structures are generally negotiated as part of the employment contract.

• While there is no federal mandate for a minimum bonus, many employers offer performance-based incentives to reward excellence and productivity.
• Vacation pay is statutorily required and is typically calculated at a minimum of 4% to 6% of an employee's gross earnings, ensuring that workers receive fair compensation for their time off.

Employee benefits and paid leave in Canada

When negotiating terms of an employment contract with a candidate in Canada, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Employee benefits

Canadian employers are mandated to offer certain statutory benefits while often providing additional perks to attract and retain talent.

• Canada Pension Plan (CPP): Employers and employees both contribute to the CPP, which supports retirement savings and benefits.
• Employment insurance (EI): Contributions to EI provide temporary financial assistance in cases of unemployment, illness, or maternity/parental leave.
• Health benefits: Although public healthcare is universally available to Canadian residents, many employers offer extended health, dental, and vision plans as supplemental benefits.
• Retirement savings and other benefits: Companies may also offer group retirement savings plans, life insurance, and other employee-focused benefits to enhance overall compensation packages.

As your employer of record in Canada, we can help you build a compliant and competitive benefits package while managing the required contributions and entitlements on your behalf

Tax and social contributions

Income tax and employee deductions

In Canada, withholding tax is known as Pay As You Earn (PAYE) and is deducted by employers before paying salaries to employees. Employers must deduct PAYE from employee salaries based on applicable federal and provincial income tax rates and submit it to the Canada Revenue Agency (CRA). ​

Employer payroll contributions

Canada's social security system requires employer contributions that are dependent on the total number of employees, and these contributions cover pensions, medical care, disability insurance, and gratuity payments. In addition, workers' compensation is financed by contributions from state governments, employers, and employees. ​

Business tax and compliance

Employers in Canada must adhere to various taxation and regulatory compliance requirements to operate legally and avoid penalties.​

• Corporate tax: The federal corporate tax rate is 15%. Combined with provincial rates, the total ranges from approximately 25% to 31%, depending on the province or territory. ​
• Goods and Services Tax (GST): GST applies to businesses with annual taxable supplies exceeding $30,000 CAD. Employers must register, file monthly or quarterly returns, and pay GST on applicable goods and services. ​
• Payroll deductions: Employers must deduct income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums from employee salaries. Remittances are due by the 15th or 25th of the following month, depending on the employer's remitter type.​
• Income Tax Returns (ITR): ITRs are filed annually based on company profits. Corporations must also file annual financial statements with the Canada Revenue Agency (CRA). "

Work visas and immigration

Programs for foreign workers

In Canada, employing foreign workers without a valid work permit can result in significant penalties including fines, legal action, and removal from the country. Canadian immigration policies are designed to ensure that jobs are primarily available to Canadian citizens and permanent residents, except when a clear need for specialized skills exists. Canada offers several pathways for hiring foreign workers.

• Temporary Foreign Worker Program (TFWP): Employers must obtain a positive Labour Market Impact Assessment (LMIA) from Employment and Social Development Canada (ESDC) to demonstrate that hiring a foreign worker will not negatively impact the local labor market.
• International Mobility Program (IMP): This program permits employers to hire foreign talent without an LMIA when the position offers broader benefits to Canada — often under trade agreements like CUSMA/TMEC.
• Global Talent Stream: Designed for highly skilled professionals in sectors like IT, finance, engineering, and healthcare, this stream expedites work permit processing for positions critical to the Canadian economy.
• Open Work Permits: Certain categories of applicants, including spouses of highly skilled workers or participants in specific exchange programs, may be eligible for permits that do not tie them to a specific employer.

Sponsorship and employer responsibilities

Hiring a foreign national in Canada requires compliance with immigration, labor, and tax regulations. The sponsoring employer (or EOR) must adhere to rules that cover eligibility and documentation.​

Eligibility criteria

• Confirm that the foreign applicant has the required qualifications and that no suitable Canadian citizen or permanent resident is available
• Obtain a positive Labour Market Impact Assessment (LMIA), if applicable, through Employment and Social Development Canada​
• Submit a signed job offer, company registration documents, and the applicant’s credentials to Immigration, Refugees and Citizenship Canada (IRCC)​

Required documentation

• Valid passport with at least six months' validity​
• Employment contract specifying job duties, salary, and duration​
• Company registration and letter of intent​
• Certified copies of educational and professional qualifications​
• Work permit application (e.g., Temporary Foreign Worker Program or International Mobility Program, depending on the employment type)​
• Completed visa application form and biometric photos​

Post-Arrival Requirements

• Social Insurance Number (SIN): After entering Canada, the foreign worker must apply for a SIN for tax and social security purposes​
• Health Insurance: Ensure enrollment in provincial or territorial health insurance plans, or provide private health insurance until eligibility is met​
• Update local authorities in case of change of address, employment status, or permit renewal​

Processing times and costs

Once a person has applied for a Canadian employment visa, the processing time varies, but it typically ranges from five to 36 weeks, depending on the type of work permit and the applicant's country of residence.

The fees for an employment visa vary based on the type of visa. For example:​

-Work permit: $155 CAD​

-Open work permit: $255 CAD​

Additional fees, such as biometrics ($85 CAD) and medical examinations, may apply. Check with the specific Canadian consulate or embassy for the most accurate and up-to-date fee structure. ​

Leave and public holidays

Annual leave and paid time off

Employees in Canada are entitled to paid vacation leave after completing one year of service. The statutory entitlement is two weeks per year for employees with less than five years of service, increasing to three weeks after five years, and four weeks after 10 years. This leave is fully paid and can be taken throughout the leave year, as agreed between employer and employee. ​

Additional leave may be offered as part of an employment contract, though it is not required by law. Many employers offer enhanced leave policies to stay competitive and improve retention.​

Unused statutory leave must be taken within 10 to 12 months after it is earned, depending on the province. Payment in lieu of unused leave is only permitted upon termination of employment. ​

Public holidays

In Canada, federally regulated employees are entitled to ten paid public holidays:

• New Year's Day
• Good Friday
• Victoria Day
• Canada Day
• Labour Day
• National Day for Truth and Reconciliation
• Thanksgiving Day
• Remembrance Day
• Christmas Day
• Boxing Day

Many provinces have additional public holidays. Employees required to work on a public holiday are typically entitled to premium pay or a substitute day off, as specified by local legislation.

Sick leave

Personal and sick leave are governed by the Canada Labour Code. Federally regulated employees are entitled to up to 10 days of paid sick leave per year, accruing at a rate of one day per month after 30 days of continuous employment. Employers may offer more generous sick leave policies through employment contracts or collective agreements.

Parental leave

Employers must provide up to 63 weeks of unpaid parental leave to eligible employees following the birth or adoption of a child, with the option to share up to 71 weeks if both parents are employed by federally regulated employers. Employees who have completed at least six consecutive months of continuous employment are eligible for benefits, with written notice submitted at least four weeks before the intended start date of the leave.​

Hiring and talent management

Commonly recruited roles

Canada is renowned for its diverse and highly skilled talent pool. Global companies operating within Canada frequently recruit for positions across several dynamic sectors, including technology, finance, healthcare, and engineering. A list of common roles appears below.

• Software developers and engineers: Specialists proficient in various programming languages and platforms
• Data scientists and analysts: Experts in interpreting complex data sets to drive business strategies
• Cybersecurity specialists: Professionals dedicated to safeguarding digital infrastructure
• Cloud computing experts: Individuals skilled in managing and optimizing cloud services
• Digital marketing and social media managers: Responsible for enhancing online presence and brand engagement
• Customer support representatives: Providing high-quality client service across various channels
• Human resources managers and recruitment consultants: Overseeing talent acquisition and employee relations
• Financial analysts and accountants: Managing financial planning, analysis, and compliance
• Product development specialists and research scientists: Innovating and iterating on products and technologies

Languages

Canada is a bilingual workplace environment, with English and French used across industries. While English dominates corporate settings, French is widely spoken in government and business sectors, particularly in Quebec and New Brunswick. Workplaces often operate in a bilingual manner, depending on the industry and region.​

In corporate sectors like IT and finance, English is the primary language for communication, documentation, and client interactions, especially in multinational companies (MNCs). Meetings, presentations, and official emails are generally conducted in English, though employees may use French informally.​

In government offices and public sector organizations, English and French are commonly used for internal communication and documentation. Canada recognizes both English and French as official languages, with provinces prioritizing their regional languages — such as French in Quebec and New Brunswick.​

The manufacturing and retail sectors rely on local languages for daily operations, especially in labor-intensive industries. Factories, warehouses, and construction sites primarily use English or French, while management-level communication may be in English.​

In customer service, language use depends on clientele. English and French are common for domestic and international customer support, while many companies also hire speakers of indigenous languages to cater to regional customers.

Education level

Canada boasts a dynamic and evolving workforce, supported by a comprehensive academic and vocational education system.

Many professionals also hold industry-recognized certifications or postgraduate qualifications. Key academic backgrounds include:

• Engineering and technology
• Business and economics
• Information and communication technologies
• Health sciences
• Social sciences and humanities​

Vocational education and training play a crucial role in preparing individuals for technical and skilled professions. Institutions such as the British Columbia Institute of Technology (BCIT), NorQuest College, and Vancouver Community College offer programs across various professions and combine classroom instruction with practical workplace training. These institutions provide education at multiple levels, including technical and technological programs.​

Graduates from Canada's esteemed universities and vocational institutions are widely available across sectors, offering a diverse and skilled talent pool for employers.

Recruitment trends and hiring considerations

The Canadian job market in 2025 reflects strong demand in digital transformation, healthcare, renewable energy, and skilled trades. Technology, finance, and business services remain core drivers of hiring, while hybrid and remote work models continue to shape recruitment strategies.​

Labor shortages in IT, nursing, and construction are influencing training initiatives and government-backed employment programs. Employers increasingly seek candidates with digital competencies, multilingual abilities, and role-specific certifications.​

Cultural considerations include a preference for formal job applications, structured onboarding processes, and clear contractual agreements. As your local partner, we can help you navigate Canadian hiring practices, salary expectations, and legal requirements — ensuring a compliant and efficient recruitment process in Canada.

Workplace culture and business practices

Workplace norms and professional etiquette

Canadian workplaces are generally characterized by a culture of inclusivity, respect, and collaboration. While many organizations maintain a degree of hierarchy, decision-making tends to be more consultative compared to traditional top-down structures. Professional communication is typically courteous, with a balance between formality and approachability.

Hierarchy and authority: Although senior management provides strategic direction, teams are encouraged to share insights and work collaboratively.

Email and phone etiquette: Business emails and phone calls are expected to be polite and concise, often starting with a friendly greeting and ending with a professional sign-off.

Meeting etiquette: Punctuality is valued, and meetings usually begin with brief small talk before transitioning into formal discussions. Handshakes are common, although in bilingual settings, both English and French greetings are acceptable.

Professional dress code: In corporate environments, business attire or smart casual is typical, while tech startups and creative industries may adopt a more relaxed dress code.

Typical working hours and business customs

Canada’s standard workweek generally consists of 40 hours, although this can vary by province and industry. In recent years, remote and hybrid work models have gained popularity, with many organizations offering flexible working arrangements to maintain work-life balance and boost productivity.

Key HR challenges and compliance risks

Complying with Canada’s employment laws involves adhering to both federal and provincial regulations. Employers must ensure compliance with diverse standards covering minimum wage, overtime, workplace safety, and anti-discrimination laws. Failure to comply with these regulations can lead to legal disputes, financial penalties, and reputational risks. HR teams must remain vigilant about changes in labor legislation, tax laws, and benefit entitlements to mitigate risks effectively.

Professional employer organization (PEO) vs. employer of record (EOR) in Canada

What is a PEO in Canada?

A professional employer organization (PEO) in Canada is a third-party service provider that manages human resources, payroll, compliance, and employee benefits on behalf of a client company. This arrangement allows businesses to outsource many of the administrative tasks associated with employment while still sharing certain legal responsibilities with the client.

Challenges with a PEO model

In Canada, while a PEO can streamline HR functions, it often means that the client company still retains some legal liabilities. This model typically requires the foreign employer to set up a local legal entity, handle tax-related filings, and manage aspects of employee benefits. In contrast, an employer of record (EOR) serves as the legal employer, enabling foreign companies to hire employees in Canada without the need to establish a local entity. This approach mitigates the administrative burden and legal risks, as the EOR handles all payroll, taxation, labor law compliance, and statutory benefit requirements on a company's behalf.

EOR as an alternative to PEO

If you are looking to expand into Canada rapidly while minimizing the complexities of local compliance and administrative overhead, an employer of record (EOR) may be the optimal solution. Often referred to as an international PEO, an EOR allows you to quickly onboard employees — often within as little as two weeks — without the need to establish a legal entity. This model provides a streamlined pathway to market entry, reduces legal risks, and alleviates the burden of managing payroll, taxes, and compliance in a new jurisdiction.

Entity setup in Canada

Setting up a local entity

While employers of record (EORs) provide a quick entry into Canada, establishing a legal entity is essential for companies planning large-scale operations, direct hiring, and full market control. The decision depends on growth plans, industry regulations, and cost considerations. Safeguard Global can help you assess your growth plan and objectives and find the solution that best meets your needs. We're the only provider that grows with you.

Entity registration steps and timelines

Establishing a legal entity in Canada requires several steps, each involving specific documentation and regulatory approvals. The process begins with selecting an appropriate business structure, such as a corporation, and reserving the company name through a Nuans name search. Applicants must provide identification documents, proof of address, and details of the shareholders and directors. ​

Next, companies must prepare key incorporation documents, including the articles of incorporation, which outline the company's objectives and internal governance structure. These documents are submitted to Corporations Canada for registration. ​

After registration, businesses must obtain a Business Number (BN) from the Canada Revenue Agency (CRA) and register for applicable taxes, such as Goods and Services Tax (GST)/Harmonized Sales Tax (HST). Depending on the nature of the business, companies may also need to register with provincial or territorial authorities and obtain additional licenses or permits. ​

The entire incorporation process in Canada typically takes between one to two weeks, depending on the completeness of documentation and the efficiency of the relevant authorities."

Comparing EOR vs. entity setup

When an EOR might better suit your needs

Quick hiring: Ideal for rapidly onboarding employees (within one to two weeks).

Simplified compliance: Avoids the complexities of setting up and managing a legal entity.

Market testing: Useful for testing the Canadian market before committing long term.

Flexibility: Best for companies planning to hire fewer than 50 employees or needing operational agility without significant upfront investment.

When an entity setup might be more suitable

Long-term operations: Offers full business control for companies planning long-term expansion.

Local contracts and assets: Enables signing contracts, opening bank accounts, and owning assets in Canada.

Scalability: More cost-effective when hiring 50+ employees as EOR costs may become unsustainable.

Regulated industries: Essential for sectors that require local business registration and strict compliance.

Intellectual property protection: Provides better legal protection under Canadian law."

Global workforce solutions

HR & Benefits solutions in Canada

Canadian employers can leverage Safeguard Global's local expertise for benefits administration, regulatory compliance, and employee engagement. Our customized HR solutions help manage local statutory benefits, including pension plans, extended health coverage, and paid leave entitlements.

Tax & Accounting solutions

Safeguard Global's specialized services support payroll tax filings, income tax compliance, and other regulatory requirements, ensuring seamless integration with Canadian tax laws and CRA regulations.

Global Payments & Payroll Processing

Specialized services support payroll tax filings, income tax compliance, and other regulatory requirements, ensuring seamless integration with Canadian tax laws and CRA regulations.

Updated: May 2025

Partner with Safeguard Global as your Canada employer of record and PEO

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution, to expand and hire in 187 countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in Canada. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

Disclaimer: The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.