Not only does Canada produce 71% of the world’s maple syrup, but it also boasts a highly educated workforce. 64% of Canadian adults between the ages of 25 and 34 have a higher education degree, ranking Canada as the most educated country in the world and making it an attractive country for hiring top talent.
With an educated workforce and a large bilingual population—thanks to 20% of the population speaking both English and French—it’s no wonder businesses are sweet on expanding to the Great White North.
The shift to remote has only amplified these opportunities, making now as good a time as ever to think about hiring in Canada. But don’t overlook these important hiring factors.
Hiring remote employees or independent contractors in Canada
While in-office employees could be a possibility if your business already has an entity and office established in Canada, it’s also important to realize that without both of those, you can still tap into top remote talent in Canada. However, the laws and norms your multinational business should abide by will vary based on if you hire a full-time employee or an independent contractor.
While each province and territory within Canada has its own rules and standards when it comes to working hours, the standard working hours for most employees are eight hours per day and 40 hours per week. A maximum of 48 hours may be worked in any week, and employees must have one rest day a week.
Full-time employees generally are entitled to two weeks of paid vacation after a year of employment and then it rises by one extra week every five years. Employment contracts may also provide for additional vacation. When it comes to hiring independent contractors in Canada, the company will have more flexibility to determine any time off as there's no mandated vacation laws that apply to independent contractors.
Pregnant employees are entitled to 17 weeks of maternity leave, and either parent may take up to 63 weeks of parental leave. Employers are not required to pay wages during pregnancy leave because Canada’s Employment Insurance provides eligible employees with maternity and/or parental benefits.
Employees are also entitled to a pension. The Canada Pension Plan is a savings plan for all Canadians that are employed. As of January 1, 2021, employees and their employers must each contribute at least 5.70% of their earnings to the pension plan, though the percentage may vary by province. However, come January 1, 2023, this rate will increase to 5.95%.
Employers are also required to provide employment insurance (EI) and have to contribute 1.4% the employee’s wages. Employees may tap into their EI for things like sickness, maternity or parental leave, and/or compassionate care leave.
However, for independent contractors, employers are not required to deduct government statutory payroll taxes and income taxes like the pension plan or employment insurance.
Beyond what’s legally required, employers can provide employees with any additional benefits to make their company more attractive and stand out against the competition. These include additional retirement options for employees and supplemental health care benefits. In fact, 91% of Canadian employers provide employees with extended health care benefits to supplement governmental health insurance.
Further considerations for hiring employees and contractors in Canada
It’s important for a multinational business to claim the right territory or province for remote employees when it comes to deductions for income tax and payroll.
So, because a remote worker is not required to report to an employer’s office, their province or territory of employment will be the location of the employer’s payroll department or payroll records.
But if an employee works in the office, even on a hybrid schedule, the business would be required to list the office address and province as their place of employment. Say you have an employee that works three days a week at their home in Ontario and the other two days a week at the company’s office in Manitoba, then the Manitoba address should be used for payroll and tax purposes.
Having the correct province filled out for tax filing purposes is extremely important and can save your business hefty noncompliance fees.
A global employer record of solution for hiring in Canada
When hiring in Canada, a global employer of record can enable you to tap into Canada’s top talent and ensure compliance with Canada’s employment laws.
Whether you’re just beginning to explore growing your workforce in Canada, or you already have in-country contractors and are looking to expand their roles compliantly, our employer of record solution in Canada can help you navigate Canadian employment laws and cultural considerations.
Contact us today to schedule a free consultation with one of our global solutions experts.