--- title: "Canada" id: "13009" type: "employer-of-record" slug: "canada" published_at: "2025-08-06T13:30:52+00:00" modified_at: "2026-08-13T15:00:34+00:00" url: "https://topsourceworldwide.com/employer-of-record/canada/" markdown_url: "https://topsourceworldwide.com/employer-of-record/canada.md" taxonomy_continent: - "North America" --- # Employer of Record in Canada Employ in Canada without an entity — CPP/EI, provincial variations, work permits and payroll across federal and provincial rules handled. [Get Started](https://topsourceworldwide.com/contact-us/) ## Why hire in Canada through an EOR Canada’s employment costs are transparent but layered: CPP/EI are federal, minimum wages are provincial, tax brackets vary by jurisdiction, and some provinces add payroll taxes. Through an EOR, all of it is already running. ### No entity required Employ staff in Canada, and 180+ other countries, without registering a provincial or federal corporation. ### CPP and EI calculated right CPP is 5.95% to CAD $74,600, plus 4% (CPP2) from $74,600 to $85,000. EI is 1.63% to $68,900 (1.30% in Quebec). Employers match CPP and pay 1.4× the EI rate. We handle every threshold correctly. ### Provincial tax and minimum wage Minimum wage is CAD $18.15 federally but varies provincially. Tax brackets and rates differ by province and adjust annually. We calculate federal and provincial withholding accurately for every jurisdiction. ### Work permits for skilled migrants We sponsor and manage work permits for non-Canadian hires under the skilled immigration system, with pathways for specific industries and faster processing for selected roles. ### Working in days, not months We register the employment and set up payroll before day one — your hire can be working in Canada in days, while a company setup would still be weeks away. ## Hire in Canada without setting up an entity Canada is a high-wage, multi-jurisdictional hiring market where federal and provincial rules stack on top of each other. The federal government sets CPP and EI rates, but every province sets its own minimum wage, tax brackets and some add payroll taxes (British Columbia’s Employer Health Tax, which kicks in above CAD $1 million of payroll, is a surprise for newcomers). Work permits for skilled migrants move through federal immigration channels. Setting up a Canadian corporation takes weeks and creates tax and payroll obligations that accumulate. An Employer of Record removes the jurisdictional complexity: TopSource employs your Canadian hires across federal CPP/EI, provincial taxes and work permits, with payroll calculated correctly for whichever province they work in. Hire with confidence, not complexity. [Talk to our Canada team](https://topsourceworldwide.com/contact-us/) ## Calculate Your Employee Costs in Canada Enter a gross salary and the province of employment to see the full monthly cost of a hire in Canada — CPP, CPP2, EI and provincial withholding included in your total spend per employee. ##### Employment Cost Calculator *Indicative figures only and not definitive legal advice. Local regulations change frequently. [Consult an expert](/contact-us) ##### Canada Annually Monthly | | British Pound | Canada | | --- | --- | --- | | Base Salary (per month) | | | | Employer Contributions | | | | Total Cost (Annual) | | | | Total Cost (Monthly) | | | Employer of Record services in [Learn more](#) Payroll Outsourcing in [Learn more](#) ## How EOR in Canada works: the process through TopSource Step 1 ### Confirm the role, location and structure We agree the position, salary and benefits, confirm the province of employment (this determines tax and minimum wage), and outline work permit requirements for non-Canadian hires. Step 2 ### Issue an employment contract Your new hire receives a written employment contract meeting federal and provincial employment standards, with CPP/EI terms, provincial leave entitlements and tax deductions clearly set out. Step 3 ### Sponsor the work permit, if needed For non-Canadian hires we manage the skilled immigration application, working within federal immigration channels and building realistic processing times into the start date. Step 4 ### Register and run payroll We register for federal CPP/EI, provincial payroll requirements and any provincial taxes (like BC’s EHT), then calculate salary, federal and provincial withholding, CPP/EI and leave accrual every pay period. Step 5 ### Support the relationship day to day Your account manager and the employee both have a direct line for contract questions, leave balances (which vary by province), work permit status and anything else that comes up. ## Know your Canada hiring costs before you commit Tell us the role and the province where work will happen — we’ll send back the full Canadian employment cost, CPP/EI and provincial tax included, within one business day. [Get a Custom Employment Quote](https://topsourceworldwide.com/contact-us/) ## Employer Costs in Canada at a Glance ~8% Combined CPP and EI employer cost (varies by earnings level) CAD 18.15 Federal minimum wage (provincial rates are higher) 2 Weeks statutory vacation, plus public holidays (varies by province) ## Employer Costs in Canada Explained Canadian employers contribute to the federal Canada Pension Plan (CPP) at 5.95% on earnings from CAD $3,500 to $74,600 (Year’s Maximum Pensionable Earnings), plus 4% on earnings from $74,600 to $85,000 (CPP2). Employment Insurance (EI) is 1.63% of insurable earnings up to CAD $68,900, but employers pay 1.4 times the employee rate, roughly 2.28%. Some provinces add payroll taxes. The federal minimum wage is CAD $18.15, but every province sets its own higher floor. Here’s the breakdown. #### CPP and CPP2: the two-tier contribution system The Canada Pension Plan operates on two tiers: CPP (5.95%) applies on earnings from CAD $3,500 to $74,600, and CPP2 (4%) applies on earnings from $74,600 to $85,000. Employers match the employee contribution dollar-for-dollar. The maximum employer contribution in 2026 is approximately CAD $4,646.45 per employee per year, combining base CPP (CAD $4,230.45) and CPP2 (CAD $416.00). CPP contributions are mandatory for all employees aged 18–70 with limited exceptions. The employer contribution is a real cost that compounds across a workforce. #### EI: 1.63% employee, 2.28% employer (or 1.30% / 1.82% in Quebec) Employment Insurance premiums are 1.63% of insurable earnings up to CAD $68,900 for all of Canada except Quebec, which runs its own parental insurance plan (QPIP) and pays a reduced EI rate of 1.30%. Employers pay 1.4 times the employee rate, so roughly 2.28% federally (1.82% in Quebec). The maximum annual premium is approximately CAD $1,572 per employee federally, or CAD $1,253 in Quebec. EI covers layoffs, sickness, maternity and parental leave. #### Minimum wage and provincial variations The federal minimum wage is CAD $18.15 from 1 April 2026, but it applies only to federally regulated industries. Most workers are provincial-jurisdiction, and every province sets its own minimum wage which is typically higher — ranging from CAD $15.00 in Alberta to $19.75 in Nunavut. The province where the employee works (not where your company is based) determines which minimum wage applies. Annual minimum wage adjustments are indexed to inflation in most provinces, typically rising CAD $0.25–$0.50 per year. #### Provincial payroll taxes and work location rules Federal CPP and EI apply everywhere, but some provinces add payroll taxes: British Columbia’s Employer Health Tax applies only above CAD $1 million of payroll — a notch rate from $1 million to $1.5 million, then 1.95% above $1.5 million; other provinces such as Ontario and Quebec levy their own payroll taxes. The critical rule: it’s the province where the employee works, not where your head office is. An employee working remotely from Nova Scotia for your Ontario company is subject to Nova Scotia’s provincial tax, not Ontario’s. Multi-province payroll teams must track work location carefully. ## EOR or entity setup: which one fits your Canada plan? Registering a Canadian federal or provincial corporation is fast and inexpensive, but it creates payroll registration, provincial compliance and tax obligations that don’t disappear when plans change. An EOR makes sense while you’re testing the market or hiring a first small team; your own company usually makes sense once Canadian headcount and permanence are certain. ### Consider an EOR if you’re: 1. Hiring your first one to five people in Canada 2. Testing different Canadian provinces before committing to a company and payroll setup 3. Sponsoring skilled immigrants who need work permits 4. Working to a hiring deadline measured in weeks, not months [Get a cost comparison](https://topsourceworldwide.com/contact-us/) ## Why TopSource for Employing in Canada TopSource for Employer of Record, global payroll or any other of our services represent a simpler, more reliable and transparent option. We don’t hide fees or sneak price increases. We don’t lock you in for employees you don’t use. But we do give you a dedicated point of contact, available on the phone so you get answers fast — including on the questions Canada raises constantly, from province-to-province payroll variation to CPP/EI cap calculations and work permit processing. We blend HR advisory with in-market expertise, and we stay flexible around the needs of your business. [EOR Services](https://topsourceworldwide.com/employer-of-record/) [Canada Payroll](https://topsourceworldwide.com/global-payroll/canada/) > “Their expertise and understanding of the unique hiring, payment, and human resource practices in each country has been nothing short of outstanding. Our Client Success Manager, has done just that … ensured our success. Her availability and willingness to engage on a personal level has made all the difference.” Director of Research Operations, > “Excellent service, especially from our account manager who has gone above and beyond to help us use the platform effectively. Our manager, significantly simplifies my workload. It is like having your own TopSource HR representative on your team.” Chief Human Resources Officer, > “TopSource has been our go-to resource for international hiring. They are responsive, thorough, respectful and knowledgeable. The Client Success team has provided us with the utmost customer service, and the more we use TopSource, the more, it gives us access to more resources and knowledge.” Senior Manager, Human Resources , ## More than an Employer of Record. Employer of Record services are only one way that we help you accelerate your global growth goals. From talent advisory to entity management, we give you the tools you need to research, enter and expand into your key markets. ##### Market Selection Advisory Compare available talent, compensation, additional costs and regulations across different countries [Read more](https://topsourceworldwide.com/hr-advisory/market-selection-advisory/) ##### Salary Benchmarking Identify and prioritize markets for growth based on talent, cost & regulations [Read more](https://topsourceworldwide.com/hr-advisory/salary-benchmarking/) ##### Global Skills Analysis Map skill availability by region to align talent strategies with business goals.. [Read more](https://topsourceworldwide.com/hr-advisory/global-skills-analysis/) ##### Talent Acquisition Find, hire & onboard the highly skilled team members you need in each locality. [Read more](https://topsourceworldwide.com/talent-acquisition/) ##### Talent Strategy Optimization Optimize your talent strategy to enable your organization to achieve it’s global ambitions. [Read more](https://topsourceworldwide.com/hr-advisory/talent-strategy-optimization/) ##### Global Benefits Review Benchmark your global benefits to boost employee retention. [Read more](https://topsourceworldwide.com/hr-advisory/global-benefits-review/) ## Frequently asked questions ### What does an employee in Canada actually cost? The base is gross salary plus approximately 8% in combined CPP and EI employer costs (varying by earnings level and province). Some provinces add payroll taxes. Federal and provincial income tax are withheld from the employee’s pay. We quote the exact all-in cost per hire, including province-specific taxes, before you commit. ### Why do minimum wages and taxes differ by province? Employment is primarily a provincial jurisdiction in Canada. Every province sets its own minimum wage (typically higher than the federal floor), tax brackets and rates. Federal CPP/EI apply everywhere, but provincial payroll taxes apply based on where the employee works, not where your company is based. This creates multi-layer payroll complexity. ### What is CPP2 and why does it matter? CPP2 is a second tier of Canada Pension Plan contributions at 4% on earnings from CAD $74,600 to $85,000. It was introduced as part of a multi-year enhancement to CPP benefits. Employers match CPP2 dollar-for-dollar. For higher earners, this adds material cost. We calculate both CPP and CPP2 correctly for every employee. ### How do provincial tax brackets work? Federal and provincial income tax are calculated separately. Every province has its own brackets, rates and basic personal amounts. Most provinces index these annually for inflation. The province where the employee works determines which provincial tax applies. A remote worker in Nova Scotia pays Nova Scotia provincial tax even if your company is in Alberta. ### Can you sponsor work permits for non-Canadian hires? Yes. Canada operates a points-based skilled immigration system. We manage work permit applications for eligible candidates under federal immigration channels. Processing times vary significantly by role and programme. Some industries and shortage areas qualify for faster pathways. We build realistic timelines into start dates. ### EOR or our own Canadian company — which should we choose? EOR wins on speed and simplicity: employees working in days, no corporate setup, and multi-province payroll handled centrally. Your own company wins on scale once Canadian headcount and permanence are certain. Many clients run both in sequence — EOR to enter, company once proven — and we transfer the team across when the time comes. [Couldn’t find what you were looking for?](/contact-us/) ## Hire Anywhere with Our EOR Services We help you legally employ and pay talent across 180+ countries—so you can scale faster. 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[Paraguay Capital: Asunción Currency: Guaraní](https://topsourceworldwide.com/employer-of-record/paraguay/) [Peru Capital: Lima Currency: Peruvian Sol](https://topsourceworldwide.com/employer-of-record/peru/) [Philippines Capital: Manila Currency: Peso](https://topsourceworldwide.com/employer-of-record/philippines/) [Portugal Capital: Lisbon Currency: Euro](https://topsourceworldwide.com/employer-of-record/portugal/) [Puerto Rico Capital: San Juan Currency: Dollar](https://topsourceworldwide.com/employer-of-record/puerto-rico/) [Qatar Capital: Doha Currency: Riyal](https://topsourceworldwide.com/employer-of-record/qatar/) [Romania Capital: Bucharest Currency: Romanian](https://topsourceworldwide.com/employer-of-record/romania/) [Rwanda Capital: Kigali Currency: Rwandan Franc](https://topsourceworldwide.com/employer-of-record/rwanda/) [Saint Kitts & Nevis Capital: Basseterre Currency: Dollar](https://topsourceworldwide.com/employer-of-record/saint-kitts-nevis/) [Saint Lucia Capital: Castries Currency: Dollar](https://topsourceworldwide.com/employer-of-record/saint-lucia/) [Saint Vincent & the Grenadines Capital: Kingstown Currency: Dollar](https://topsourceworldwide.com/employer-of-record/saint-vincent-the-grenadines/) [Saipan Capital: Capitol Hill Currency: US Dollar](https://topsourceworldwide.com/employer-of-record/saipan/) [San Marino Capital: City of San Marino Currency: Euro](https://topsourceworldwide.com/employer-of-record/san-marino/) [Saudi Arabia Capital: Riyadh Currency: Riyal](https://topsourceworldwide.com/employer-of-record/saudi-arabia/) [Senegal Capital: Dakar Currency: West African CFA Franc](https://topsourceworldwide.com/employer-of-record/senegal/) [Serbia Capital: Belgrade Currency: Serbian Dinar](https://topsourceworldwide.com/employer-of-record/serbia/) [Seychelles Capital: Victoria Currency: Seychellois Rupee](https://topsourceworldwide.com/employer-of-record/seychelles/) [Slovakia Capital: Bratislava Currency: Euro](https://topsourceworldwide.com/employer-of-record/slovakia/) [Slovenia Capital: Ljubljana Currency: Euro](https://topsourceworldwide.com/employer-of-record/slovenia/) [Solomon Island Capital: Honiara Currency: Solomon Islands Dollar](https://topsourceworldwide.com/employer-of-record/solomon-island/) [South Korea Capital: Seoul Currency: Won](https://topsourceworldwide.com/employer-of-record/south-korea/) [South Sudan Capital: Juba Currency: South Sudanese Pound](https://topsourceworldwide.com/employer-of-record/south-sudan/) [Sri Lanka Capital: Colombo Currency: Rupee](https://topsourceworldwide.com/employer-of-record/sri-lanka/) [St-Maarten Capital: Philipsburg Currency: Netherlands Antillean Guilder](https://topsourceworldwide.com/employer-of-record/st-maarten/) [Sudan Capital: Khartoum Currency: Sudanese Pound](https://topsourceworldwide.com/employer-of-record/sudan/) [Suriname Capital: Paramaribo Currency: Surinamese Dollar](https://topsourceworldwide.com/employer-of-record/suriname/) [Sweden Capital: Stockholm Currency: Swedish Krona](https://topsourceworldwide.com/employer-of-record/sweden/) [Taiwan Capital: Taipei Currency: Dollar](https://topsourceworldwide.com/employer-of-record/taiwan/) [Thailand Capital: Bangkok Currency: Thai Baht](https://topsourceworldwide.com/employer-of-record/thailand/) [Trinidad & Tobago Capital: Port of Spain Currency: Trinidad and Tobago Dollar](https://topsourceworldwide.com/employer-of-record/trinidad-tobago/) [Tunisia Capital: Tunis Currency: Tunisian Dinar](https://topsourceworldwide.com/employer-of-record/tunisia/) [Uganda Capital: Kampala Currency: Ugandan Shilling](https://topsourceworldwide.com/employer-of-record/uganda/) [United Kingdom Capital: London Currency: Ponds Sterling](https://topsourceworldwide.com/employer-of-record/united-kingdom/) [US Virgin Island Capital: Charlotte Amalie Currency: United States Dollar](https://topsourceworldwide.com/employer-of-record/us-virgin-island/) [Venezuela Capital: Caracas Currency: Venezuelan Bolívar](https://topsourceworldwide.com/employer-of-record/venezuela/) [Zambia Capital: Lusaka Currency: Zambian Kwacha](https://topsourceworldwide.com/employer-of-record/zambia/) [Zimbabwe Capital: Harare Currency: Zimbabwean Dollar](https://topsourceworldwide.com/employer-of-record/zimbabwe/) Load more