Employing in Canada

Hailed as the ‘start-up mecca to rival Silicon Valley’, Canada is also the home of Niagara Falls, ice hockey and maple syrup. But for budding businesses — from the US and elsewhere in the world — that have their sights set on global expansion, the Great White North also has plenty else to offer. The business hubs of Toronto, Vancouver and Montreal have proved particularly tempting to entrepreneurs.

Thanks to its low corporate tax rate of just 15% and the various grants, loans and incentives available (including the Start-up Visa Program for foreign business owners), Canada is consistently ranked as one of the top places in the world for doing business.

Not only that but the country is also considered among the world’s top 10 economies. One of the few countries to be affected by the 2008 financial crisis, Canada has been progressing steadily for some time now, and further growth is forecasted over the next decade.

Combined with the friendly, inclusive nature of its inhabitants, Canada’s economic stability and calm political landscape make it even more appealing to foreign investors seeking a reliable location to gain a foothold. Plus, almost 30% of Canadians speak French, which has achieved a growing status as a business language in recent years. But English is also spoken across the country, making it easy for international companies to do business.

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Contents

Our Expertise

Managing a global workforce in Canada

Canada, known for its vast natural resources and multicultural cities, offers a dynamic and skilled labour market. TopSource Worldwide provides expert services to help businesses navigate the complexities of Canadian employment regulations, including compliance with the Employment Standards Act and the Canada Pension Plan (CPP) contributions.

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Extensive expertise

Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.

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Entity-free employment

Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.

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Payroll without hassle

Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success. 

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Always-on support

Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.

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Global Employee Cost Calculator

Estimate the cost of your new hire with our calculator. Simply enter their location and salary information in to this handy tool to see what will be spent in employment costs each month.

TESTIMONIALS

Hear from our clients about our EOR solutions in Canada

"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."

Annette van Duijnhoven
Nutreco
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”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."

Praveen Lihinar
Sungard
See our customer stories

”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."

Supervisor
Client based in Ft Worth, Texas, USA
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GLOBAL EXPANSION STRATEGY

Personalised Employer of Record services in Canada

TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in Canada. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your Canada-based employees.

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End-to-end Canada payroll services

Looking to expand into Canada? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your Canada expansion initiatives.

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Global entity management

Venturing into the Canadian market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.

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Accounting

Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.

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Global EOR services

Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.

Global Expansion Simplified

How to do business in Canada

Entering the Canadian market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.

TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in Canada.

Start your Canada expansion
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Canada Insights

Key insights into Canada's landscape

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VAT rates: Canada has a Goods and Services Tax at 5%, and a Harmonised Sales Tax combining federal and provincial taxes, ranging from 13%-15%.

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Ease of Doing Business rank: Canada ranks 23rd in the World Bank's Ease of Doing Business Index, indicating a favourable business environment.

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Consumer Confidence Index: Canada's Consumer Confidence Index data was reported at 37.203 in January 2023.

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Employee maternity/paternity leave: Maternity and parental leave policies vary by province, but federally, it offers up to 50 weeks of combined maternity and parental leave.

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Employee termination period: Standard notice for termination varies by province, typically ranging from 1 to 8 weeks depending on employment duration.

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Employee salary pay date: Wages are commonly paid bi-weekly or monthly, with specific pay dates outlined in employment contracts.

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Bank holidays: Public holidays in Canada include New Year's Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving, Christmas, and other province-specific holidays.

An overview of the main statutory benefits

Pension

Canada Pension Plan (CPP)

Any employee working in pensionable employment will have pension contributions deducted from their pay by their employer and cannot elect to stop contributing to the CPP until they reach at least 65 years of age.

It’s the responsibility of the employer to calculate how much CPP to deduct, using the annual CPP contribution rates and maximums.

Employers must contribute an amount equal to the CPP deducted from the employee’s remuneration.

The maximum pensionable earnings will be provided each year by the CPP. Deductions are stopped once the contributions reach the maximum annual threshold.

 

CPP contribution rates: 2021

Maximum annual pensionable earnings
Basic exemption amount
Maximum contributory earnings
Employee and employer contribution rate (%)
Maximum employee and employer contribution
$61,7000
$3,500
$58,100
5.45
$3,166.45

Québec Pension Plan (QPP)

Québec employers deduct QPP contributions instead of CPP contributions. The contribution rates for QPP are higher than those for CPP.


Sickness

If an employee cannot work for medical reasons, EI sickness benefits can provide up to 15 weeks of financial assistance of a maximum of $595 per week.


Maternity & paternity

A pregnant employee is entitled to up to 17 weeks (18 weeks in Québec) of maternity leave. This leave can be taken at any time during the period that:

  • Begins 13 weeks before the expected date of birth, and
  • Ends 17 weeks after the actual birthdate
 In Québec:
  • The leave may begin as of the 16th week before the expected date of birth, and
  • End no later than 20 weeks after the week of the delivery

An employee must provide their employer with a certificate from a healthcare practitioner confirming they are pregnant. They must also give notice at least four weeks (three weeks’ notice in Québec) before starting the leave advising the length of leave to be taken.

Employees are also entitled to up to 63 weeks of unpaid parental leave. Employees in Québec are entitled to up to 65 weeks of unpaid parental leave after the child’s birth. Furthermore, employees in Québec are entitled to unpaid paternity leave upon the birth of the child equal to 5 consecutive weeks.

Maternity leave and parental leave are addressed under employment standards legislation in each province. EI is available for employees who are pregnant, have recently given birth, are adopting a child or are caring for a newborn. Because EI benefits provide only a portion of an employee’s regular wages, many employers offer ‘top-up’ benefits to employees for some portion of their leave.


Enhanced benefits

Registered Retirement Savings Plan (RRSP)

TopSource Worldwide offers an RRSP scheme through Manulife. It should be noted that contributions are entirely voluntary both on behalf of the employer and employee. The employer can determine whether the employee will be required to match any employer contributions. We can work with our clients on this during the onboarding phase.

Health insurance

TopSource Worldwide can offer an enhanced healthcare policy for employees through Manulife which provides for extended healthcare, dental and also includes life assurance, accidental death & dismemberment and long-term disability.

Contractual provisions

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Contract of employment

Please note that it’s important in Canada for employees to sign their contract prior to the hire date.

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Probationary period

The customary probationary period is three months.

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Working hours

The standard working hours of an employee in a federally regulated industry are:

  • Eight hours in a day (any period of 24 consecutive hours)
  • 40 hours in a week (the period between midnight on Saturday and midnight on the Saturday that immediately follows)
Federally regulated employees are all entitled to one full day of rest each week, which usually falls on a Sunday.
 
In most cases, the maximum number of hours worked in a week is 48. This can be exceeded in exceptional circumstances including permits, for emergency work, under an averaging plan or a modified work schedule.
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Bereavement leave (paid and unpaid)

Employees are entitled to five days of bereavement leave in the event of a death of an immediate family member. They can take this leave over more than one period starting the day on which the death occurs and ending six weeks after the date of the funeral/burial/memorial service of that immediate family member.

In Québec, the leave must be taken between the time of death and the funeral. Certain days of leave could be used at the time of death and then, after a return to work, other days of leave could be taken during the funeral.

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Vacation allowance

Any vacation pay owed to an employee by the employer must be paid at the time the employee takes their vacation. If the employment ends and the employee is owed vacation pay, the employer must pay it within 30 days after the employee’s last day of work.

Vacation pay is calculated as a percentage of the gross wages an employee earns during the ‘year of employment’. The amount varies between 4% or 6%.

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Overtime

Any hours worked in excess of the standard hours of work are considered overtime hours.

Overtime pay is at a rate of a minimum of 1.5 times the regular hourly wage for those hours that would apply, with the following exceptions:

Managers and professionals, such as doctors, lawyers, dentists, architects and engineers are exempt from overtime.

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Compassionate care leave

An employee may take up to 28 weeks (27 weeks in Québec) of unpaid leave within a 52-week period to care for a family member who has a serious medical condition with a significant risk of death.

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Leave related to critical illness

If an employee is a family member of a critically ill child or adult, they are eligible to take:

  •  Up to 37 weeks (36 weeks in Québec) of leave in a 52-week period to provide care or support to the child under 18 years of age
  • Up to 17 weeks (16 weeks in Québec) of leave in a 52-week period to provide care or support to the adult

This leave is unpaid

Additional leave

Employees are entitled to up to five days of personal leave per calendar year to:

  • Treat an injury or illness
  • Take care of health obligations or care for any family member
  • Take care of obligations related to the education of any family member under age 18
  • Manage any urgent situation that concerns themselves or a family member
  • Attend their citizenship ceremony under the Citizenship Act, or
  • Manage any other situation prescribed by regulation
 In Québec, employees can be absent from work 10 days per year to fulfil obligations related to:
  • The care, health or education of their child or the child of their spouse
  • The health of a parent or a person for whom they act as a caregiver

If the employee has been employed for three months, the employee is then entitled to two days of absence paid per calendar year for the reasons above, as well as under the following circumstances:

  • In the event of illness or accident
  • For their organ or tissue donation
  • As a result of domestic or sexual violence or a criminal act

Additionally, employees in Québec are entitled one paid day for the employee’s marriage or civil union if it falls on a working day. The employee is entitled to one unpaid day for the marriage or civil union of an immediate family member.

An employer may request that the employee provide supporting documents to evidence the reason of leave. This may be requested up to 15 days after the return to work.

 

Termination

Federally regulated employees don’t have to give their employer notice if they choose to quit. However, if the employer chooses to terminate a position, they must either:

  • Provide the employee with at least two weeks’ written notice
  • In lieu of such notice, pay the employee two weeks’ regular wages
 In Québec, the notice period varies depending on the length of the employee’s uninterrupted service:
Length of service
Notice period
Three months to one year
One week
One to five years
Two weeks
Five to 10 years
Four weeks
10 years or more
Eight weeks

An employee has the right to collect severance pay if they’ve completed at least 12 consecutive months of continuous employment before their layoff or dismissal resulted in a termination of employment. They’re entitled to two days’ regular wages for each full year they worked for the employer before their termination of employment. The minimum benefit is five days’ wages.

Holiday & leave

Federally regulated employees are entitled to a minimum of two weeks of vacation annually after completing one year of employment with the same employer. After five consecutive years of employment with the same employer, the entitlement increases to three weeks of vacation annually.

In all provinces, employees are entitled to at least two weeks of vacation per year; in Saskatchewan, employees are entitled to three weeks per year.

A vacation pay calculator is available to assist in determining vacation entitlements. This calculator applies to the majority of employees in the federal jurisdiction.

Employees are also entitled to between six to 10 paid statutory holidays per year. If an employee is required to work a holiday, the employee is entitled to premium pay (typically time-and-one-half) as well as to holiday pay for that day.

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Specialising in multi-country payroll solutions

TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.

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Calculate Your Employer of Record Taxes in Seconds

Employment Cost Calculator in Canada

Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.

In addition to calculating your EOR taxes, our calculator can also help you:

  • Understand the different types of EOR taxes
  • Stay up-to-date on the latest changes to EOR tax regulations
  • Avoid penalties for non-compliance
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Employer of Record FAQ

Frequently Asked Questions about Canadian employment solutions

What is an Employer of Record in Canada?

An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in Canada. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.

How do global employment services work?

Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.

What are the benefits of working with an Employer of Record in Canada?

Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in Canada. This allows companies to expand globally without the complexities of establishing legal entities in each location.

What is the difference between EOR & PEO?

An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.

How are employer payroll taxes calculated in Canada?

Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in Canada. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.

What global employment solutions does TopSource offer?

TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.

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