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Quick Hiring Snapshot
Capital: Ottawa
Currency: Canadian Dollar (CAD)
Primary languages: English and French
Standard workweek: Generally 40 hours (varies by province)
Minimum vacation: At least 2 weeks paid vacation after 1 year of employment (increases with tenure, varies by province)
Typical pay frequency: Biweekly or semi-monthly
Required employer contributions: Canada Pension Plan (CPP) or Québec Pension Plan (QPP), Employment Insurance (EI), Québec Parental Insurance Plan (QPIP) for Québec employees only, Workers' Compensation, and Provincial Employer Health Taxes (EHT)
Employment framework: Provincial/territorial employment standards legislation applies for the vast majority of companies while federal law applies to certain specific industries like banks, telecom, and postal services
Hiring without a local entity: Available through Justworks EOR
Overview
Canada offers access to a highly skilled and diverse workforce across a stable and well-regulated employment environment. However, employment law in Canada depends on provincial/territorial jurisdictions, which means employment standards vary depending on where the employee works.
Employers must comply with local employment standards, payroll withholding rules, statutory contributions, and job-protected leave requirements.
When hiring through Justworks EOR, Justworks becomes the legal employer in Canada. We manage compliant employment agreements, payroll processing in Canadian dollars, statutory remittances, and required benefit administration. Your team member works day to day with your organization, while local employment compliance is handled within the applicable jurisdiction.
This guide provides a high-level overview of what to expect when hiring in Canada.
What Employers Should Plan for When Hiring in Canada
The most important consideration when hiring in Canada is determining which employment standards legislation applies. Most employees are governed by provincial or territorial employment standards laws, which set minimum requirements for wages, overtime, vacation, public holidays, leaves of absence, and termination notice.
Written employment agreements are standard practice and strongly recommended. Contracts typically outline compensation, working hours, vacation entitlement, and termination provisions. Agreements must meet or exceed statutory minimums.
Termination rules are structured. Employees are generally entitled to statutory notice of termination or pay in lieu of notice, and in some provinces, statutory severance pay may also apply based on tenure or employer size.
When hiring through Justworks EOR, employment agreements and termination processes are structured in accordance with the employee’s applicable provincial framework.
Note: This article is for informational purposes only and does not constitute legal or tax advice.
Compensation Expectations
Employees in Canada are paid in Canadian dollars (CAD). Biweekly and semi-monthly payroll schedules are most common, although minimum pay frequency requirements may vary by province.
Canada has no single national minimum wage for workers in the provincial private sector. Minimum wage rates are set by each province or territory and are updated periodically. Employers must ensure that compensation meets or exceeds the applicable provincial rate.
In addition to base salary, employers must withhold and remit:
- Federal income tax
- Provincial or territorial income tax
- Canada Pension Plan (CPP) contributions (or Québec Pension Plan (QPP) in Québec)
- Québec Parental Insurance Plan (QPIP), for Québec employees only
- Employment Insurance (EI) premiums
Employers also match CPP/QPP contributions and contribute to EI and QPIP at prescribed rates.
In addition, employers have to cover Workers' Compensation Premiums and Provincial Employer Health Taxes (EHT) depending on province and total payroll. Québec also requires employers to cover additional contributions to Labour Standards and Workforce Skills Development and Recognition / Training Funds.
When hiring through Justworks EOR, payroll is administered in local currency and statutory deductions and employer contributions are remitted to the appropriate authorities.
Common Industries and Market Compensation
Canada has a diversified economy with strong demand across technology, financial services, professional services, and customer operations. Compensation varies by province, city, and experience level, with major metropolitan areas such as Toronto and Vancouver typically commanding higher salaries.
In addition to base salary, employers should consider total compensation elements such as annual bonuses, equity (particularly in tech), and supplemental benefits. These components can meaningfully impact total employment cost and competitiveness.
Technology and Software Development
Canada has well-established technology hubs, particularly in Toronto, Vancouver, Montréal, and Waterloo.
- Mid-level Software Developer: approximately CAD $85,000 – $120,000 per year
- Senior Software Engineer: approximately CAD $120,000 – $160,000+ per year
- Engineering Manager: approximately CAD $140,000 – $190,000+ per year
Compensation may trend higher in large urban centers and for roles requiring specialized expertise.
Financial and Professional Services
Toronto is one of North America’s major financial centers, and finance, accounting, compliance, and consulting roles are widely hired across provinces.
- Financial Analyst / Accountant: approximately CAD $65,000 – $95,000 per year
- Senior Accountant or Finance Manager: approximately CAD $100,000 – $150,000 per year
- HR Manager / Business Partner: approximately CAD $90,000 – $130,000 per year
Regulated industries and multinational environments often offer compensation at the higher end of the range.
Customer Support and Operations
Many organizations hire remote customer support, operations, and customer success roles across Canada. Compensation varies based on industry and bilingual requirements (English/French roles may command a premium).
- Customer Support Representative: approximately CAD $40,000 – $60,000 per year
- Customer Success Manager: approximately CAD $75,000 – $110,000 per year
- Operations Manager: approximately CAD $90,000 – $130,000 per year
Bilingual roles, particularly those requiring French fluency, may offer higher compensation depending on market demand.
Statutory Programs and Contributions
Canada’s employment framework includes several mandatory public programs funded through payroll contributions.
Employees outside Québec generally participate in the Canada Pension Plan (CPP), while employees in Québec participate in the Québec Pension Plan (QPP). These programs provide retirement, disability, and survivor benefits. Employer and employee contributions are required and are subject to annual maximums.
Employees also participate in Employment Insurance (EI), which provides income replacement in qualifying circumstances such as unemployment, parental leave, and certain other protected leaves. Employers contribute to EI at a higher rate than employees, as prescribed by federal regulations.
In Québec, parental and certain family benefits are administered through the Québec Parental Insurance Plan (QPIP) rather than EI. EI still appl-ies for other types of benefits depending on the situation (sickness, caregiver benefits, etc.).
Healthcare in Canada is publicly funded and administered at the provincial level. The Provincial Employer Health Tax (EHT) paid by employers serves as a mandatory contribution toward public health funding. However, it is separate from the private insurance plans offered as part of a compensation package. Although core medical coverage is not employer-sponsored, many employers offer supplemental private benefits, such as extended health, dental, vision, life insurance, and disability coverage, to remain competitive.
In addition, depending on applicable thresholds, provinces and territories require employer participation in a workers’ compensation program, which provides coverage for workplace injury or illness. These programs are administered at the provincial level.
In Québec, employers must satisfy two specific additional mandates, depending on applicable thresholds and limits: the Contribution Related to Labour Standards, a mandatory tax to fund the provincial body that enforces workplace rights, and the Workforce Skills Development and Recognition Fund (WSDRF), commonly known as the “1% Law”, which requires employers to invest at least 1% of the payroll into eligible employee training or pay the equivalent amount as a tax to the government.
When hiring through Justworks EOR, required payroll registrations and statutory remittances are managed in accordance with the applicable federal and provincial framework.
Country-Specific Leave
Leave entitlements in Canada vary by jurisdiction. Most employees are governed by provincial or territorial employment standards legislation.
Vacation Leave
Employees are generally entitled to at least two weeks of paid vacation after one year of service. In many jurisdictions, vacation entitlement increases after a defined number of years. Specific accrual and calculation rules depend on the applicable province.
Public Holidays
Public holiday entitlements are established by the employee’s governing jurisdiction. Eligibility rules, qualifying periods, and holiday pay calculations vary by province.
Sick and Medical Leave
Sick and medical leave entitlements vary by jurisdiction. Some provinces provide a defined number of short-term paid sick days, while others provide unpaid, job-protected leave, or a combination of both. Additionally, most jurisdictions now mandate extended unpaid leave for serious illness or injury to ensure long-term job protection.
Employers must apply the sick leave framework that corresponds to the employee’s governing legislation.
Parental and Family Leave
Canadian employment standards provide job-protected maternity and parental leave across jurisdictions. Wage replacement during these leaves is generally administered through:
- Employment Insurance (EI) for most provinces and territories
- Québec Parental Insurance Plan (QPIP) for employees in Québec
Eligibility requirements, benefit duration, and benefit levels are governed by the applicable federal (EI) or Québec (QPIP) program.
Hiring in Canada Through an Employer of Record
If your company does not have a Canadian legal entity, hiring directly would require local registration with tax authorities, payroll setup, and compliance with provincial employment standards.
Through Justworks EOR, Justworks becomes the legal employer in Canada. We manage compliant employment agreements, payroll processing, statutory tax remittance, and benefits administration. Your employee works with your organization while employment compliance is handled within Canada’s federal and provincial framework.
This structure allows companies to hire in Canada while navigating jurisdiction-specific requirements in a compliant and structured way.
Official Resources for Employers in Canada
FAQ
Can I hire in Canada without establishing a local entity?
Yes. Through Justworks EOR, you can hire employees in Canada without setting up your own Canadian legal entity.
What determines which employment law applies?
Employment standards are generally based on the province or territory where the employee performs work.
Are healthcare benefits mandatory?
Core healthcare is publicly funded in Canada. However, many employers offer supplemental private health and insurance benefits.
Can I submit a Qualifying Life Event (QLE) in Canada, and how is it handled?
Yes. Employees enrolled in supplemental benefits through Justworks EOR may submit a Qualifying Life Event (QLE) if they experience a change that affects benefits eligibility.
Common examples include marriage or divorce, birth or adoption of a child, loss or gain of other coverage, or a change in dependent status.
QLE requests must typically be submitted within the required enrollment window following the event, and supporting documentation may be required. If approved, benefit updates are processed according to the applicable insurance provider’s rules and timelines.
Because Canada’s core healthcare system is publicly administered, QLEs generally affect supplemental benefits such as extended health, dental, vision, life, or disability coverage.
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.