Hiring in Canada just got a whole lot easier.

Wondering how to hire an employee in Ontario? Or Ottawa? Gusto Global makes it easy to hire, onboard, manage, and pay the talent you need across borders without increasing complexity. You’ve got a business to run. Let us handle the paperwork.

Time to hire: As fast as 2 working days
Currency: Canadian Dollar ($, CAD)
Payroll Cycle: Biweekly
Capital City/Time Zone: Ottawa, Time zones span from Pacific (PST, GMT-8:00) to Atlantic (AST, GMT-4:00)

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All your people, all in one place

Global or domestic, employees or contractors—you can now pay your whole team around the world in just a few clicks.

Expand your talent pool without expanding admin

Easily access the top talent you need to grow your business, no matter where they call home.

Complex compliance, taken care of

We’ll guide you through compliance with contracts, taxes, and local labor laws so you can hire quickly and confidently without the headaches.

Before Gusto, we spent up to eight hours per week on compliance-related research and tasks. We’ve saved more than 100 hours on the entire process since starting with Gusto.

Former Vice President of Finance, Goldbelly

Guide to Hiring in Canada

Hiring Canadian employees is an easy solution for U.S. based companies looking to expand their talent pool without dealing with language barriers, wide cultural differences, and mis-matched time-zones. But, as hiring an employee in Canada requires an owned entity, it can be prohibitively expensive and complex. That’s where Gusto’s partnership with Remote’s EOR service comes in. Through our partnership, Remote becomes the Employer of Record, and you can hire across borders with ease knowing your business stays compliant.

Got questions on hiring employees in Canada? Check out our complete guide to rules, regulations, costs and customs in America’s friendly neighbor to the north.

Worker classification

Canada distinguishes between employers and contractors based on a variety of measures, and it’s critical you classify any workers correctly to avoid hefty fines.

Tests to determine correct classification include: the worker’s level of autonomy and control, equipment ownership, independence vs. integration with teams, time-bound engagement, and exclusivity of services.

Gusto can help you hire and pay both international contractors and full-time employees who live and work in Canada.

Pay & tax

The employer cost in Canada is estimated between 8.23% and 14.63% of an employee’s salary, depending on their province of residence.

Employer: 5.95% (5.7% in 2022) to Canada Pension Plan, up to $3,754.45 per year; 2.32% (2.21% in 2022) to Employment Insurance, up to $1,468.77 per year (can vary by province).

Employee: 5.95% (5.7% in 2022) to Canada Pension Plan, up to $3,754.45 per year; 1.66% (1.58% in 2022) to Employment Insurance, up to $1,049.12 per year (can vary by province).

Employee Federal Income Tax

15% – $0 to $53,359
20.5% – $53,359 to $106,717
26% – $106,717 up to $165,340
29% – $165,340 up to $235,675
33% – Above $235,675

Employee Provincial Income TaxCanada’s individual provinces and territories charge their own income taxes to residents and workers. These rates change periodically and vary widely from one province to another. Remote’s legal entity in Canada is based in the province of British Columbia, and income tax withholding is based on this province’s rates. For employees residing outside of this province, province-specific adjustments to the tax withholding amount will be needed. For updated information regarding tax rates in specific provinces, view Canada’s official tax website.

Benefits

Pension

The Canada Pension Plan (CPP) is a mandatory, public pension plan in Canada that provides basic financial support to retired, disabled or deceased workers and their families. It is funded by percentage-based contributions from both employees and employers, as well as self-employed individuals.

Canadians in Québec, however, are covered by the Québec Pension Plan (QPP) and pay different percentages than other Canadian regions.

Health Insurance

According to Remote, 99% of employers provide supplemental health benefits for employees in Canada above and beyond the public healthcare system.

Supplemental health insurance provides employees with access to a wider range of options for providers and specialists, as well as significantly shorter wait times. Extended coverage may include things like prescription drug coverage, paramedical services like massage therapy or physical therapy, or dental and vision coverage—all health benefits that are not standard offerings under Canada’s social healthcare system.

Life, accident, and long-term disability insurance are also offered by 90% of employers in Canada.

Benefits plans through Remote allow you to offer health, vision, dental, and pension, along with mental health support and life and disability insurance.

Statutory time off & leave policies

PTO: Paid time off laws in Canada vary by province. Federal employment legislation guarantees two weeks of PTO to employees after one year of work. After five years, the minimum increases to three weeks, then four weeks at 10 years.

These are the minimum legal requirements, but the average Canadian receives 19 vacation days annually. Others follow a similar progressive philosophy — starting with three to four weeks, and often up to six weeks. Employers may offer unlimited time off in Canada.

When an employee leaves, employers must pay out any accrued PTO within 30 days, both for completed years on the job and the current partial year.

Sick Leave: Employees in Canada are guaranteed protected time off for sick leave, though the annual entitlement varies by province. Sick leave is front-loaded, meaning employees get the full amount at the beginning of each year, and it does not roll over.

Public Holidays: Canada observes several public holidays (see below). Employees are entitled to holiday pay no matter how long they have worked for the company. Some provinces observe holidays in addition to this list.

New Year’s Day	January 1	National
Good Friday	Friday before Easter Sunday	National
Victoria Day	Monday preceding May 25	National except NS, NL
Canada Day	July 1	National
Civic Holiday	First Monday in August	AB, BC, SK, ON, NB, NU
Labour Day	First Monday in September	National
National Day for Truth and Reconciliation	September 30	National, federally regulated workplaces only
Thanksgiving	Second Monday in October	National except NS, NL
Remembrance Day	November 11	National except MB, ON, QC, NS
Christmas Day	December 25	National

Leave for Legal Proceedings: Employees in Canada are entitled to protected unpaid leave to serve on juries or act as witnesses, but this does not extend to employees who are parties in lawsuits, either as plaintiffs or defendants.

Parental Leave: Canada guarantees at least 15 weeks’ maternity leave and 35 weeks of parental leave (shared between partners), though some provinces set a higher minimum. Parental leave does not have to be taken consecutively, but must be used within one year of birth or adoption. The pay rate is 55% of salary, but employers do not have to cover this cost, as it’s covered by Canadian social programs.

Bereavement Leave: Federal law in Canada guarantees employees ten days of protected bereavement leave after the death of an immediate family member. As with personal leave, employers are only required to pay for three of the ten days. Employees become eligible for bereavement leave after three months of employment.

Family Violence Leave: Canada is one of a few nations to offer family violence leave for victims. Employers must offer at least 10 days of protected leave to employees to use in case of family violence, five of which must be paid. Employees accused of committing acts of family violence are not eligible.Aboriginal Employee Leave: Employees in Canada with Aboriginal heritage are entitled to receive five days of unpaid leave per year to observe Aboriginal customs and events, which can include fishing, hunting, and traditional ceremonies.

Termination

Termination Process: Canada does not practice at-will employment, meaning you have to prove serious misconduct if you want to fire an employee after their probationary period has ended. Canadian laws encourage employers to work with employees who are underperforming instead of defaulting to termination. It is also common in Canada to include a termination clause in contracts to establish and govern the rights and obligations for employer and employee.

In cases where termination is unavoidable, employees in Canada retain a few protections, but legislation varies across provinces and territories with local laws. For instance, after two years of employment, employees in Quebec gain additional protections similar to those enjoyed by workers in the UK and France. An employee in Quebec with two years of service can only be terminated in a layoff or for serious infractions.

Notice Period: Employees are usually entitled to notice (or pay in lieu of notice) when being terminated. Notice periods vary based on age, experience, tenure, availability of other work options, and the application and length of notice period differ across provinces.Probationary Periods: Probationary periods are common in Canada and typically last around three months. Some provinces enforce mandatory probationary periods to provide employers with some protection, even when the probationary period is not specified in the employment agreement.

Onboarding

Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time we need is only 2 working days. Onboarding time begins after the employee submits all required information, and the onboarding timeline is also dependent upon registration with local authorities.

While Gusto Global and Remote will guide you through the compliance side, creating a positive onboarding experience is a crucial part of hiring and retaining talent. Beyond just filing forms and running a background check, you should get your new team member set up with benefits and devices, create custom welcome emails, and send org charts to help them feel like part of the team. Gusto will also help craft custom offer letters compliant with Canadian hiring law including:

Position, job description, and start date
Working hours
Compensation and benefits (salary, equity, vacation, and insurance)
Termination policy
Confidentiality and non-disclosure agreements
Contact information and phone number

Minimum wage

The Government of Canada set a federal minimum wage of CAD$16.65 per hour, rising with inflation, effective on April 1, 2023. However, each province still sets their own hourly minimum wage, and most provinces adjust them regularly to keep up with inflation. The Retail Council of Canada maintains an updated list of minimum wages in the country.

Overtime pay and maximum working hours

Canada uses a standard 40-hour workweek with 8-hour days from Monday to Friday. In most cases, employees can work a maximum of 48 hours weekly, and hours worked outside of standard hours require overtime pay. The exact amount depends on the employee’s regular schedule, role, and what is agreed upon in the contract, and some roles (such as doctors, lawyers, and managerial roles) may be exempt. Overtime compensation is a fixed rate of 1.5 times the employee’s regular wage, and overtime is capped at 8 hours per week. Employers cannot force employees to work more than their scheduled hours. Overtime triggering limits also vary by province, ranging from 40 to 48 hours.

Weeks that contain holidays must reduce the standard working hours by 8 hours for each holiday. In a week when a holiday occurs, overtime applies after 32 hours.In Ontario, information technology professionals are usually excluded from many of the protections awarded in the Employment Standards Act, including daily/weekly limits on hours of work, daily rest periods, time off between shifts, eating periods, and overtime pay. This is also true of high technology professionals in BC. Specific exclusions vary according to each province/territory.

Additional info

For 36 months, employers must keep records of all hours worked by employees regardless of whether the employee is paid hourly or is salaried or is entitled to overtime pay. Some records are required to be retained for longer (e.g., retention of vacation time records in Ontario are required to be kept for five years).

What is global payroll?

Global payroll refers to the process of managing and processing payroll for employees and contractors located in different countries. Performing global payroll services can be a complex task. Every country has different laws and regulations around payroll taxes, benefits, and other factors. When you outsource and use a global payroll solution from a trusted provider like Gusto, companies can save time and money while ensuring compliance with local laws and regulations.

What is an Employer of Record (EOR?)

An employer of record (EOR) is an employment services provider enabling you to employ people in other countries while complying with local tax and employment laws. An EOR handles everything required to hire, pay, and manage employees, including payroll, benefits, taxes, stock options, and local compliance.

Through an EOR, a company can hire employees in another country without having to set up a local entity, which can take months and be prohibitively expensive. Having an EOR in place can help an SMB quickly, affordably, and compliantly hire international employees.

What’s the difference between an EOR with owned entities and outside vendors?

Many EOR providers use a network of different outside vendors for each country entity, which lets them expand to new countries quickly, but may compromise the service and security that you get. For their customers, this can lead to:

Varying levels of service quality due to lack of control over vendors
Additional fees and costs due to the involvement of multiple vendors
Exposure to multiple points of risk by passing intellectual property between entities
Increased exposure to regulatory non-compliance
Delays in customer service due to reliance on different vendors

EOR providers that own and manage each country entity directly ensure that their customers have a seamless experience when hiring globally. Through an EOR with owned entities, customers benefit from:

Direct and reliable services, ensuring a better experience for businesses and their employees
Transparent pricing with less administrative overhead, resulting in lower costs
Guaranteed stronger protection for intellectual property to ensure your IP stays in-house
Data protection and minimized risks by limiting the sharing of sensitive data with third parties
A single point of contact for all global employment needs, simplifying issue resolution and streamlining answers to questions
Established legal presence in the countries where the EOR operates, enabling them to understand and navigate local employment laws accurately

Selecting an EOR with 100% owned entities, like Gusto Global through our partnership with Remote, customers access best-in-class service and compliance management when hiring across the globe.

Why would businesses want to hire international employees versus having contractors?

While contractors are a valuable component of any team, hiring international team members can come with a variety of benefits, especially for fast-scaling, high-growth startups and SMBs:

For many skilled roles, it can be hard to find talent with the right expertise. In a competitive market, companies can get a huge advantage if they’re able to offer full-time employment and benefits customized for the norms of a specific country.
Having on-the-ground international employees can make it easier to enter a new market
In many countries, there are also stronger intellectual property agreements in place when businesses hire employees rather than contractors
Finally, international employees can feel more connected and more part of the team; especially when they get access to the same tools and work experiences as their peers in other countries

Through Gusto Global, can businesses hire all types of workers (e.g. part-time, hourly)? Or is it just full-time, salaried employees?

At this time, Gusto Global is designed for full-time, salaried employees in the countries we support. We also support international contractor payments in 120 countries and counting.