Payroll & Employment Guide Canada flag

Payroll & Employment Guide Canada

Canada is one of the world’s most stable and business-friendly countries, offering a strong economy, a highly skilled and diverse workforce, and a transparent legal system. With competitive salaries and a well-regulated employment landscape, Canada is an ideal location for companies looking to hire remotely or expand globally.

Payroll & Employment Guide Canada
CurrencyCanadian Dollar (CAD)
LanguagesEnglish, French
Minimum wage$16.55/hour
Employment cost1.2 to 1.4 times the gross salary
Working hours40 hours per week
VAT15%
Probation periodNot legally mandatory
Paid leave daysMinimum 2 weeks per year
Categories

Hiring guide

Canada offers a mature, transparent, and regulated labour market ideal for international employers. From wage regulations to social insurance contributions, it’s essential to understand local and provincial employment laws.

Discover everything you need to know about hiring in Canada, from minimum wage rules to compliance requirements.

Learn more

Employment contracts

In Canada, employment contracts can be written, verbal, or implied. However, written contracts are highly recommended and often required to clearly outline the terms of employment and mitigate legal risks.

Notice periods: 1 week to 8 weeks, depending on the service period

Termination of employment: Termination can be with or without cause. With cause, the employee can be dismissed immediately without notice or severance due to serious misconduct. Without cause, the employer must provide notice or pay in lieu of, and severance if applicable.

Want to learn more about employment contracts in Canada? Get our full template now!

Employee benefits

Employers in Canada must provide all the mandatory benefits, with specific requirements varying by province and employment type. Many companies go beyond the minimum by offering optional benefits to attract and retain talented employees.

Mandatory benefits: Canada Pension Plan (CPP), Employment Insurance (EI), paid vacation
Common perks: Health & dental insurance, wellness programmes, retirement plans
Leave policies: Maternity leave, paternal leave, annual leave, public holidays, medical leave, critical illness leave.

Want to learn more about all the employee benefits available in Canada?

EOR services

Using EOR services in Canada allows you to legally employ individuals in the country without opening legal entities there. The EOR takes over all the legal responsibilities as an official employer, including:

  • Legal employment and contracts
  • Payroll processing
  • Tax withholding
  • Benefits administration
  • Onboarding/offboarding employees

PEO services

Using PEO services in Canada provides HR and administrative support, while you remain the legal employer. PEO services are ideal for employers who already have legal entities in Canada but need support to manage their workforce operations, including:

  • HR support and workforce administration
  • Payroll and benefits management
  • Compliance and local labour law guidance
  • Employment contracts assistance

Payroll calculator

Native Teams provides a payroll calculator adjusted per Canada’s labour laws. Estimate gross-to-net salaries, tax withholdings, and employer costs in Canada with our localised calculator. Designed to meet all payroll and compliance requirements.

Note: The information provided above is for general guidance only and should not be considered a substitute for legal advice. We strongly recommend consulting with qualified professionals who specialise in local labour laws before making any hiring decisions. While the data was accurate at the time of writing, labour regulations are subject to change, and it is your responsibility to stay informed about the latest developments.

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Frequently asked questions

Freelancers or gig workers in Canada must be registered as self-employed and handle their own taxes. As a client, you’re not responsible for tax deductions but must avoid creating a relationship that resembles full-time employment to prevent misclassification.

When working with freelancers or gig workers, it’s also essential to have a clear contract that outlines the scope of services, duties, payment terms, and other key details.