Hiring guide in Canada

What should I know about hiring in Canada?

Minimum wage

Contributions & Taxes

Employer Tax

The total employment cost in Canada is 7.91% + 1.37 CAD for every 100 CAD.

Corporate Tax

Corporations are subject to a 38% federal income tax, but after accounting for a 10% federal tax abatement and a 13% general tax reduction, their effective tax rate is closer to 15%.

Employee Tax

Employees contribute 5.70% to the Canada Pension Plan and 1.58% to Employment Insurance.

Income Tax

Income tax rates at the federal level are between 15% and 33%.

To calculate the salary and taxes in Canada please click here.

Payroll cycle

Pay periods in Canada range from weekly to hourly to monthly to semi monthly. Workers paid once a month must have their paychecks deposited into their bank accounts no later than the tenth business day following the end of the pay period.

Is there a 13th salary in Canada?

No requirements for 13th pay are specified in the law.

Labor rules

Probation period rules

In Ontario, a permanent employee must serve at least a 3-month probationary period.

Notice Period 

In Canada, notice periods are often tied to the employee’s length of service and the grounds for termination and are spelt out in the employment contract or collective agreement.

• 1-week notice: up to 2 years of service;
• 2 weeks’ notice: 2 to 4 years of service;
• 4 weeks’ notice: 4 to 6 years of service;
• 5 weeks’ notice: 6 to 8 years of service;
• 6 weeks’ notice: 8 to 10 years of service;
• 8 weeks’ notice: 10+ years of service.

Severance Period

Employees are only eligible for severance payments if they have worked for the company for at least five years, the company has a payroll of more than CAD 2.5 million per year, or the company has laid off more than 50 workers in the past six months due to the closure of all or part of the business. The amount of severance pay equals one week’s salary times the number of years worked.

Working Hours

The Employment Standards Labor Code states that a worker’s schedule cannot exceed 8 hours a day, 40 hours a week, and 48 hours a week, including overtime.

Leave and benefits

Public holidays

Public holidays in Canada are different depending on where the individual works. Every province has its special day, and there are also national ones. National holidays are:

1. New Year
2. Good Friday
3. Canada Day
4. Labour Day
5. Christmas Day

Sick leave

A maximum of 3 days of unpaid leave per year for personal illness, injury, or medical emergency are available to eligible employees who have worked for the same employer for at least 3 consecutive months.

Maternity leave & Paternity leave

If an employee has worked for the company for at least a year before the due date, they are entitled to up to 17 weeks of unpaid leave. The worker is entitled to at least two more weeks of maternity leave if the delivery happens after the anticipated date. Maternity leave must start no earlier than the 17th week before the expected due date and must terminate no later than 18 weeks later. When there is a chance that the pregnancy will end prematurely or when the pregnancy poses a risk to the mother’s or the unborn child’s health, special maternity leave may start 4 weeks before the due date. A medical certificate and 2 weeks’ notice are necessary.

Other leave

Bereavement leave

For the bereavement of a family member, there are 2 days of required leave. In the event of the child’s death or disappearance, the employee may take leave for up to 104 weeks.

Parental Leave

Parents are eligible for up to 63 weeks of unpaid vacation to care for a newborn or adopted kid. It is impossible to start parental leave until the week following the child’s birth or the week following the child’s official adoption.

The time off should start no later than 78 weeks after the birth or adoption.

Family Medical leave

Workers have up to 28 weeks of unpaid leave.

What are the minimum vacation days?

In Canada, employees receive 2 weeks of paid vacation after their first year on the job and 3 weeks of leave after 5 years.

Insurance

Health Security & Private Insurance

Anyone who has worked for an employer for at least three months within the previous fifteen months is entitled to free medical and dental care through the Social Security Administration.

*Native Teams can support you in finding the best private insurance in the country. Contact us and we will send a comparison of insurance packages and prices.*

Visa

Relocation and Work Permits

Native Teams will apply for your work visa in the nation on your behalf and serve as your Employer of Record. All the required documents can be uploaded using our app. Until you have your work and residency visa, Native Teams will support you by providing you with frequent information on the progress.

How long is the Visa / Work Permit process?

2 to 4 weeks depending on the authorities and provided documents.

Which documents do you need?

To apply for a visa/work permit in Canada, upload the documents from our onboarding list (relocation to log in/pricing).

Why use Native Teams for hiring in Canada?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.

*Note: The provided information was accurate at the time of writing.