Partner with Lerio to keep employment in Canada legally sound — contracts, payroll and statutory benefits handled against the live rule set.
Every figure below is modelled, not memorised — and traceable to its source via the calculator on the right.
Employee taxes
withheld from grossIncome Tax Rates
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on top of grossEmployer Tax
on top of grossHiring in Canada is modelled by Lerio; reach out to compliance for the current Employer-of-Record path.
Canada is one of the most attractive destinations for global expansion, offering a highly educated workforce, stable economy, and strong presence in industries like technology, finance, healthcare, and natural resources. However, hiring employees in Canada requires strict compliance with federal and provincial labor laws, payroll systems, and tax regulations, which can be complex for foreign companies.
An Employer of Record (EOR) in Canada enables companies to hire employees quickly and compliantly without setting up a local entity. The EOR becomes the legal employer of record, managing payroll, taxes, statutory benefits, and HR compliance, while the client company directs the employee’s day-to-day work.
Key Benefits of Using an EOR in Canada
Fast Market Entry – Hire Canadian employees in weeks instead of months.
Legal Compliance – Stay aligned with federal and provincial labor codes, tax rules, and employment standards.
Cost Efficiency – Avoid the high costs of setting up and running a Canadian subsidiary.
Access to Talent – Tap into Canada’s diverse and skilled workforce.
Scalability – Test the market or grow teams quickly without long-term commitments.
Employment in Canada Through EOR
An Employer of Record in Canada typically manages:
Drafting and managing employment contracts compliant with federal and provincial law.
Payroll processing, including tax withholding and remittances to the Canada Revenue Agency (CRA).
Social contributions such as CPP (Canada Pension Plan) and EI (Employment Insurance).
Administration of mandatory and supplementary benefits (health insurance, retirement plans, vacation leave, etc.).
Guidance on employee terminations, which are regulated and vary by province.
Ongoing HR and compliance support for employers and employees.
Compliance and Labor Laws in Canada
Working Hours: Standard is 40 hours per week (varies by province). Overtime is typically paid at 1.5x the regular rate.
Minimum Wage: Varies by province (2025 ranges from CAD $15.00–$17.50/hour).
Paid Leave: Minimum 2 weeks’ vacation after 1 year of service; 3 weeks after 5 years. Public holidays vary by province.
Sick Leave: Federal and provincial regulations mandate paid or unpaid sick leave (e.g., federally regulated workers get 10 paid sick days per year).
Probation Period: Commonly 3–6 months, depending on the contract and province.
Termination Rules: Notice period and severance depend on province, length of service, and contract type.
Employer Contributions: Employers contribute to CPP/QPP, EI, and in some provinces, healthcare or workers’ compensation programs.
Why Choose an EOR in Canada?
Simplify Compliance – Canadian employment laws vary significantly by province. An EOR ensures full compliance everywhere you hire.
Save Time & Money – No need to establish a subsidiary or handle complex local payroll.
Flexibility – Perfect for pilot projects, contract workers, or quick expansions.
Focus on Growth – Let the EOR manage HR, payroll, and compliance while you focus on business strategy.
Local Expertise – Benefit from on-the-ground HR and legal knowledge across Canada.
An Employer of Record in Canada is the most efficient way for global companies to expand into the Canadian market. It allows businesses to hire talent quickly, stay compliant with local regulations, and operate with flexibility and confidence.
What Lerio handles
Typical timeline
via EORStatutory benefits in Canada, plus the supplemental coverage teams usually add.
Mandatory
Commonly added
optionalStatutory / Mandatory Benefits in Canada
Employment standards vary by province/territory, but the following are common nationwide entitlements:
Paid Annual Leave (Vacation) –
Minimum 2 weeks per year after 1 year of service.
3 weeks after 5 years of service (in most provinces).
4 weeks after 10 years (in some provinces, e.g., Saskatchewan).
Public Holidays – 9–12 per year, depending on the province.
Paid Sick Leave –
Federal minimum: 5 paid days per year (as of Dec 2022).
Provinces vary (e.g., British Columbia: 5 paid days; Ontario: 3 paid days).
Maternity Leave – Up to 15 weeks of job-protected leave (unpaid, but employees may receive EI benefits equal to 55% of average earnings up to a cap).
Parental Leave –
Standard: Up to 40 weeks shared (35 weeks paid via EI, max 55% of salary).
Extended: Up to 69 weeks shared (61 weeks paid via EI, at 33% of salary).
Paternity Leave – Included in shared parental leave (no separate entitlement).
Employment Insurance (EI) – Covers maternity/parental leave, sickness, and caregiver benefits (funded by employer/employee contributions).
Canada Pension Plan (CPP) / Quebec Pension Plan (QPP) – Mandatory employer contributions (2025 rate: 5.95% of pensionable earnings, matched by employee).
Workers’ Compensation – Mandatory coverage for workplace injuries.
Public Healthcare – Funded through general taxation; no direct employer obligation to provide health insurance.
Termination Notice / Severance –
Minimum 1–8 weeks’ notice (depending on service and province).
Federal law: Severance of 2 days’ pay per year of service, minimum 5 days, if employed 12+ months.
Common Employer-Provided Benefits in Canada
Since public health is covered, employer perks focus on supplementary benefits:
Extended Health Insurance – Covers dental, vision, prescription drugs, physiotherapy, and paramedical services not included in public healthcare.
Group Life & Disability Insurance – Short-term and long-term disability benefits, accidental death insurance.
Retirement Savings Plans – Employer contributions to RRSPs (Registered Retirement Savings Plans) or pension plans.
Bonuses & Profit-Sharing – Annual performance bonuses, commissions, stock grants.
Flexible / Hybrid Work – Remote work options, flexible schedules.
Wellness Programs – Gym memberships, wellness stipends, Employee Assistance Programs (EAPs).
Paid Sick Leave Beyond Minimum – Many employers extend coverage beyond statutory 3–5 days.
Professional Development – Tuition reimbursement, training budgets, certifications.
Commuter Benefits – Transit passes, parking subsidies, or company shuttles.
Meal Subsidies – Meal vouchers, canteen discounts, or lunch stipends.
Extra Paid Leave – For volunteering, birthdays, cultural/religious observances.
Stock Options / Equity Plans – Especially in tech, startups, and larger corporations.
Relocation Assistance – For moves between provinces or from abroad.
Childcare Benefits – Subsidies, emergency childcare support, or partnerships with childcare centers.