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Country Hiring Guide: Canada

Everything you need to know to hire in Canada

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Key Facts to Hire in Canada


Ottawa

Capital


Canadian Dollar (CAD)

Currency


English and French

National language


39,138,000

Total population


1.78%

GDP growth


1.68%

Total country’s GDP world share


Bi-weekly, monthly

Payroll frequency


40 hours per week

Total working hours

Overview in Canada

Canada is a vast, diverse nation located in North America, bordered by the United States, the Atlantic and Pacific Oceans, and the Arctic. Known for its rich natural resources such as timber, oil, and minerals, Canada has a history shaped by indigenous cultures, European colonization, and subsequent independence from Britain in 1867. The nation’s political landscape has been influenced by its bilingual (English and French) heritage, with significant events such as the Quiet Revolution in Quebec and constitutional changes solidifying its multicultural identity.

Canada boasts a stable and high-income economy, though it faces challenges like regional disparities, aging population, and growing housing affordability issues. Its demographic composition includes a mix of ethnicities, with a large immigrant population contributing to its multicultural fabric. Rural and indigenous communities, while vital, face unique challenges related to access to education and employment opportunities. The workforce is increasingly urbanized, with manufacturing and agriculture playing a smaller role in the economy. Canada has one of the most diverse labor markets globally, including high levels of skilled labor and unskilled workers, especially in seasonal agricultural sectors.

Socioeconomically, Canada’s welfare system supports health, education, and social programs, but there are concerns about the inclusion of minority groups, particularly Indigenous populations, in the workforce. Political changes, especially in recent years, have focused on climate action, international trade, and managing immigration. Canadian workplace culture is largely hierarchical but values inclusivity and respect for individual autonomy. Communication tends to be direct, and relationships are key in fostering business success.

Employer of Record in Canada

Hightekers is a global Employer of Record service that helps you hire employees in Canada without the hassle of setting up a local entity. We handle all the legal and compliance matters as the official employer for your Canadian team, allowing you to concentrate on growing your business.

 

How does it work?

When you hire employees in Canada through Hightekers, we take on the role of the legal employer for your staff. This allows us to manage all employer responsibilities while you continue to oversee the daily operations and management of your employees. As the company, you oversee direct relationships with employees, assigning tasks and managing their performance. Hightekers handles local payroll, contracts, HR, benefits, and compliance matters.

Responsibilities of an Employer of Record

As an Employer of Record in Canada, Hightekers is responsible for creating and managing employment contracts, running the monthly payroll, providing local and global benefits, ensuring 100% local compliance, and providing local HR support.

Responsibilities of the company that hires the employee

As the company that hires the employee through the Employer of Record, you are responsible for the day-to-day management of the employee, work assignments, performance management, and training and development.

Group of freelancers working together

Taxes in Canada

Income Tax: In Canada, both employers and employees are subject to income tax. Employers must withhold federal and provincial taxes from employee wages based on the employee’s income and province of residence. The federal tax rate ranges from 15% to 33% depending on income brackets, and provinces levy additional taxes, varying by region. Employers are required to remit these taxes to the Canada Revenue Agency (CRA) regularly.

Corporate Income Tax: Canada has a federal corporate income tax rate of 15%, with provincial rates ranging from 11.5% to 16% depending on the region. Corporate tax is calculated based on taxable income, with allowable deductions for business expenses, including salaries, rent, utilities, and depreciation on assets.

Social Security Contributions: Employers and employees are both required to contribute to Canada’s social security system through the Canada Pension Plan (CPP) and Employment Insurance (EI). The CPP contribution rate is 5.95% for both employer and employee, while the EI rate is 1.58% (employee) and 2.21% (employer) on wages up to a certain limit.

GST/HST System: Canada has a Goods and Services Tax (GST) of 5%, which applies to most goods and services. Some provinces also levy a provincial sales tax (PST), while others have harmonized sales tax (HST), which combines GST and PST. Businesses must register for GST/HST if their taxable sales exceed CAD 30,000 annually.

Tax incentives: Canada offers several tax incentives for businesses, such as the Scientific Research and Experimental Development (SR&ED) tax credit and deductions for capital investments. These incentives are designed to encourage innovation and investment in Canadian businesses.

Other Taxes: Canada also imposes taxes such as customs duties, property taxes (which vary by province), and excise taxes on certain goods like alcohol and tobacco. Some regions also charge a carbon tax.

Hire locally in Canada by partnering with Hightekers

Leave in Canada

Leave patterns in Canada are regulated by both federal and provincial laws and vary depending on the type of leave. Below are the common types of leave observed in the country:

Annual leave (Vacation Leave): Employees are entitled to a minimum of 2 weeks of paid vacation per year, increasing to 3 weeks after 5 years of service. This leave is meant for rest and recreation.

Public holidays: Canada observes 9-10 public holidays annually, including New Year’s Day, Canada Day, and Thanksgiving. If employees work on these days, they are typically entitled to additional pay or a substitute day off.

Sick leave: While there is no mandatory federal sick leave, many employers offer paid or unpaid sick leave. Typically, employees can take several days off in case of illness, with some companies providing paid sick days.

Maternity/Paternity Leave: Mothers are entitled to up to 15 weeks of paid maternity leave and 35 weeks of parental leave, which can be shared between both parents. The paid portion is through Employment Insurance (EI).

Bereavement Leave: Employees are entitled to take paid or unpaid leave for a few days (usually 3-5 days) following the death of a close family member.

Compensatory Leave: Employees working overtime may accrue compensatory leave, typically taken as time off in lieu of overtime pay.

Canada also recognizes other specific leave types, including jury duty leave and leave for personal reasons, subject to individual company policies and provincial regulations.

Benefits in Canada

Canadian employers offer a variety of benefits to attract and retain top talent. While specific benefits can vary based on industry, company size, and provincial regulations, here’s a general overview:


Core Benefits:

  • Health Insurance: Many employers offer private health insurance plans to supplement government-funded healthcare. These plans often cover dental, vision, and prescription drug costs.
  • Retirement: Canadian employers are required to contribute to a registered pension plan (RPP) or a defined contribution pension plan (DCPP) for eligible employees.
  • Paid Time Off: Canadian employees are entitled to a minimum of 10 days of paid vacation per year, which increases with tenure.
    Sick leave and personal days are also common benefits.
  • Parental Leave: Both parents are entitled to a combination of maternity and parental leave. The specific entitlements and benefits vary by province and territory.
  • Disability Insurance: Many employers offer disability insurance, which provides income replacement in case of short-term or long-term disability.
  • Life Insurance: Many Life insurance is often offered as a benefit, especially for executive positions.

Additional Benefits:

  • Education and Training: Employers may offer tuition reimbursement, professional development programs, and other educational benefits to encourage employee growth.
  • Flexible Working Arrangements: Flexible work arrangements, such as remote work, flexible hours, and compressed workweeks, are becoming increasingly common in Canadian workplaces.

Workers Rights in Canada

In Canada, workers are protected by a comprehensive set of labor laws at both federal and provincial levels. Employment termination rights are governed by the Employment Standards Act, which ensures that employees are given notice or compensation if dismissed without cause. Anti-discrimination laws prohibit unfair treatment based on race, gender, religion, and other factors, under the Canadian Human Rights Act. Workers are entitled to a maximum of 40-48 work hours per week, with at least 24 hours of rest per week, in accordance with federal labor standards.

Wage and salary rights are safeguarded by minimum wage laws, which vary by province but are generally reviewed annually. Workers also receive paid leave, including annual vacation (at least 2 weeks), sick leave, maternity and parental leave, and bereavement leave. Occupational health and safety regulations are managed by provincial agencies, ensuring safe work environments through strict enforcement and worker protections. Social security benefits include the Canada Pension Plan (CPP) and Employment Insurance (EI), which provide financial support during unemployment, illness, or retirement.

Dispute resolution in Canada is facilitated by labor boards and tribunals, offering clear grievance procedures. Workers are free to join unions and engage in collective bargaining, which is a protected right. Canada also recognizes cultural and regional differences, with specific laws tailored to various provinces and industries, addressing diverse workforce needs. Recent reforms focus on enhancing protections for gig and part-time workers, ensuring a more inclusive and equitable labor market.

Agreements in Canada

In Canada, employment agreements vary depending on the nature of employment, but they generally fall into three categories: permanent full-time, permanent part-time, and fixed-term contracts. Permanent contracts are the most common, providing indefinite employment unless terminated by either party. Fixed-term contracts specify a set duration for employment, and part-time contracts define shorter working hours. All employment contracts in Canada must comply with federal and provincial labor laws, including the Employment Standards Act (ESA) and the Canadian Labour Code, which regulate minimum wage, working hours, and benefits.

Key terms and conditions in Canadian employment agreements typically cover job title, duties, salary, benefits, work schedule, and expectations regarding performance. Salary and compensation details, including any bonuses or commissions, must be explicitly stated. The agreement should outline the probation period, if applicable, and any additional benefits such as health insurance, retirement plans, or vacation days. Confidentiality clauses are commonly included to protect company secrets, while non-compete clauses may be added to prevent employees from working with competitors post-employment.

Termination clauses are critical, specifying the conditions under which either party can terminate the agreement. These clauses typically include notice periods and severance entitlements based on the length of employment. Dispute resolution processes, often involving mediation or arbitration, are commonly outlined to resolve conflicts. Amendments to the agreement must be mutually agreed upon by both parties, and any modifications should be documented in writing. Overall, Canadian employment agreements must adhere to the principles of fairness and transparency, ensuring legal compliance and protecting the rights of both employers and employees.

Hire locally in Canada by partnering with Hightekers

Remote Work in Canada

In Canada, remote work has become increasingly common, particularly since the COVID-19 pandemic, but it still requires careful attention to legal frameworks and employer responsibilities.

The legal framework for remote work in Canada involves a combination of federal and provincial laws, including the Employment Standards Act (ESA) and the Occupational Health and Safety Act (OHSA). These laws set guidelines for working hours, wages, and safety standards. For instance, employees working remotely are still entitled to the same work-hour limits as those working in physical offices, and employers must ensure a safe work environment, even at home. This includes addressing ergonomic concerns and ensuring proper health and safety measures are in place.

Employers must also ensure they meet privacy and data protection requirements when employees work remotely. They need to ensure secure communication channels, protect sensitive information, and comply with privacy laws like the Personal Information Protection and Electronic Documents Act (PIPEDA). Additionally, remote work agreements should clearly outline terms like compensation, working hours, and confidentiality clauses to prevent misunderstandings.

Lastly, cultural considerations in Canada include a focus on work-life balance. Employers are encouraged to offer flexible work arrangements to help employees manage both their professional and personal lives. However, tracking work hours remains crucial to avoid overwork and ensure compliance with legal requirements.

Working Hours in Canada

In Canada, the standard working hours are typically set at 8 hours per day or 40 hours per week, though these can vary by province, industry, and specific workplace agreements. For overtime, employees are generally entitled to 1.5 times their regular wage after working more than 8 hours a day or 40 hours a week. However, exceptions exist, especially for jobs requiring flexible hours, like emergency services or certain industries where the regulations may differ.

Employees also have the right to breaks during their working hours. A 30-minute break is mandated after 5 consecutive hours of work, and workers must receive at least 8 hours of rest between shifts. For night and weekend work, additional regulations apply to ensure workers’ safety and well-being, including enhanced rest period requirements for night shifts to prevent fatigue and stress.

Health and safety regulations are crucial in Canada, with the Canada Labour Code dictating that employers provide safe working environments and take steps to mitigate risks, such as through regular safety training and emergency protocols. There are also special provisions for specific sectors, including industries like transportation and healthcare, where the work environment and hours may differ from typical office settings. Additionally, employers must ensure compliance with safety equipment and health standards, particularly for industries with irregular working hours.

Salary in Canada

Factors Influencing Salaries: Salaries in Canada are influenced by factors like industry standards, geographic location, experience, and education. High-demand sectors like tech or healthcare tend to offer higher wages compared to others.

Resources for Researching Salaries: Websites like Glassdoor, Payscale, and government labor surveys provide up-to-date salary information by industry, job title, and location. These resources help employers and employees benchmark compensation.

Minimum Wage Regulations: Employees are entitled to paid sick leave, starting with full pay for the first nine days of absence, provided a medical certificate is submitted. After this period, sick pay is managed through Finland’s social security system.

Maternity/Paternity Leave: Each province and territory in Canada sets its own minimum wage, which ranges from approximately CAD 14 to CAD 16 per hour, depending on the region. It’s adjusted periodically based on inflation.

Employee Compensation: Compensation packages in Canada often include base salary, bonuses, benefits (healthcare, pension plans), and vacation days. Some employers also offer stock options or profit-sharing schemes.

Payroll Practices: Employees in Canada typically receive bi-weekly or monthly paychecks. Employers are required to deduct federal and provincial taxes, Canada Pension Plan (CPP), and Employment Insurance (EI) contributions before distributing wages.

Health and Safety Standards: Employers must adhere to strict occupational health and safety regulations under the Canada Labour Code. This includes ensuring a safe working environment and addressing workplace injuries and hazards.

Tax Considerations: Income taxes in Canada are progressive, with federal and provincial taxes deducted from salaries. Employees also contribute to CPP and EI. Employers must comply with tax remittance schedules to avoid penalties.

Special Considerations: Canada’s labor laws offer strong protections for workers, including rights to parental leave, vacation time, and protection against workplace discrimination. Some provinces provide additional benefits, such as paid sick leave.

Termination in Canada


Legal Basis

Employment termination in Canada is governed by the Canada Labour Code (for federally regulated employees) and provincial labor laws. It ensures protection against wrongful dismissal, requiring employers to follow due process when ending employment.


Notice Periods

  • For employees with more than 3 months of service, employers must provide a written notice or pay in lieu of notice.
  • Notice periods range from 1 week (for less than 1 year of employment) to 8 weeks (for 8 years or more of service). This varies based on the length of employment and jurisdiction.

Severance Pay

Employees may be entitled to severance pay if they have worked for the employer for at least 12 months. Severance pay is calculated based on the employee’s length of service and salary, typically one week’s pay for each year of employment.


Termination Procedures

Employers must provide proper documentation for termination, including reasons for dismissal (if applicable) and adhere to the appropriate notice or pay in lieu. They must also comply with any applicable collective bargaining agreements.


Employers Terminating Employees

In cases of termination, employers must comply with the legal requirements for notice and severance. Dismissal for cause (e.g., misconduct) can occur without notice but requires sufficient documentation of the cause.


Employees Resigning

Employees are typically required to provide notice before resigning, often 1-2 weeks, depending on their contract or position. Failure to provide adequate notice could result in forfeiting any outstanding benefits or pay.

Hire locally in Canada by partnering with Hightekers

Freelancing in Canada

Freelancing in Canada is regulated by both federal and provincial laws, which define the distinction between employees and independent contractors. Freelancers are considered self-employed, meaning they have the freedom to choose their working hours, clients, and working environment, though they are responsible for their own taxes and business expenses. Unlike employees, they do not receive employee benefits such as paid vacation, sick leave, or health insurance, and are not entitled to employment protections like wrongful dismissal claims.

Freelancers in Canada bear significant responsibilities, including managing their own taxes, filing as self-employed individuals, and maintaining appropriate business licenses where required. Contracts are crucial for freelancers, as they outline payment terms, deliverables, and intellectual property (IP) rights. Freelancers typically retain IP rights over their work unless specified otherwise in a contract, making clear agreements important. Furthermore, taxes are a key consideration for freelancers, who are required to file as self-employed individuals and may be subject to Goods and Services Tax (GST)/Harmonized Sales Tax (HST) based on their income level.

Freelancing is widely used in industries like technology, creative arts, and consulting in Canada. As the gig economy grows, freelancers play an integral role in the workforce, though they must be aware of their contractual obligations and ensure legal compliance.

Health and Safety in Canada

In Canada, occupational health and safety (OHS) is governed by a comprehensive legal framework that includes federal and provincial regulations. The main federal legislation is the Canada Labour Code, which outlines health and safety requirements for federally regulated industries. Each province has its own OHS laws, such as Ontario’s Occupational Health and Safety Act, which ensures workers’ safety and regulates employers’ responsibilities. Employers are required to maintain a safe work environment, identify potential hazards, conduct regular risk assessments, and provide necessary training and protective equipment to employees. They must also appoint a health and safety officer and establish health and safety committees in workplaces with a large number of employees.

Employees in Canada have the right to a safe working environment and are encouraged to participate in safety committees or report safety concerns without fear of retaliation. Workers also have the right to refuse unsafe work under specific conditions. Regulatory agencies, such as the Canadian Centre for Occupational Health and Safety (CCOHS), monitor compliance with these laws through regular inspections and investigations. Employers must report work-related accidents, and investigations are required to determine the cause and prevent recurrence. Supplementary guidelines, such as those from the National Institute for Occupational Safety and Health, provide additional recommendations for specific industries. Compliance with these regulations helps companies manage risks, ensure worker safety, and fulfill their social responsibilities.

Dispute Resolution in Canada


Legal Frameworks with respect to Labor Laws

In Canada, the legal framework governing labor disputes is largely defined by the Canada Labour Code at the federal level and various provincial labor laws, such as Ontario’s Labour Relations Act. These laws protect employees’ rights, establish rules for collective bargaining, and define acceptable practices for dispute resolution. Disputes typically arise from issues like wrongful termination, wage disputes, and workplace harassment.


Dispute Resolution Processes

The dispute resolution process in Canada often starts with informal resolution methods, such as internal mediation or discussions between the employer and employee. If unresolved, employees may seek assistance from governmental bodies such as the Labour Relations Board or Human Rights Commissions, which can facilitate mediation or adjudication. Arbitration is also commonly used in unionized environments.


Enforcement Mechanisms

Enforcement of labor laws is managed by government agencies like Employment and Social Development Canada (ESDC), which investigates complaints, ensures compliance with labor standards, and enforces penalties.


Challenges

Challenges include delays in resolving cases and the complexity of navigating different provincial regulations.


Whistleblower Protections

Whistleblower protections are robust, with employees allowed to report violations of labor laws without fear of retaliation, as protected under various legal frameworks like the Public Servants Disclosure Protection Act.


International Influence

Internationally, Canada’s labor laws are influenced by international labor standards, particularly those set by the International Labour Organization (ILO).


Compliance Monitoring

Compliance is monitored through regular audits and reports submitted to provincial and federal bodies.

Cultural Considerations in Canada

In Canada, workplace culture is characterized by a blend of inclusivity, openness, and respect for diversity. With its multicultural society, Canada’s work environments are generally inclusive and promote collaboration across different cultures. The employee culture is typically egalitarian, with an emphasis on teamwork, clear communication, and respect for individual differences.

 

Communication Styles

Communication in Canada is direct and respectful. Canadians value clarity and honesty but are also diplomatic, avoiding overly blunt language. In a professional context, it’s common to maintain a friendly tone, while staying professional. Written communication is formal, especially in the business environment, while face-to-face interactions are typically polite, focused on active listening and clear articulation.

Non-Verbal Communication

Non-verbal communication in Canada is important, with body language and eye contact playing key roles in demonstrating respect and attention. Canadians generally maintain appropriate personal space and avoid excessive gestures. A firm handshake is a standard greeting in business settings.

Negotiation Style

Negotiation in Canada tends to be collaborative, focusing on problem-solving and finding win-win outcomes. Canadians appreciate fairness and mutual respect, and negotiations may be conducted slowly, with plenty of time to discuss all aspects of the deal.

Employee Culture and Structure


Canadian work culture values work-life balance, flexibility, and equality. Hierarchies in organizations are usually flat, with leaders emphasizing collaboration over top-down control. Decision-making often involves input from multiple levels of staff.

Public Holidays and Work Schedules

Canada observes several public holidays, including national holidays like Canada Day (July 1) and Thanksgiving (second Monday in October). Work schedules are typically Monday to Friday, with standard office hours from 9 am to 5 pm. Many businesses also offer flexible work options.

Cultural consideration in Canada requires awareness of the multicultural nature of the workforce, understanding of diversity, and respect for individual cultural practices.

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