Canada has a robust economic base, low taxes, abundant natural resources, and a stable political climate. These factors create an environment for international businesses to flourish. When it comes to ease of payment for small to medium-sized businesses, Canada has one of the lowest tax burdens among the G7 countries.
Canada's economy is also one of the most resilient in the world, with a GDP of $2.3 trillion as of 2023.
Hiring in Canada has become increasingly popular among foreign companies as the country offers a diverse and highly skilled labour force. This is due to its large number of higher education institutions and government initiatives, including upskilling support for sustainable technologies and programs for indigenous skills and employment training.
The Canadian job market is diverse and dynamic, with a mix of industries driving employment opportunities. Industries like technology, healthcare, finance, and professional services have shown steady growth, offering a range of positions from technical roles to administrative positions. Skilled trades, such as construction and manufacturing, also continue to be in demand due to ongoing infrastructure projects.
The country's commitment to innovation and clean energy is fostering growth in sectors like renewable energy and sustainable technology. Additionally, remote work options have become more prevalent, allowing companies to tap into local talent from different regions.
Overall, Canada's job market offers a mix of traditional and emerging opportunities across industries, with a focus on skills, adaptability, and innovation.
Our guide below provides a comprehensive overview of how to hire contractors and employees in Canada.
| Capital | Ottawa |
| Languages spoken | English, French |
| Population size | 38.93 million |
| Payroll frequency | Bi-weekly |
| Currency | Canadian Dollar (CAD) |
| VAT | 5% |
Employment laws in Canada require employers to calculate, withhold, remit, and report all employee and employer deductions. This includes tax and social security based on their employees’ salary and is split into Federal and Provincial taxes.
With the exception of Quebec, all provincial and territorial tax rates are calculated similarly to federal tax using Form 428.
According to the Canada Revenue Agency, the following are the provincial tax rates for 2024 (in addition to federal tax).
| Provinces and territories | Rates (CAD) |
|---|---|
|
British Columbia |
5.06% on the first $47,937 of taxable income 7.7% on the next $47,937 up to $95,875 10.5% on the next $95,875 up to $110,076 12.29% on the next $110,076 up to $133,664 14.7% on the next $133,664 up to $181,232 16.8% on the next $181,232 up to $252,752 20.5% on any taxable income exceeding $252,752 |
|
Alberta |
10% on the first $148,269 12% between $148,269 and $177,922 13% between $177,922 and $237,230 14% between $237,230 and $355,845 15% on the amount over $355,845 |
|
Saskatchewan |
10.5% on the first $52,057 of taxable income 12.5% between $52,057 and $148,734 14.5% on the amount over $148,734 |
|
Manitoba |
10.8% on the first $47,000 of taxable income 12.75% between $47,000 to $100,000 17.4% on the amount over $100,000 |
|
Ontario |
5.05% on the first $51,446 of taxable income 9.15% on the next $51,446 up to $102,894 11.16% on the next $102,894 up to $150,000 12.16% on the next $150,001 up to $220,000 13.16% on the amount over $220,000 |
|
Quebec |
14% on the first $51,780 of taxable income 19% between $51,780 and $103,545 24% between $103,545 and $126,000 25.75% on the amount over $126,000 |
|
New Brunswick |
9.4% on the first $49,958 of taxable income 14% between $49,958 and $99,916 16% between $99,916 and $185,064 19.5% on the amount over $185,064 |
|
Nova Scotia |
8.79% on the first $29,590 of taxable income 14.95% between $29,591 and $59,180 16.67% between $59,181 and $93,000 17.5% between $93,001 and $150,000 21% on the amount over $150,000 |
|
Prince Edward Island |
9.65% on the first $32,656 of taxable income 13.63% between $32,656 and $64,313 16.65% between $64,313 and $105,000 18% between $105,000 and $140,000 18.75% amount over $140,000 |
|
Newfoundland and Labrador |
8.7% on the first $43,198 of taxable income 14.5% between $43,198 and $86,395 15.8% between $86,395 and $154,244 17.3% between $154,244 and $215,943 19.8% between $215,943 and $275,870 20.8% between $275,870 and $551,739 21.3% between $551,739 and $1,103,478 21.8% over $1,103,478 |
|
Nunavut |
4% on the first $53,268 of taxable income 7% between $53,268 and $106,537 9% between $106,537 and $173,205 11.5% on the amount over $173,205 |
|
Yukon |
6.4% on the first $55,867 of taxable income 9% on the next $55,867 up to $111,733 10.9% between $111,733 and $173,205 12.8% between $173,205 and $500,000 15% on the amount over $500,000 |
|
Northwest Territories |
5.9% on the first $50,597 of taxable income 8.6% between $50,597 and $101,198 12.2% between $101,198 and $164,525 14.05% on the amount over $164,525 |
Canada’s Social Security tax includes both the Canada Pension Plan (CPP) and Employment Insurance (EI). The province of Quebec, however, has its own social security tax system that differs from the rest of Canada.
The CPP is a monthly taxable benefit that provides employees and their families with partial replacement of their income upon retirement, disability, or death.
Employers contribute to earnings that are between the basic exemption amount and the Year's Maximum Pensionable Earnings (YMPE). In 2024, the first earnings ceiling will be $68,500.
Contributions to CPP are compulsory for all working Canadians aged 18-70. In 2024, contributions to those earnings are 5.95% by employees.
If an employee earns more than the Year's Maximum Pensionable Earnings, their contributions and those by Western to CPP on their behalf will cease once the limit is reached each year.
The following January, CPP contributions will begin again. This means there will be an increase in the employee’s pay when CPP deductions cease during a year, and they may see a noticeable decrease in pay at the beginning of the following year when deductions begin again.
Non-residents working in Canada are required to make contributions. To be eligible to begin receiving CPP, the employee must be at least 60 years of age and have made at least one contribution to CPP. The amount of CPP they receive depends on their personal contribution history.
Canadians aged 65-70 AND in receipt of CPP benefits may elect to cease contributions by filing Form CPT30.
Employment Insurance (EI) provides workers with temporary income support during periods of unemployment or when they are required to take time off due to events such as pregnancy, caring for a newborn or newly adopted child, a critically ill or injured person, or a family member who is seriously ill with a significant risk of death.
Employers outside of Quebec contribute 2.21% of whilst those within Quebec contribute 1.58% of EI premiums.
Expanding a business to Canada involves understanding and adhering to various labour laws and regulations. Here are some key labour laws that employers should be aware of when expanding their business to Canada:
Each province in Canada has its own employment standards legislation that outlines minimum requirements for employment relationships. These standards cover areas such as hours of work, overtime pay, vacation entitlement, public holidays and termination notice.
Minimum wage rates vary by province and can change annually. Employers must ensure they pay their employees at least the minimum wage set by the applicable provincial legislation. You'll find out more about the minimum wage in Canada later on in this guide.
Employers must provide a safe and healthy work environment for their employees. This includes implementing safety policies, providing necessary training, and following regulations to prevent accidents and injuries.
It's advisable to have written employment contracts that outline the terms of employment, including job duties, compensation, working hours, benefits, and termination clauses. It's important to note that these factors will vary for contract vs. permanent roles.
As mentioned above, employers and employees contribute to the Employment Insurance program, which provides benefits to eligible employees who experience job loss or certain other life events.
Canada Pension Plan (CPP) and Employment Insurance (EI) Contributions: Employers must deduct CPP and EI contributions from employees' wages and contribute their own portion as well.
It's important to note that labour laws can vary by province, so it's recommended to consult with legal experts or government resources specific to the province in which you plan to expand your business.
Canada’s federal minimum wage is $17.30 per hour and applies to Canadians working in federally regulated sectors (banks, federal Crown corporations, postal services, etc.). The average salary in Canada is over $63,013.
The provincial minimum wage will apply if you work in an industry that the federal government does not regulate.
The table below illustrates Canada’s provincial minimum wage as of June 1, 2024.
| Province | Minimum hourly wage (CAD) | Date of effect |
|---|---|---|
|
British Columbia |
$17.40 |
June 1, 2024 |
|
Alberta |
$15.00 |
October 1, 2018 |
|
Saskatchewan |
$14.00 |
October 1, 2023 |
|
Manitoba |
$15.30 |
October 1, 2023 |
|
Ontario |
$16.55 |
October 1, 2024 |
|
Quebec |
$15.75 |
May 1, 2022 |
|
New Brunswick |
$15.30 |
April 1, 2024 |
|
Nova Scotia |
$15.20 |
April 1, 2024 |
|
Prince Edward Island |
$15.40 |
April 1, 2024 |
|
Newfoundland and Labrador |
$15.60 |
April 1, 2024 |
|
Nunavut |
$19.00 |
January 1, 2024 |
|
Yukon |
$17.59 |
April 1, 2024 |
|
Northwest Territories |
$16.50 |
September 1, 2024 |
The standard work week in Canada consists of eight hours a day and 40 hours per week. Employees are entitled to one full day of rest a week with additional breaks and a rest period on working days.
Any additional hours put in beyond the standard 40 hours of work per week is considered overtime.
These hours are eligible for overtime compensation of at least 1.5 times the regular hourly wage. Alternatively, the employee can claim time off with pay that is equivalent to 1.5 hours of time off for every overtime hour worked.
An employer may legally conduct a background check if they have a good reason for doing so. However, they must provide the applicant with clear notice that a criminal record check is part of the application process. They must also get the applicant’s permission before conducting the check.
Background checks involve personal information, so various laws are in effect to ensure candidates' privacy. Each province and territory has its own privacy laws.
Canadian companies that operate within a federally regulated industry, such as banks, airlines, or telecommunication companies, must comply with the Personal Information Protection and Electronic Documents Act (PIPEDA).
Personal Information Protection and Electronic Documents Act (PIPEDA) governs organizations engaged in commercial activity and applies when personal data crosses provincial boundaries or internationally. Personal data includes any factual or subjective information that is recorded. This includes names, ages, IDs, education levels, incomes, social statuses, disciplinary action histories, employment files, financial records, and health histories.
Annual leave in Canada is determined by provincial law, but employees typically receive a minimum of nine days depending on the province they’re based in and the length of their tenure.
Pregnant employees are entitled to up to 17 weeks of unpaid time off. In some cases, this period can be extended. Employers are not obligated to pay employees during this time however the employee can make specific claims via their Employment Insurance, and employers have the option to top up these payments.
In the case of a stillbirth or miscarriage, an employee is allowed to take up to 12 weeks of unpaid maternity leave.
The Canadian government allows new parents to take unpaid time off when a baby or child is born or comes into their care. Birth mothers who have taken maternity leave are entitled to up to 35 weeks of leave, while those who did not take maternity leave can take up to 37 weeks of parental leave.
Birth mothers are entitled to take both parental and maternity leave as both are considered different categories of leave entitlements. As the right to parental leave is independent of the right to pregnancy leave, a birth father can, for example, be on parental leave while the birth mother Is on either maternity or parental leave.
While on leave, both parents can apply for parental benefits and continue to earn credit for length of employment, service, or seniority. In most cases, an employee must be given their old job back upon returning from pregnancy or parental leave.
There are no statutory allowances for sick days taken in Canada. However, the Canada Labour Code provides leave for illness or injury as well as work-related illness or injury.
Employees that have completed three months of continuous employment with the same employee are entitled to sick leave protection not exceeding 17 weeks. In general, the code is designed to protect employees against dismissal, lay-off, suspension, demotion, or discipline because of absence due to illness or injury.
On the 20th of May 2021, Canada’s Employment Standards Amendment Act legislated that employees of British Columbia can now receive up to three days of paid leave for any COVID-19-related illness.
For employers that don’t currently have a sick-leave program, the British Columbia government will reimburse them up to 200 CAD per day per worker on sick leave. This program is administered by WorkSafeBC through an online application for employers registered for WorkSafeBC coverage.
Also known as Statutory holidays, public holidays in Canada are observed on a federal and provincial level. There are currently five nationwide statutory holidays followed by an additional six holidays for federal employees. Each of Canada’s 13 provinces and territories also celebrates a multitude of different holidays.
Nationwide statutory holidays
Federal statutory holidays
Businesses around the world have seen tumultuous times due to the uncertainty brought on by the pandemic. In the last two years, values have changed as the Canadian workforce rebuilds its foundation and employees reassess their motivations when it comes to their career plans. This alters the way in which companies approach employee retention.
Work-life balance, for example, now surpasses salary, according to new research by ADP Canada and Maru Public Opinion. 31% of Canadian employers say that a job that encourages work-life balance is of greater importance to them now, while 39% say that work-life balance is more important now compared to before the pandemic.
This shift in priorities and many others are majorly impacting how businesses recruit new talent. To successfully attract and retain employees, employers must recognise and respect the relationship between work and their employees’ personal lives. Both are intertwined, and employees that feel their jobs give them the space to show up in their personal lives are more likely to stay and grow with their current companies.
Apart from the above, Canadian employees now also gravitate towards:
Whether it’s how their working hours are organised or where they work, Canadian employees see flexibility as a key motivator when deciding to join or stay with a company.
PwC found that only one in five Canadian employees are eager to return to the in-office model of yesteryear. In Quebec, 40% of workers claim that their ideal model is one that allows them to be either fully or partially remote.
Employees today are more discerning of their leaders and place greater emphasis on self-security. Letting information flow freely fosters trust and bridges the gap between communication and collaboration.
Leadership teams that are honest about their strategy, goals, and challenges not only create space for employees to feel as if they’re part of the decision-making process but also show them that you respect them enough to share your vision and intentions.
Finding joy in the work they perform is the lifeblood of employee engagement, and according to a survey by ServiceNow, 88% of Canadian employees want their work to be more meaningful.
Employees want to be involved in work that provides them with both personal and professional growth; however, many feel that 30% of their time is spent performing menial tasks that get in the way of purposeful work.
One of the ways companies can overcome this is to invest in technology that can help to reduce low-value work and free up time for employees to focus on the more fulfilling aspects of their job. And 67% of employees feel that this is the way to go.
In addition to the labour laws and regulations mentioned earlier, employees in Canada have various rights that are protected by both federal and provincial laws. Here are some important employee rights in Canada:
Employees have the right to be treated fairly and without discrimination based on factors such as race, gender, religion, age, disability, and more. This includes equal pay for equal work.
Employees have the right to work in an environment that is free from hazards and risks to their health and safety. Employers are responsible for implementing safety measures and providing training to prevent workplace accidents and injuries.
Employees have the right to be paid at least the minimum wage set by the applicable provincial legislation. They are also entitled to timely and accurate payment of wages, including overtime pay when applicable.
When terminated without cause, employees generally have the right to receive notice or pay in lieu of notice, also known as severance pay. The amount of notice or severance pay depends on factors such as length of service and the applicable employment standards legislation.
Employees have the right to various types of leaves, including maternity and parental leave, sick leave, family emergency leave, and bereavement leave. These leaves are designed to accommodate personal and family-related needs.
Employees have the right to join or form a union to collectively bargain and negotiate employment terms and conditions. Unionised employees also have the right to strike under certain conditions.
Employees have the right to raise concerns about workplace conditions, safety, or other matters without facing retaliation from their employers.
These employee rights help ensure that Canadian workers are treated fairly and with respect in the workplace. Please note that employee rights and their associated legislations may vary according to the province you are expanding to.
When expanding a business to Canada, implementing effective hiring practices is essential to build a strong and compliant workforce. Here are some hiring best practices to consider around how to employ people in Canada:
Familiarise yourself with the labour laws and regulations specific to the province where you're expanding. As mentioned above, each province has its own employment standards and regulations that you need to adhere to.
Develop detailed job descriptions that clearly outline the responsibilities, qualifications, and expectations for each position you're hiring for. This helps attract candidates who are a good fit for the role, as well as passive candidates who might not be actively looking for a role, but could be swayed by the right job postings.
Ensure that your hiring process is fair and free from discrimination. Avoid asking inappropriate questions during interviews and base hiring decisions solely on the candidate's qualifications and abilities.
Develop a structured interview process that includes a set of standardised questions for each candidate. This helps ensure consistency and fairness in evaluating candidates.
Consider how well candidates align with your company's values and culture. A good cultural fit can lead to higher job satisfaction and productivity.
Before hiring staff, verify that candidates are eligible to work in Canada. This typically involves checking their work permits, immigration status, and related documentation.
Conduct background checks as needed, which might include criminal record checks, reference checks, and credential verifications. It's also useful to conduct reference checks to get an insight into the candidate's work ethic and job history.
Research prevailing wages and compensation rates in the local market to ensure your offers are competitive and attractive to potential hires.
Draft comprehensive employment contracts that outline terms and conditions of employment, including job duties, compensation, benefits, and termination clauses.
Consider offering benefits and perks that are commonly provided in the Canadian job market, such as health insurance, retirement plans, flexible work arrangements, and professional development opportunities.
Respect candidate privacy and comply with privacy laws when collecting, using, and storing candidate information.
Maintain clear and open communication with candidates throughout the hiring process. Inform them about the timeline, next steps, and any relevant details.
Once hired, provide a thorough orientation and onboarding process to help new employees integrate into the company culture and understand their roles.
Provide ongoing training and development opportunities to help employees enhance their skills and contribute effectively to the organisation.
Prioritise diversity and inclusion in your hiring practices to create a diverse workforce that brings a variety of perspectives to your business.
Given the complexity of Canadian labor laws, consider consulting with legal experts or HR professionals to ensure your hiring practices are fully compliant.
By following these best practices, you can build a strong and productive workforce as you expand your business to Canada, while also ensuring that you're in compliance with local laws and regulations.
When onboarding employees after expanding to Canada, a well-structured process is key. During orientation, introduce them to the company's history, structure, and policies, including those for conduct, health and safety, and reporting. Clarify their role and performance expectations, providing job-specific training and highlighting opportunities for growth.
Cover compensation, benefits, and workplace tools, and emphasise the company's values and culture. Discuss workplace policies, dress code, and communication norms. Ensure they understand health and safety procedures and offer chances to integrate socially with colleagues.
Handle paperwork, contracts, and tax forms, and provide access to company resources like handbooks and intranet portals. Schedule regular check-ins to address questions and offer ongoing support. A thoughtful onboarding process helps new employees feel welcome, informed, and ready to contribute effectively to your business.
A two-week notice period is the norm in Canada, and the employer is required to provide the employee with written notice of their intention to terminate the employment. In lieu of that, the employer must pay the employee two weeks' wages at the regular rate.
The above applies to any employee being terminated except for the following reasons:
In most cases, the standard probationary period in Canada is three months. All employees who have completed a minimum of 12 months of continuous employment with an employer are entitled to severance pay. This is calculated as two days' pay at the employee’s regular rate of wages for each full year of employment, with a minimum of five days’ pay.
The employer is obligated to provide the employee with severance pay under all circumstances except when:
Canada has a diverse and highly educated population. We're here to assist you in finding the best candidates for your company.
Regardless of whether you're looking to hire locally for an immediate project or need to fill a vacancy in your organisation, our talent acquisition resources and extensive talent database ensure that we can connect you with the right talent for your business requirements.
We provide contract hiring services for companies that require temporary employees to fill specific roles. If you're looking for people who can grow with your business, we offer professional recruitment services that help you find them.
Hire a Canadian team without establishing a local business entity. Working with an Employer of Record in Canada lets you speed up the hiring process by carrying out remote hiring. Once your Canadian employee is approved, we handle everything from the onboarding process and benefits administration to calculating payroll contributions and taxes.
Although the information provided has been produced from sources believed to be reliable, Airswift makes no warranties, whether express or implied, regarding the accuracy, adequacy, completeness, legality, or reliability of any information herein. Accordingly, there shall be no liability attached to the use of the information herein, howsoever arising. For the latest information and specific queries regarding particular cases, please contact our team.