🇨🇦 Hiring in
Canada
What every employer needs to know before hiring in Canada — contracts, payroll setup, social security, and HR compliance obligations.
Key Employment Facts — Canada
Minimum Wage
C$ 17.3
Annual Leave
10 days
Notice Period (min)
2 days
Probation Period (max)
3 days
Maternity Leave
15 weeks
13th Month Pay
Not required
How to Hire in Canada — Step by Step
Verify your hiring structure
Decide whether to hire via a local legal entity, a Professional Employer Organisation (PEO), or an Employer of Record (EOR). An EOR lets you hire in Canada without setting up a local company.
Issue a compliant employment contract
All employees in Canada must receive a written employment contract. It must cover job title, salary, working hours, notice period, and leave entitlements before or on the first day of employment.
Register for payroll and tax
You must register with the relevant Canada tax authority before making any salary payments. Payroll must be run in local currency and employer contributions must be filed on time.
Enrol in social security
Employers in Canada are required to enrol employees in the national social security scheme from day one. Both employer and employee contributions are mandatory.
Run compliant payroll
Pay must meet the statutory minimum wage, be paid on the agreed frequency, and include all mandatory deductions. Keep payslip records for the legally required retention period.
Understand termination rules
Notice periods, severance, and redundancy rules in Canada are governed by employment law. Always seek local legal advice before terminating an employment contract.
Contractor Classification Rules — Canada
How Canada distinguishes employees from independent contractors, and the risks of misclassification.
Classification Test
Multi-factor test — control, ownership, chance of profit/risk of loss, integration (Quebec civil law applies in Quebec)
Key Classification Factors
- ✓Degree of control over work performance
- ✓Ownership of tools and equipment
- ✓Chance of profit and risk of loss
- ✓Integration into the payer's business
- ✓Exclusivity of services
Misclassification Penalties
CRA reassessment for CPP, EI, and income tax withholding for up to 4 years. Penalties of 10% of amounts not withheld. Provincial penalties vary. Back-payment of employment standards entitlements.
Off-Payroll / IR35 Equivalent
Canada does not have an IR35-equivalent legislation, but CRA's worker classification rules serve a similar purpose — ensuring PAYG obligations are met.
Platform Worker Law
Ontario introduced the Digital Platform Workers' Rights Act 2022 (in force 2025) — minimum wage, transparency, and dispute resolution rights for gig workers on digital platforms.
Safe Harbour Criteria
Written service agreement, incorporation as professional corporation, GST/HST registration, own business insurance, multiple clients, own tools, ability to subcontract.
CRA applies a facts-and-circumstances test using Form RC4110. Quebec applies a different standard under the Civil Code. Federal workers (banking, telecom, transport) are governed by the Canada Labour Code. Ontario's Digital Platform Workers Rights Act 2022 is a landmark law requiring gig platforms to pay minimum wage, provide earnings transparency, and provide a dispute resolution mechanism.
Work Permits — Canada
Main visa and work permit routes for hiring foreign nationals in Canada.
Intra-Company Transfer (ICT)
Processing
14–30 days
Validity
36 months
Cost
Varies
Sponsor Needed
Yes
LMIA-exempt for multinational employees transferred to Canadian affiliate/subsidiary. Specialised Knowledge stream (12 months) or Executive/Senior Manager stream (36 months). Employer must demonstrate qualifying corporate relationship. CUSMA/USMCA covers US and Mexican nationals.
Official source ↗Employer-Specific Work Permit (LMIA-based)
Processing
60–120 days
Validity
24 months
Cost
CAD 1,000
Sponsor Needed
Yes
Requires Labour Market Impact Assessment (LMIA) from ESDC confirming no Canadian worker available. Employer pays CAD 1,000 LMIA fee. High-wage and low-wage streams have different requirements. Global Talent Stream (GTS) offers 2-week processing for tech roles. Tied to specific employer.
Official source ↗Express Entry — Federal Skilled Worker
Processing
60–180 days
Validity
Permanent
Cost
Varies
Sponsor Needed
No
Points-based permanent residence pathway via Comprehensive Ranking System (CRS). IELTS language test, skills assessment, and job offer (optional but adds points) required. Invitations issued in regular draws. Provincial Nominee Programs (PNPs) offer additional provincial pathways. Processing target: 6 months.
Official source ↗EOR Intelligence
Skip the entity setup — hire via EOR in Canada.
An Employer of Record handles all local compliance on your behalf.
This guide is for informational purposes only and does not constitute legal or HR advice. Employment law in Canada is subject to change. Always consult a qualified local employment lawyer before hiring.
About This Guide
- ✓ Sourced from official government publications
- ✓ Updated monthly — always current rules
- ✓ For guidance only — not legal advice
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