Hiring in Canada means complying with provincial employment law, not one national standard. Minimum wage, overtime thresholds, notice periods and holiday entitlement are all set provincially, so an Ontario contract is not a British Columbia contract. Payroll deductions are federal and provincial at once, including Canada Pension Plan and Employment Insurance contributions.
You can hire without setting up a Canadian entity by using an Employer of Record, which typically takes days rather than the months registration requires. Last updated September 2026.
| What varies by province | What is federal |
|---|
| Minimum wage | Income tax (alongside provincial) |
| Overtime threshold (40 or 44 hours, depending) | Canada Pension Plan contributions |
| Notice and severance on termination | Employment Insurance contributions |
| Statutory holidays and vacation entitlement | Rules for federally regulated industries |
Canada gives you a deep, skilled, often bilingual workforce, a stable economy and straightforward access to the US market. Toronto ranks fourth in North America for tech talent.
Immigration policy is also more workable than the US equivalent. There is no lottery, and routes for skilled workers are comparatively predictable.
The complication is that Canadian employment law is layered, and the layer that matters most is provincial.
Why does the province matter so much?
Because most of what governs the employment relationship is set there.
Minimum wage is provincial, and the rates differ. Current figures are in our minimum wage by country guide.
Overtime starts at different points. Some provinces require overtime pay after 40 hours a week, others after 44. Applying one rule nationally will either overpay or, more seriously, underpay.
Notice and severance depend on length of service, under provincial rules that differ in both formula and minimum.
Statutory holidays and vacation entitlement vary as well, including which days are observed.
The federal labour standards published by the Government of Canada apply to federally regulated industries such as banking, telecommunications and interprovincial transport. For everyone else, provincial standards govern.
What payroll deductions apply?
Federal and provincial income tax, plus two mandatory contribution schemes.
Canada Pension Plan. Employer and employee both contribute, at rates set federally, with Quebec running its own equivalent scheme.
Employment Insurance. Also shared between employer and employee, with the employer paying the larger share.
These are employer obligations, not deductions you simply pass on, so they form part of the real cost of a Canadian hire. Our employment cost calculator shows total cost rather than salary.
How do you hire in Canada without setting up an entity?
Through an Employer of Record. The EOR is the legal employer in Canada, issues a compliant provincial contract, runs payroll with the right deductions, and tracks changes to the rules as they happen.
You find the person and direct their work. We handle the employment.
The alternative is incorporating federally or provincially, which means registration, a local corporate bank account, accounting and ongoing filings. Worth it above a certain headcount, and unnecessary below it. The comparison is in EOR vs owned entity.
What does the process look like?
- You choose the person. Recruitment stays yours.
- We draft the contract to the standards of the province they work in.
- We onboard and register them for payroll, CPP, EI and any provincial requirements.
- We keep it current as provincial rules change, which they do.
Employment requirements for Canada and the other markets we operate in are in CountryPedia.
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See what clients say in our case studies, or talk to our team about which provinces you are hiring into.
Frequently asked questions
Do I need a Canadian entity to hire in Canada?
No. An Employer of Record employs the person on your behalf, handling the provincial employment contract, payroll, CPP and EI contributions and compliance. Setup usually takes days rather than the months incorporation requires.
When does overtime start in Canada?
It depends on the province. Some set the threshold at 40 hours a week, others at 44. There is no single national rule for provincially regulated employers, so the contract has to reflect where the person actually works.
What is the minimum wage in Canada?
There is no single national figure for most employers. Each province and territory sets its own rate, and they are reviewed on different schedules. Current rates are in our minimum wage by country guide.
What are CPP and EI?
The Canada Pension Plan and Employment Insurance. Both are mandatory contribution schemes shared between employer and employee, and both count as part of the employer's cost of employment rather than as deductions from salary alone. Quebec operates its own pension plan.
How much notice must I give a Canadian employee?
It depends on the province and the employee's length of service, with each province setting its own minimums. Contractual and common law entitlements can exceed the statutory minimum, so termination is worth taking advice on rather than applying a rule of thumb.
Is hiring in Canada easier than in the US?
In some respects. Immigration routes for skilled workers are more predictable, with no lottery. Employment law is arguably simpler in that there are ten provinces and three territories rather than fifty states, though the same principle applies: the sub-national jurisdiction governs, not the country.
