Hiring in the United States vs Canada, the decision matrix

1. Step 1

   Choose your market and model the cost

   Tell Teamed whether you're targeting US or Canada and share the salary offer. Teamed runs the employer-cost calculator: statutory contributions (FICA or CPP/EI), benefits market-standard, and EOR fee with FX shown against mid-market. You see the real USD cost before signing anything.

2. Step 2

   Issue the compliant employment contract

   For the US, Teamed issues a compliant offer letter and employment contract for the relevant state. For Canada, the contract is issued under the applicable provincial employment standards and common law. Onboarding documentation (W-4 or TD1) is handled end to end.

3. Step 3

   Run payroll from day one

   Payroll runs on the first pay cycle with all statutory deductions remitted: FICA and state taxes for US employees; CPP, EI, and provincial income tax for Canadian employees. Teamed files all employer remittances with the IRS, state agencies, or CRA. You get one invoice per employee per month with FX shown.

4. Step 4

   Monitor the crossover to your own entity

   Teamed models the month when your own US LLC or Canadian corporation gets cheaper than EOR (typically around 10 to 15 employees per country). It flags that crossover proactively and can set up the entity via Global Entity & Employment Operations (GEMO) on the same system with no re-onboarding of existing EOR employees.

Frequently asked questions

• Is it cheaper to hire in Canada than the US?+

  Yes, for most knowledge-work roles, but the saving is smaller than the headline CAD figure suggests. A $120,000 CAD software engineering role converts to roughly $88,000 USD at current Bank of Canada rates (CAD/USD ~0.73, June 2026). Comparable US roles in Toronto-equivalent markets (Austin, Raleigh, Denver) run $130,000 to $150,000 USD. The net saving is roughly $42,000 to $62,000 USD per employee per year before benefits. Add back Canadian common law termination liability (roughly 1 month per year of service) and US-side savings on health insurance (market-standard US health costs run $8,000 to $15,000 USD per employee per year vs $2,000 to $4,000 CAD for Canadian extended benefits), and the net Canadian saving for a three-year employee is closer to $25,000 to $45,000 USD per year. Real, but not the 30% the headline CAD rate implies.
• What is the notice period for terminating a Canadian employee?+

  Two tracks apply. First, provincial Employment Standards Act minimums: Ontario requires 1 week per year of service up to 8 weeks statutory notice (or pay in lieu). Second, common law reasonable notice, assessed case by case using the Bardal factors (character of employment, length of service, age, availability of similar employment). For most professional employees, common law notice runs roughly 1 month per year of service, significantly higher than the ESA minimum. A five-year mid-level professional can realistically claim four to six months of reasonable notice. You can contract out of common law notice with an enforceable termination clause in the employment contract, but that clause must be drafted carefully to comply with the ESA minimum or courts will void it. Teamed drafts all contracts with enforceable termination clauses as standard.
• Can I use an EOR to hire in both the US and Canada at the same time?+

  Yes. Teamed's EOR covers both markets on the same $599 per employee per month rate. You can run a mixed US-Canada team on one platform: different employment contracts, different statutory obligations, different payroll runs, one invoice per employee. FX is absorbed at zero markup for both. There's no requirement to set up entities in either country. The crossover calculator models when your US or Canadian headcount warrants considering your own entity in each market, independently. Teamed flags that point proactively for each country so you're never paying EOR fees past the crossover.
• How do US and Canadian non-competes compare?+

  US non-competes are broadly enforceable in most states with reasonable limits on scope, duration, and geography. They are prohibited outright in California, Oregon, Minnesota, and several other states. The FTC issued a rule banning most non-competes in 2024; that rule remains contested in federal courts as of June 2026. In Canada, courts apply a strict reasonableness test and generally treat full non-competes as difficult to enforce for most employees. Non-solicitation clauses (prohibiting poaching clients or colleagues) are typically more enforceable than full non-competes in both markets. For knowledge-work roles, the practical difference is meaningful: a US non-compete in a non-prohibited state gives you meaningful protection; a Canadian non-compete in the same industry gives you materially less.
• What are the employer payroll tax rates in the US vs Canada?+

  US (2025 IRS rates): Social Security 6.2% on the first $176,100 of wages per employee, plus Medicare 1.45% on all wages. Total FICA: 7.65%. FUTA adds 6% on the first $7,000 of wages per employee, typically 0.6% net after the state unemployment credit. Combined statutory payroll tax on a $100,000 USD salary: roughly $8,250 USD. Canada (2024 CRA rates): CPP employer contribution 5.95% on earnings between $3,500 (basic exemption) and $68,500 (YMPE). EI employer premium 2.324% on insurable earnings up to $63,200. Combined on an $80,000 CAD salary: roughly $5,900 CAD (approximately $4,300 USD at current FX). Both countries are in a similar range as a percentage of salary, but the absolute USD cost of Canadian statutory obligations is lower at current exchange rates.
• Does Canada have at-will employment like the US?+

  No. Canada does not have at-will employment. In all Canadian provinces, employees are entitled to statutory notice under the relevant Employment Standards Act plus common law reasonable notice on top. The US at-will doctrine (termination without cause or notice) applies only in US jurisdictions. In Canada, even a probationary employee who fails to meet standards during a valid probationary period has rights under provincial ESA. Teamed's Canadian contracts include a carefully drafted termination clause that sets the minimum obligations clearly and prevents the common law from implying a higher standard than intended.

• Is it better to hire in the US or Canada for a UK or EU tech company?+

  For most UK or EU tech companies making their first North American hire, Canada is operationally simpler and cheaper in USD terms. The CAD/USD rate of roughly 0.73 (Bank of Canada, June 2026) means a $120,000 CAD engineering role costs about $88,000 USD, 15 to 25% less than comparable US roles. Canadian common law notice is a real obligation (roughly 1 month per year of service), but Teamed includes an enforceable termination clause in every Canadian contract that limits that liability to the ESA minimum. For most knowledge-work roles, Toronto, Vancouver, and Waterloo have deep talent pools. The US is the right answer when the role requires physical US-market presence, US regulatory credentials, or a talent pool with no Canadian equivalent (some defence, aerospace, and research disciplines). Both markets are reachable on day one at the same Teamed EOR rate with no entity setup.
• What are the key employment law differences between the US and Canada?+

  Four differences matter most for employers. First, termination: US at-will employment in 49 states plus DC means no advance notice required; Canadian common law requires roughly one month per year of service of reasonable notice, substantially above provincial ESA statutory minimums. Second, benefits: the US has no universal healthcare, so market-standard private health insurance ($8,000 to $15,000 USD per employee per year) is effectively a mandatory benefit; Canada's provincial healthcare covers residents, so extended benefits cost $2,000 to $4,000 CAD. Third, non-competes: enforceable in most US states with reasonable limits, but generally difficult to enforce in Canada. Fourth, provincial and state variation: California adds mandatory meal and rest breaks and prohibits non-competes; Ontario and BC have different ESA overtime thresholds and parental leave rules; Quebec adds French-language obligations.