What do you need to know to hire in Canada?

Canada's employer cost load is lower than most European markets. CPP runs at 5.95% on pensionable earnings up to the annual maximum. Employment Insurance adds a further employer premium at 1.4 times the employee rate. There are no mandatory 13th-month payments under federal law, though some provincial collective agreements differ. Teamed's Canada fee sits inside the total cost envelope.

Teamed's Canada price is a starting rate, with zero FX in any currency pairing. No setup fees. No exit fees. Salaries, taxes, and contributions passed through at cost on every invoice.

The full breakdown, with worked examples at current 2026 rates, is in the cost guide.

Incorporating a federal corporation or a provincial company takes two to four weeks and comes with ongoing payroll, bookkeeping, and annual filing obligations across each province where employees work. An Employer of Record is faster and cheaper at low headcount. Teamed runs Canadian payroll, contracts, and CPP/EI compliance from day one.

The crossover point depends on Canadian salary levels, province, and your accounting costs. For most tech roles it lands around 5 to 8 employees. The EOR vs entity guide runs those numbers.

Most EOR providers will not tell you when you have crossed it. We do, and we help you move. You progress from contractor to EOR to your own Canadian entity on one platform under Teamed's Graduation Model, with tenure preserved.

The Canada Labour Code notice amendments (effective 1 February 2024) replaced the old two-week flat notice with a graduated scale. Employees with fewer than three consecutive months of service need no notice. From three months to under three years, notice is 2 weeks. It then rises one week per year of service from year three, reaching 8 weeks at eight or more years. This is a significant change from the pre-2024 rules many guides still describe.

Federal paid sick leave stands at 10 days per calendar year under the Canada Labour Code. Employees with 12 months of continuous service may file an unjust dismissal complaint before the Canada Industrial Relations Board, with reinstatement as a possible remedy. The hiring guide covers day-one obligations in detail.

Federal statutory vacation starts at 2 weeks after one year of service, rising to three weeks after five years under the Canada Labour Code. Canada counts vacation and public holidays separately. There are ten federal statutory general holidays under the Canada Labour Code, though the number varies slightly by province and year.

Paid medical leave of 10 days per year has been in force since December 2022. Maternity leave job protection runs up to 17 weeks for the birth parent. The second parent is entitled to 5 weeks of reserved use-it-or-lose-it parental EI benefits under the standard EI regime. Either parent may take up to 63 weeks of parental leave job protection. Employment Insurance funds maternity and parental benefits; the employer does not pay them directly. The benefits guide covers each entitlement and the employer obligations.

Canada's main employer payroll contributions are CPP at 5.95% and Employment Insurance at 1.4 times the employee EI rate. Both apply up to annual maximums. Payroll source deductions are due to the Receiver General by the 15 daysth of the following month for regular remitters.

Federal income tax is progressive. The rate starts at 14% on the first CAD 58,523 of taxable income, rises to 20.5% on the next band, and tops out at 33% on income above CAD 258,482. Employees also receive a non-refundable basic personal amount tax credit. Each province levies its own income tax on top of the federal rate. The tax and payroll guide sets out every band and threshold.

Federal notice under Canada Labour Code section 230 (as amended February 2024) gives no notice under three months, 2 weeks from three months to under three years, then one week per year of service to a maximum of 8 weeks. Severance pay under section 235 applies after 1 year of continuous service and is calculated at 2 days of regular wages per completed year of service.

Group terminations affecting 50 or more employees within a 28 days-day period trigger advance notice obligations to the Minister of Labour, with 16 weeks of notice required. Employees with 12 months of continuous service can file an unjust dismissal complaint rather than rely solely on civil damages. The termination guide covers each route in full.

The federal Labour Code is narrower than US buyers expect. It covers banking, telecoms, interprovincial transport, broadcasting, and a handful of other federally regulated industries. Most private-sector employees in Canada fall under provincial employment standards, which vary significantly. Quebec operates under a distinct civil law system. Teamed handles both federal and provincial compliance so you do not have to map the jurisdictions yourself.

The unjust dismissal remedy is reinstatement, not just damages. A federally regulated employee with 12 months of service can apply to have their dismissal adjudicated by the Canada Industrial Relations Board. The board can order the employer to reinstate the employee and pay lost wages. This is materially different from the US at-will standard. Build your onboarding, probation, and performance review process around the three-month and twelve-month thresholds.