Countrypedia

Easily manage employment in

Canada

Make employment in Canada easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Canada, all in one easy-to-use platform.

Capital City

Ottawa

Currency

Canadian Dollar (CAD)

Employer Taxes

14%

Population size

111.91 million

Payroll Frequency

Bi-weekly

Services available in this country:

Employer of Record Services
Local Payroll Solutions

Overview:

Canada is the second-largest country in the world by land area, located in North America, stretching from the Atlantic Ocean in the east to the Pacific Ocean in the west and the Arctic Ocean to the north. Known for its vast wilderness, Canada has a diverse climate, with harsh winters in some areas and milder conditions along the coasts. The population is concentrated in urban areas like Toronto, Vancouver, Montreal, Calgary, and Ottawa. Canada shares land borders with the USA and maritime borders with Denmark (Greenland) and France (Saint Pierre and Miquelon).

Risks of misclassification

Canada, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Canada may lead to fines and penalties for the offending company.

Get Compliant Now

Hiring:

The Canadian economy is largely service-oriented, followed by natural resources, manufacturing, and technology. Major employment opportunities exist in cities like Toronto, Vancouver, Montreal, Calgary, and Ottawa, where demand for skilled labor is high. Graduates with relevant qualifications have strong chances of finding roles in industries like healthcare, IT, engineering, and finance.

Unemployment rates are lower for graduates than non-graduates, and they enjoy better outcomes in the labor market, including higher average salaries. Rural areas also offer opportunities, particularly in sectors like agriculture, forestry, and energy, where specific expertise is valued.

Recruitment:

Recruitment in Canada utilizes online platforms such as Indeed and Workopolis, alongside professional networking sites like LinkedIn. Companies also employ headhunting and staffing agencies to find qualified candidates for specialized roles. These approaches ensure a streamlined and effective hiring process across industries.

Interview:

In Canada, recruitment begins with identifying vacancies, advertising roles, screening applications, and shortlisting potential candidates. Interviews play a pivotal role in the process, as they help employers assess a candidate’s qualifications, interpersonal skills, and alignment with the company’s values. They are key to making the final hiring decision.

Application:

In Canada, CVs or resumes are key to the application process, as they provide a comprehensive overview of a candidate’s skills, experience, and qualifications. A well-crafted and tailored CV demonstrates professionalism and attention to detail, allowing employers to effectively screen and select qualified candidates for further evaluation.

Employment:

The standard parameters of employment in Canada:

Working Hours (Depend on the client’s company) – 8 hours a day, 40 hours a week, though this can vary by province and industry.

Probation Period (Depend on the client’s company) – Commonly 3 to 6 months, giving employers time to evaluate a new hire’s performance.

Payroll cycles– Pay cycles are typically bi-weekly or monthly, depending on company practices.

Official Deduction from Salary – Include income tax, Employment Insurance (EI), and Canada Pension Plan (CPP) contributions.

Typical work hours in Australia– 9 am to 5 pm, Monday to Friday, with a 30-60 minute lunch break.

Public Holidays– Vary by province, but national holidays include Canada Day, Christmas, and New Year’s Day.

Casual Leave/Sick Leave– Leave policies vary by province, with most granting 5 to 10 sick days annually, some of which may be paid.

Maternity & Paternity Leave – Mothers can take up to 15 weeks of paid maternity leave, followed by 40 weeks of shared parental leave (paid or unpaid), depending on provincial policies.

Earned Leave – Full-time employees typically receive 2 to 3 weeks of vacation annually, with more time granted based on years of service or company policy.

Payroll:

The payroll system in Canada involves precise calculations of gross and net income, with mandatory deductions for federal and provincial contributions.

Net Income = Gross Earnings – Federal & Provincial Taxes – CPP & EI Contributions

Important Elements of Salary Structure in Canada:

Salary Before Tax (Gross Income) – The total earnings before deductions, including salary, bonuses, and allowances.

Salary After Tax (Net Income) – The amount an employee takes home after deductions for income tax, Employment Insurance (EI), and Canada Pension Plan (CPP) contributions.

Total Tax Due – A combination of federal and provincial income taxes, EI premiums, and CPP contributions.

Payroll Cycle – Employers in Canada commonly use bi-weekly, semi-monthly, or monthly payroll cycles, depending on their policies.

13th Salary– There is no statutory provision for a 13th salary in Canada. However, bonuses may be offered voluntarily by employers.

Overtime– Employees are generally entitled to overtime pay at 1.5 times the regular hourly rate for hours worked beyond 40 hours a week or as defined by provincial legislation. Some provinces may have additional overtime regulations, especially for public holidays or weekends.

Business Setup:

Non-citizens aiming to establish a business in Canada must consider the following:

The type of visa or permit required.
The steps involved in registering a business in Canada.

1. Understand the visa process

The Immigration, Refugees and Citizenship Canada (IRCC) provides pathways for entrepreneurs to establish businesses.

Key steps in the process include:

Determine your eligibility under the Start-Up Visa Program or Provincial Nominee Programs (PNPs).
Prepare a business plan demonstrating the innovation and economic benefits of your venture.
Secure support from a designated organization such as a venture capital firm, angel investor, or business incubator.

2. Explore Visa Options

Start-Up Visa Program

Ideal for entrepreneurs with innovative business ideas that can compete globally.
Requires a letter of support from a designated organization and sufficient settlement funds.

3. Business Registration Process

Choose a business structure: Sole proprietorship, partnership, or corporation.
Register your business name and obtain a Business Number (BN) from the Canada Revenue Agency (CRA) for taxation.
Apply for permits or licenses depending on the province and business type.

4. Taxation and Compliance

Canada has a progressive tax system, and businesses must file taxes annually. GST/HST registration may be required, and employers must deduct income tax, CPP, and EI contributions for employees.