PEO & Employer of Record (EOR) in Canada
Expand Your Business With Our Canada PEO
GlobalPEO delivers a top tier employer of record service for clients that are looking to recruit, hire, and operate payroll services without first setting up their own subsidiary in Canada.
How it Works: Our Canada PEO hires your candidate while abiding by local labor laws and cultural customs. The newly hired employee will communicate directly with your company and perform all job functions as if they were your own employee. We act as your in-country HR department and handle the entire onboarding, payroll, and benefits process in strict accordance with Canada’s regulations.
Why Choose our Canada PEO?
Without needing to setup a local entity in Canada, companies save thousands when expanding with GlobalPEO. From $400 USD.
Scale and onboard your workforce in days, not months by using our local entities and experts in Canada.
Minimize risk by ensuring your company is compliant with local laws and cultural customs and protecting your business from potential fines and legal fees.
Streamlined process for managing your payroll, benefits, and HR responsibilities with full flexibility to make changes at any time.
Canada PEO & Employer of Record
Hire, onboard, and manage employees in Canada quickly and easily with GlobalPEO. Working with our Canada PEO and Employer of Record solution eliminates the headaches that come with establishing a foreign legal entity and guarantees full compliance with local regulations.
Local Employer of Record
Your employees based in Canada will sign a local employment contract with GlobalPEO's in-country entity. Labor contracts are available in English and French, with employee payments processed in the local Canadian Dollar currency. As the local Employer of Record, GlobalPEO operates with full compliance to the laws and regulations of Canada's Bureau of Labor.
Payroll Processing
GlobalPEO's complete payroll processing includes:
- New employee setup
- Social Insurance contributions
- Individual income tax declaration
- Expenses declaration
- Payslip provision
- Dedicated payroll officer
- Support for standard employment documents
Employee Onboarding
After officially hiring your local candidate, our Canada HR team will schedule an onboarding conference call with both the candidate and client. The onboarding process typically takes between 3-5 days.
Legal Liability Coverage
Our PEO solution covers the following functions to take legal liability as the local employer of record:
- Obligatory social and pension insurance enrollment.
-Employee income tax withholding
- Liabilities of early-termination, including severance calculation and mediation.
- Onsite health and safety liability coverage, which is shared with the client
Termination Guidelines
In the event a client decides to pause or end their presence in Canada when employing staff through our PEO and Employer of Records service, there are no termination fees to be paid as long as the client adheres to the 60 day termination-notice period.
#1 - Fast Facts For Hiring in Canada
Complex Hiring Laws
Because the concept of "at-will employment" doesn't exist in Canada, labor legislation makes it tricky to understand where federal laws end and provincial laws begin.
Understanding Provincial Regulations
Provinces in Canada operates independently from one another, so it's important to research and understand the specific rules on employment contracts, employee benefits, and tax withholdings.
The Rise of Group Benefit Plans
While Canada is known for having some of the world's best public health care, the majority of employees are persistent on their employer providing additional supplementary insurance. Group benefit plans include health, dental, disability, and life insurance policies.
#2 - Working Hours in Canada
Each Canadian province has its own set of restrictions on working hours. There are regulations present in each jurisdiction that provides exceptions to the rules set on maximum number of hours that are allowed to be worked per industry.
The majority of jurisdictions enforce an overtime rate of 150% of the employee’s standard salary. At this time, employers are not able to require employees to work overtime hours against their will. Employers do not have the right to refuse payment of the additional overtime rates if they ask their employees to work past the legal limit of standard hours.
#3 - Canadian Employment Contracts
While a written employment contract is not legally required in Canada, we strongly recommend completing a contract at the time of hire to have in the event of a future disagreement in relation to employee salary, benefits, or time off. Keep in mind that Canada is considered to be a bilingual country with some citizens speaking primarily English and others primarily French. Most Canadian contract agreements are completed in English. Of course, Quebec is the lone exception to this rule, where most employment contracts are drafted in French.
Employment contracts in Canada must clearly state the employees’ responsibilities, compensation details, benefits, grievance procedures, and requirements for termination. All offer letters, compensation details, and any document where employee income is discussed should be stated in Canadian Dollars.
GlobalPEO includes all these services along with everything else in the jurisdiction of international expansion in Canada through our Employer of Record service.
#4 - Canadian Holidays
Canada celebrates both Federal and Provincial public holidays. There are 4 Federal public holidays that are celebrated nationwide for which employees are given paid days off, and the remainder are Provincial public holidays:
Canada observes both National and Provincial public holidays. There are four National holidays where all Canadian employees receive paid leave. The remaining holidays are Provincial and are observed only in the province where they are celebrated.
National holidays include New Year’s Day, Canada Day, Labor Day, and Christmas Day.
Provincial holidays consist of Islander Day (PEI), Louis Riel Day (MB), Heritage Day (NS), Family Day (BC, AB, SK, ON, NB), Good Friday (BC, AB, SK, ON, NB, NL, NS), Easter Monday (QC), Victoria Day, Aboriginal Day (NWT), St. Jean Baptiste Day (QC), Civic Holiday (AB, BC, SK, ON, NB, NU), Thanksgiving (National aside from NB, NS, NL), Remembrance Day (National aside from MB, ON, QC, NS), and Boxing Day (ON).
#5 - Bonus Payments in Canada
While it is not required by law, many companies operating in Canada offer incentive-based bonuses to employees that are typically paid out at the end of fiscal quarters or fiscal years.
#6 - Health Insurance & Employment Benefits
Canada’s social security system provides all employees and residents with most essential healthcare services. Residents are equipped with a provincial Medicare card that gives them access to free healthcare in the jurisdiction of their province.
However, approximately two-thirds of Canadians have to pay extra for supplementary benefits such as dental care and prescription drug coverage. It is common for employees in Canada to negotiate and often expect their employer to provide them with private health insurance, as well as dental and vision plans, disability insurance, and life insurance.
#7 - Sick & Vacation Leave in Canada
Canada does not currently have a federal policy in place that provides guidelines for workers who require 5 or less days off of work due to illness or personal injury. It’s important to check with the local province where you have employees to see if there are specific regulations you are required to follow. Canada’s public health insurance does provide coverage for long term sick leave.
In terms of vacation leave, the majority of Canadian employers offer 2-4 weeks of paid vacation. Canada has laws preventing employers from giving employees vacation time that expires at the end of each year. Employees have the ability to negotiate carryover vacation leave with their employer before signing the employment agreement.
#8 - Maternity Leave in Canada
#9 - Termination & Severance in Canada
Both the company and the employee have the right to terminate the employment contract at anytime by providing an official written notice of at least 30 days time. Employers also have the right to provide payment in lieu of having the employee continue working through the final 30 days of their contract.
At the end of the employee’s contract, the employer must submit the final payment that includes prorated pay for their vacation, benefits, 13th month salary, bonuses, and overtime.
As mentioned before, all employers of Brazilian employees must contribute to a retirement savings fund called the “Fundo de Garantia por Tempo de Serviço,” which will be paid out to an employee if he or she is terminated without proper cause. Additionally, the employer is required to pay a fine of 50% of all money paid to the employee over the course of their contract. If the employee is terminated for good cause, the company is not liable to pay these penalties
#10 - Canada's Tax Laws
Canada’s social security system allows each individual province to make its own decisions regarding contribution rates. The federal government has nationwide laws governing unemployment insurance, old age security, and provincial social services. Canadian employees are responsible for contributing to the social security system through taxes automatically deducted from their pay on a monthly basis.
Canada operates within a progressive taxation rate system.
The highest federal tax rate for individual employees is currently 33%. Provincial tax rates are applied in addition to the federal tax rates.
Below are the tax rates per individual province.
Ontario’s top tax rate is 13.16%.
Quebec’s is 25.75%.
Alberta’s is 15%
Employer Payroll taxes contribute to the Canada Pension Plan and Employment Insurance. There are also childcare benefits that Canada makes available through the social security system, including the Universal Child Care Benefit, Child Tax Benefit, and Fitness Tax Credit.
A primary function of contributions to Canada’s national pension are the Old Age Social Security funds, which are dispersed to citizens and workers who are over the age of 65. Employees must be legal residents or citizens of Canada to receive this benefit.
Why Choose GlobalPEO?
Global expansion is a great step for your business – and now it’s easier than ever. Setting up your own entity in each country where you wish to operate can be expensive, complicated, and requires deep knowledge of the specific rules and regulations. Let GlobalPEO take care of everything. From International PEO & EOR, Global Payroll and International Recruiting we deliver our exceptional services at an affordable price.