Employer of Record (EOR) in Canada
Employer of Record (EOR) in Canada allows businesses to hire from a diverse and highly educated workforce without creating a local entity. Canada has a labor force of more than 21 million people, with strengths in technology, finance, healthcare, engineering, and natural resources. Its bilingual environment (English and French) and proximity to the U.S. market make it a strategic hub for global expansion. However, labor laws, taxation, and compliance requirements vary by province, creating complexity for foreign employers. By partnering with an EOR, companies can handle payroll, social security, benefits, and provincial compliance effectively, ensuring smooth hiring and risk-free operations in Canada.
About Canada
Canada is the second-largest country in the world by land area, with a population of approximately 40 million. It is a developed nation known for political stability, economic growth, and high living standards.
The country operates as a federation, with 10 provinces and 3 territories, each having its own employment regulations, tax rules, and leave entitlements. Canada’s economy is diverse, driven by industries such as information technology, energy, mining, healthcare, and financial services. Toronto, Vancouver, and Montreal are global business hubs, attracting multinational companies and foreign investment.
With two official languages, English and French, Canada offers a multilingual workforce skilled in international business communication. The nation also consistently ranks high in global competitiveness and ease of doing business, making it attractive for foreign companies seeking expansion into North America.
Employment Terms and Regulations
Types of Contracts:
Permanent, fixed-term, part-time, and temporary.
Working Hours:
Standard 40 hours per week; overtime applies after 8 hours/day or 40 hours/week depending on province.
Minimum Wage:
Varies by province, from CAD 14 to CAD 17 per hour (as of 2025).
Probation Period:
Typically 3–6 months, depending on province and contract.
Taxation and Contributions
Federal Income Tax: Progressive, 15%–33%.
Employer Contributions:
- Canada Pension Plan (CPP): 5.95% (up to annual maximum).
- Employment Insurance (EI): 2.32% (up to annual maximum).
- Provincial payroll taxes: Vary by province.
Types of Leave
Annual Leave:
Minimum 2 weeks per year (increases to 3–4 weeks with tenure).
Public Holidays:
9–12 per year depending on province.
Sick Leave:
Paid/unpaid sick leave depends on province; federal employees receive 10 paid days.
Parental Leave:
Up to 18 months, partially covered under Employment Insurance benefits.
Employee Benefits
- Health coverage (supplementary, as Canada has universal healthcare).
- Retirement savings (employer-sponsored pension plans).
- Life and disability insurance.
- Paid vacation and statutory holidays.
- Wellness and work-life balance programs.
Termination Process
Termination laws vary by province. Notice periods range from 1–8 weeks depending on length of service. Some provinces require severance pay in addition to notice. Employers must comply with anti-discrimination and just-cause rules.
Employer Taxes
Employer costs generally include CPP (5.95%), EI (2.32%), plus any applicable provincial payroll tax. In total, employer taxes typically range from 7%–12% of gross salary, depending on province and employee earnings.
EMPLOYER TAXES
7%–12% (Estimated)
FAQ's
How STM Manages Employment in India
Establishing an entity in every hiring location can be cost-prohibitive. STM simplifies the process by employing and paying your Indian talent on your behalf. We handle the intricate HR procedures and employment contracts in compliance with local laws. You can conveniently approve invoices through our platform. By partnering with an Employer of Record (EOR), you can efficiently and compliantly hire top talent globally.
Payment Processes for Indian Employees
We streamline payroll management for your Indian workforce. Employee hours, leaves, holidays, bonuses, and commissions are meticulously calculated. STM invoices you around the 15th of each month in your preferred currency, including US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), or Singapore Dollars (SGD). This ensures your Indian employees receive their salaries promptly in Indian Rupees (INR). Simplify further by consolidating your global team’s salaries into a single payment.
Full-time Employees vs. Global Contractors
Contractors engage with multiple companies and are self-employed, while full-time employees focus solely on their employer and receive additional benefits like health insurance, equity, and time off. While hiring international contractors can be cost-effective, it comes with misclassification risks. Partnering with an EOR for contractor onboarding and payments ensures compliant and timely compensation.
Reliable Employee Support
Our platform offers accessible support for employees and employers with inquiries about benefits, visas, and global employment in India. Utilize the chat function to connect with our expert team. Additionally, every STM client is assigned a dedicated account manager, serving as the primary contact for global HR assistance.
