Guide to employment, payroll and benefits in

Canada

Rivermate offers complete payroll, benefits and compliance services for

Canada

01. Overview

Last updated: 

August 19, 2021

Currency
Canadian Dollar
Capital
Ottawa
Ease of doing business
79.6
Language
French
Population
37742154
GDP growth
3.05%

02. Grow your team in

Canada

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Canada

, particularly if you don't have established local relationships. You can hire employees in

Canada

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Canada is a North American nation. Its ten provinces and three territories stretch from the Atlantic to the Pacific, and northward into the Arctic Ocean, occupying 9.98 million square kilometers and making it the world's second-largest nation in terms of total territory. Its 8,891-kilometer southern and western boundary with the United States is the world's longest binational land border. Ottawa is the country's capital, and Toronto, Montreal, and Vancouver are its three main cities. For thousands of years, various Indigenous groups have lived in what is now Canada. British and French expeditions began exploring and settling along the Atlantic coast in the 16th century. In 1763, France ceded almost all of its colonies in North America as a result of numerous armed conflicts. Canada was founded as a federal dominion of four provinces in 1867, following the Confederation of three British North American colonies. This marked the start of the accretion of provinces and territories, as well as a gradual increase in autonomy from the United Kingdom. The Statute of Westminster of 1931 emphasized this growing sovereignty, which resulted in the Canada Act of 1982, which ended the last vestiges of legal reliance on the British Parliament. Canada is a Westminster-style parliamentary democracy and constitutional monarchy. The prime minister is named by the governor general, who represents the king, who acts as head of state, and retains office by virtue of their ability to command the confidence of the elected House of Commons. At the federal level, the nation is officially bilingual and is a Commonwealth realm. In international comparisons of government accountability, civil rights, quality of life, economic equality, and education, it ranks among the best. It is one of the world's most ethnically diverse and multicultural countries, having benefited from mass immigration from a variety of countries. The long-standing relationship between Canada and the United States has had a profound influence on the country's economy and culture. Canada is a highly industrialized nation with the seventeenth highest nominal per-capita income in the world and the sixteenth highest Human Development Index ranking. Its advanced economy is the world's tenth largest, owing to its plentiful natural resources and well-developed international trade networks. The United Nations, NATO, the G7, the Group of Ten, the G20, the United States–Mexico–Canada Agreement, the Commonwealth of Nations, the Organisation internationale de la Francophonie, the Asia-Pacific Economic Cooperation forum, and the Organization of American States are only a few of the main international and intergovernmental organizations or groups that Canada belongs to.

04. Public holidays

05. Types of leave

Paid time off

Public holidays

Sick days

Maternity leave

Paternity leave

Parental leave

Other leave

06. Employment termination

Termination process

In Canada, fixed-term work contracts are legal. However, courts and other adjudicators will find that a fixed-term employment contract is or became an indefinite term contract if the parties renew the same fixed-term contract several times or if the employee continues to work after the contract's stipulated expiration date. Employers in Canada are obligated to offer reasonable notice of termination or payment in lieu of notice to workers. Each jurisdiction's employment standards legislation specifies the minimum notice periods that businesses must offer employees depending on their term of service. Employees, however, are also entitled to a term of "reasonable" notice under common law and Quebec civil law, which typically surpasses the statutory minimum.

Notice period

Prior to ending employment, employers are obligated to offer employees with two weeks written notice. Employers may choose to compensate employees in lieu of notice with two weeks' pay. The notice period is waived if the employee has not worked for three consecutive months, resigns, is terminated for work-related misconduct, or is terminating a contract employment.

Severance pay

Severance pay is available to employees who have worked for their employer for at least one year. Employees with a minimum of 12 months of continuous service receive one week's salary for each year of service, up to a maximum of 26 weeks. However, the overall amount of severance pay is contingent upon a number of circumstances, including the employment agreement, any applicable collective bargaining agreements, and provincial regulations.

Probation period

It is common for probationary periods to be put in place within Canadian employment contracts. The typical probationary period is 3 months. The maximum probationary period allowed depends on the province and generally range from 3 to 6 months. It should be noted that if an employer terminates an employee within the probationary period, the employee may be entitled to notice pay.

07. Working hours

General

In Canada, the standard workweek is 40 hours, or eight hours per day, for five days. Each week, federally regulated employees are entitled to 24 hours of rest, which is typically on a Sunday. If a holiday falls on a weekday, the work week is shortened by eight hours. A week's maximum work hours for an employee is 48. This limit may be exceeded in some circumstances.

Overtime

While work hours and overtime regulations vary considerably across Canada, the majority of jurisdictions have established an overtime rate equal to 150 percent of an employee's regular rate of pay. The entitlement begins at 44 hours in Ontario and 40 hours in Quebec. Employers cannot refuse to pay overtime rates or compel employees to work excessive hours; they also cannot fire or deport employees who refuse or complain about overtime work.

08. Minimum wage

General

The current minimum wages across the provinces in Canada are as follows:


Alberta has a minimum hourly wage of USD 15.

British Columbia has a minimum hourly wage of USD 15.20.

Manitoba has a minimum hourly wage of USD 11.90.

New Brunswick has a minimum hourly wage of USD 11.75.

Newfoundland and Labrador has a minimum hourly wage of USD 12.50.

Northwest Territories has a minimum hourly wage of USD 13.46.

Nova Scotia has a minimum hourly wage of USD 12.95.

Nunavut has a minimum hourly wage of USD 16.00.

Ontario has a minimum hourly wage of USD 14.25.

Prince Edward Island has a minimum hourly wage of USD 13.00.

Quebec has a minimum hourly wage of USD 13.50.

Saskatchewan has a minimum hourly wage of USD 11.45.

Yukon has a minimum hourly wage of USD 13.85.

09. Employee benefits

General

The majority of healthcare benefits are provided by the social security system to workers and residents. Every citizen has a Medicare card, which entitles them to free healthcare in their province, as well as child care benefits. Some jurisdictions charge a separate fee for this system, while others fund it through taxation or contributions.

The Canadian health-care system was founded on the premise that all Canadians would get all "medically necessary and hospital physician services." Each of Canada's ten provinces and three territories funds and administers a statewide health insurance program. There is no cost-sharing for the federally mandated health-care services. While Canadians are guaranteed access to hospital and physician services, it is up to each province to decide whether or not to pay “supplementary” benefits such as dental care and prescription coverage.

To cover these treatments, around two-thirds of Canadians purchase private supplemental insurance policies (or have an employer-sponsored plan). In Canada, doctors are often reimbursed by the government at a negotiated fee-for-service rate. Many candidates today anticipate that the employer will provide extra benefits such as private health insurance, dental and vision plans, income security (disability), and life insurance.

Employers frequently provide additional health and dental insurance, as well as group savings schemes.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Canada

to hire a team takes time, money, and effort. The labor law in

Canada

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Canada

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Canada

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Canada

via our Employer of Record / PEO solution.

Ready to get started? Our friendly staff is ready to assist you with all your questions, let's connect.