Canada
Most of Canada is great big mountains, rivers beneath them, and forests that stretch on for thousands of miles. The rest? It’s home to some of the best remote talent in the world. On this page, we’ll teach you what you need to know if you’re hiring in Canada: Legal obligations, risks, and the easiest path to hiring people.
Country snapshot
CURRENCY
Canadian Dollar (CAD)
EMPLOYER TAXES
12.6%
PAYROLL FREQUENCY
Bi-Monthly/Monthly
OFFICIAL LANGUAGE
French, English
It’s the fastest way to hire globally
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It’s a lot cheaper
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
It’s more flexible for you & your team
Can be less risky than hiring employees
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
Some people want to be employees
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
You might not have as much control over your talent
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
Canada has relatively strict labor laws. Odds are, they’re stricter than the laws in your home country—and even if they aren’t stricter, they’re certainly different. Here’s what you’ll want to know before hiring remotely in Canada:
Hire talent as contractors
Hire talent as employees
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Canada than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Canada.
Employer tax
Employer Contributions
- 12.6%
Paid Time Off (PTO)
Employees that have been employed for less than 5 years are entitled to a minimum of 2 weeks’ paid leave, while employees who have worked over 5 years are entitled to 3 weeks.
Public Holidays
There are 9 public holidays in Ontario. More information can be found here.
Sick Days
Employees are entitled to 3 unpaid sick days a year if they have been employed for more than 2 weeks.
Maternity Leave
If the woman has been employed for at least 13 weeks, she is entitled to up to 17 weeks of unpaid maternity leave. Maternity leave can start any time starting 17 weeks before the due date.
Paternity Leave
Paternal leave falls under parental leave.
Parental Leave
At the end of the maternity leave, the mother is able to extend the leave with parental leave for up to 61 weeks of unpaid parental leave. Parental leave rights also extend to the father.
Termination Process
If an employee has been employed for at least 3 months, the employer is obligated to provide the employee with written notice of termination or termination pay.
Notice Period
The employee is obligated to give at least 2 weeks’ notice.
The length of the notice period that the employer is obliged to depends on how long the employee has been employed:
Length of employment Notice Period
Less than 1 year 1 week
1-3 years 2 weeks
3-4 years 3 weeks
4-5 years 4 weeks
5-6 years 5 weeks
6-7 years 6 weeks
7-8 years 7 weeks
8+ years 8 weeks
Severance Pay
In order for the employee to qualify for severance pay:
The employee must have completed at least 5 years of employment
The company has a payroll of over 2.5 million CAD per year or have terminated over 50 employees in the past 6 months due to all or part of the company closing
The severance pay amount is calculated by multiplying the weekly salary amount by the number of years the employee has been employed.
Probation Period
3 months
Working Hours
A full-time workweek is 40 hours.
Overtime
Overtime pay is paid for every hour after 44 hours weekly at a rate of at least 150% the regular pay. The maximum number of hours an employee can work is 48 hours a week unless agreed upon in writing by the employee and employer.
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