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EOR Lens
Canada · hiring guide

Employer of Record in Canada

How employment works in Canada through an Employer of Record: contributions, mandatory benefits, contracts, notice and termination.

What does it cost to hire in Canada?

In the existing illustrative Canada scenario, a C$83,148 CAD annual base salary produces an annual known employer-cost subtotal of C$87,720 CAD before EOR fees. That includes C$4,572 CAD of modelled employer contributions and statutory funds above salary. Add the provider’s platform fee and separately quoted charges; the platform fee alone is not the total cost of hiring. This salary is an example, not a market-pay benchmark.

This is a known subtotal, not a Canada-wide total. The model assumes employment outside Quebec. Provincial employer health and payroll taxes and workers’ compensation premiums are not fully costed; the work province and the employer’s total wage bill matter. Quebec uses its own pension and parental-insurance arrangements. These omitted charges are not counted as zero.

Calculate your hire and check the included charges

An Employer of Record (EOR) in Canada legally employs your hire on your behalf, so you can pay them compliantly without setting up a local entity. On top of gross salary, expect at least ~5.5% in the modelled scenario in quantified mandatory employer contributions (social security, healthcare, pension, payroll tax); the effective rate varies by salary band.

Salary is agreed in your billing currency and paid locally in CAD (C$). This page covers the employment rules: statutory contributions, mandatory benefits, notice and termination.

Want the numbers instead? Open the Canada EOR cost calculator and platform comparison.

A final total is not yet known: this subtotal depends on information that has not been supplied, and other employer-specific charges may remain unquantifiable even after the questions shown are answered. How to read these figures.

Canada employer cost at a glance

Employer statutory cost
About 5.5% of annual base salary in the displayed scenario, excluding the charges named below; this is a known subtotal, not a final cost
Employer contributions
Canada Pension Plan (base and enhanced) · Second additional CPP contribution (CPP2) · Employment Insurance (employer premium, outside Quebec) · Provincial employer health and payroll taxes · Workers' compensation premiums
Contribution ceiling
Applies
Mandatory additional pay
No
What this estimate includes
The employer costs we can calculate. Not included: Employment Insurance, employer premium at the reduced Québec rate, Québec Pension Plan, employer contribution, Québec parental insurance plan, employer premium, Quebec Pension Plan second additional contribution (QPP2), employer, Québec health services fund contribution, payroll above the upper threshold, Québec workforce skills development levy, Ontario employer health tax, above the exemption, British Columbia employer health tax, above the notch band, Manitoba health and post-secondary education levy, above the notch band, Newfoundland and Labrador health and post-secondary education tax, above the exemption, Workers' compensation premium (Ontario WSIB), Workers' compensation premium (provincial or territorial board), Work-injury insurance premium (Québec CNESST), Provincial employer health and payroll taxes, Workers' compensation premiums. It depends on facts not supplied here (the employer's total annual wage bill, employment work location), so the figure is a known subtotal.
Scope of this figure
  • Canada has no single national employer charge. Without a province the calculation must assume one, and 'outside Quebec' is the majority case; it also silently drops every provincial health tax, payroll levy and workers' compensation premium, which is why the honest result is a subtotal rather than a total.
Evidence depth
Charge-by-charge statutory evidence and sources shown below
Statutory evidence last verified
2026-09-07

Worked example: employing in Canada

For this C$83,148 CAD Canada example, EOR Lens can verify C$4,572 of employer cost on top of annual base salary, but Employment Insurance, employer premium at the reduced Québec rate, Québec Pension Plan, employer contribution, Québec parental insurance plan, employer premium, Quebec Pension Plan second additional contribution (QPP2), employer, Québec health services fund contribution, payroll above the upper threshold, Québec workforce skills development levy, Ontario employer health tax, above the exemption, British Columbia employer health tax, above the notch band, Manitoba health and post-secondary education levy, above the notch band, Newfoundland and Labrador health and post-secondary education tax, above the exemption, Workers' compensation premium (Ontario WSIB), Workers' compensation premium (provincial or territorial board), Work-injury insurance premium (Québec CNESST), Provincial employer health and payroll taxes, Workers' compensation premiums depends on facts not supplied here (the employer's total annual wage bill, employment work location), so the result is shown as a known subtotal.

Illustrative annual employer cost for one employee in Canada, in CAD
Annual base salaryC$83,148
Employer contributionsC$4,572
Known statutory employer costC$4,572
Annual known subtotalC$87,720

The salary is a fixed illustrative input used identically on every country page, not a market pay benchmark. 5 providers have verified availability in Canada. Statutory evidence last verified 2026-09-07.

TL;DR, Hiring in Canada

  • Fully-loaded employer cost: ~9–12% on top of gross (province-dependent)
  • CPP/QPP, EI, and provincial workers' comp are the three statutory employer contributions
  • Severance is province-specific; Ontario and federal jurisdiction are the highest
  • Quebec has its own pension (QPP), parental insurance (QPIP), and health tax (FSS), costlier than other provinces

Last reviewed:

Statutory employer costs in Canada

In Canada, employer contributions vary by province but typically total 9–12% on top of gross salary: CPP (Canada Pension Plan) employer match of 5.95% on pensionable earnings to the 2026 YMPE of $74,600, plus 4% CPP2 on the $74,600–$85,000 band; Employment Insurance (EI) employer share of 2.282% (1.4× employee rate) to the 2026 MIE of $68,900; and provincial WSIB/WCB rates of 0.5–3%. Quebec adds QPIP and the FSS health tax.

ContributionEmployer rateNotes
Canada Pension Plan (CPP), Tier 15.95%On earnings between $3,500 and $74,600 (YMPE 2026)
CPP2 (second tier, introduced 2024)4.0%On earnings between $74,600 and $85,000 (YAMPE 2026)
Employment Insurance (EI), employer2.32%1.4× employee rate (1.66%), capped at $63,200 earnings (2024)
Provincial WCB/WSIB0.5–3.0%Office workers in Ontario ~0.5%, construction much higher
EHT (Ontario Employer Health Tax)0.98–1.95%Only on Ontario payroll >$1M annually; below threshold = 0%
Quebec QPP / QPIP / FSS (Quebec only)+3–5%Quebec replaces CPP with QPP (6.4%); adds QPIP (0.692%) + FSS health services (1.65–4.26%)

Mandatory employee benefits

Beyond statutory contributions, Canada law requires the following benefits the employer must fund.

Vacation pay
2 weeks (4%) minimum federally; 3 weeks (6%) after 5–6 years (province-specific). Saskatchewan starts at 3 weeks.
Statutory holidays
9–10 paid public holidays per year (varies by province; Quebec adds St-Jean-Baptiste).
Parental leave
Federal EI covers 35–61 weeks of parental benefits; Quebec runs its own QPIP scheme (more generous, faster top-ups).
Sick leave
Federal jurisdiction: 10 days paid (2022 onwards). Most provinces: 3–5 days unpaid; BC and PEI offer 5 paid.

Termination, notice and severance

Probation

3 months in most provinces; 6 months federally. During probation, termination without notice is allowed for cause.

Notice period

Employment Standards Act minimums: 1 week after 3 months, scaling to 8 weeks after 8+ years. Common law notice (for non-union employees) is much higher: Bardal factors typically yield 1 month per year of service for executives.

Severance

Ontario: in addition to ESA notice, employers with $2.5M+ payroll owe 1 week per year of service (capped at 26 weeks) as severance pay under ESA s.64. Common-law claims by terminated executives often exceed ESA minimums substantially.

Common compliance pitfalls

  • Common-law notice vs ESA minimums, ESA is a floor, not a ceiling. A non-unionized 5-year-tenured executive may be entitled to 5–8 months of notice/pay under Bardal common-law factors, not the 5 weeks ESA specifies.
  • Quebec is its own employment-law jurisdiction. CPP doesn't apply (QPP does), EI is different (QPIP), the language of work must be French (Loi 96, 2022), and labor standards (CNESST) override federal norms.
  • CPP2 (the second-tier CPP introduced 2024) is often missed by foreign payroll providers. Adds ~$190 employer + employee combined for high earners.
  • Independent contractor classification: Canada Revenue Agency uses a multi-factor test (control, ownership of tools, chance of profit/loss, integration). Misclassification triggers back-CPP, back-EI, and CRA penalties.
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Frequently asked questions

In the existing illustrative Canada scenario, a C$83,148 CAD annual base salary produces an annual known employer-cost subtotal of C$87,720 CAD before EOR fees. That includes C$4,572 CAD of modelled employer contributions and statutory funds above salary. Add the provider’s platform fee and separately quoted charges; the platform fee alone is not the total cost of hiring. This salary is an example, not a market-pay benchmark. This is a known subtotal, not a Canada-wide total. The model assumes employment outside Quebec. Provincial employer health and payroll taxes and workers’ compensation premiums are not fully costed; the work province and the employer’s total wage bill matter. Quebec uses its own pension and parental-insurance arrangements. These omitted charges are not counted as zero.

Start with the annual salary and the province where the employee will work. Ask the EOR to identify the applicable pension and employment-insurance contributions, provincial payroll taxes and workers’ compensation premiums, using the employer’s payroll facts. Request benefits, the platform fee and any additional provider charges separately; a national percentage is not a complete quote.

Yes. Quebec uses QPP and QPIP rather than the same arrangements as other provinces, and provincial employer health taxes, payroll levies and workers’ compensation premiums vary. The illustrative calculation on this guide does not establish a complete total for a particular province. Use the charge-by-charge cost page and confirm the work location with the provider.

Quebec runs parallel programs to the federal CPP, EI, and provincial taxes: Quebec Pension Plan (6.4% vs CPP 5.95%), Quebec Parental Insurance Plan (0.692% employer), and the Fonds des services de santé (FSS, 1.65–4.26% of payroll). Net employer burden in Quebec is typically 13–16% vs 9–11% in Ontario.

ESA (Employment Standards Act) sets the statutory floor, typically 1 week per year of service. Common-law notice, available to non-unionized employees who sue for wrongful dismissal, is calculated using the Bardal factors (age, tenure, position, re-employment prospects) and typically yields 3–4× the ESA minimum. Most terminations settle in between.

Provincial health plans (OHIP, RAMQ, MSP) cover doctor visits and hospital stays. Supplemental insurance for dental, vision, prescriptions, and paramedical services is standard at $80–$200/month per employee. Most EORs offer this as an add-on; expected by candidates above entry level.

Yes, and it's the standard play to avoid registering a Canadian business number, opening a CRA payroll account, and dealing with provincial registrations. EOR is faster (5–10 days) and avoids permanent establishment risk for engineering and back-office roles.

Sources

Statutory rates and rules verified against the following authorities. We update this page when rates change.

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How this cost is calculated

Figures for Canada are calculated charge by charge from the published statutory rules, each with its own rate, ceiling and source shown below. Not included: Employment Insurance, employer premium at the reduced Québec rate, Québec Pension Plan, employer contribution, Québec parental insurance plan, employer premium, Quebec Pension Plan second additional contribution (QPP2), employer, Québec health services fund contribution, payroll above the upper threshold, Québec workforce skills development levy, Ontario employer health tax, above the exemption, British Columbia employer health tax, above the notch band, Manitoba health and post-secondary education levy, above the notch band, Newfoundland and Labrador health and post-secondary education tax, above the exemption, Workers' compensation premium (Ontario WSIB), Workers' compensation premium (provincial or territorial board), Work-injury insurance premium (Québec CNESST), Provincial employer health and payroll taxes, Workers' compensation premiums. It depends on facts not supplied here (the employer's total annual wage bill, employment work location), so the figure is a known subtotal. Scope: Canada has no single national employer charge. Without a province the calculation must assume one, and 'outside Quebec' is the majority case; it also silently drops every provincial health tax, payroll levy and workers' compensation premium, which is why the honest result is a subtotal rather than a total. Last checked against source on 2026-09-07.

Every statutory charge behind this rate, with its rate, ceiling, effective date and issuing authority, is set out on the Canada employer cost and evidence page.

Where to go next

Compare EOR providers that cover CanadaCompare Canada with other locationsSee how these figures are calculated

Keep going on Canada

Other Americas hiring markets we model

Same canonical region as Canada, ranked by hiring volume and comparable employer contribution levels.

Provider metadata (FX terms, deposit, entity ownership) and statutory tax brackets are sourced from public materials and official government publications. Provider headline pricing last re-verified 22 October 2026; statutory data last reviewed 28 August 2026; bundled fallback exchange rates dated 28 August 2026 (live rates are used when available). Some providers publish an FX method, timing rule or markup, while others do not. Provider-specific currency-conversion cost is excluded from every total and ranking rather than guessed; exclusion does not mean zero. Confirm conversion terms in writing with the provider before signing.