Introduction
Canada offers a dynamic business environment supported by a highly skilled workforce, world-class infrastructure, and strong ties to both U.S. and global markets. With competitive corporate tax rates, robust trade agreements, and a thriving innovation ecosystem, Canada is an attractive destination for companies looking to scale internationally. Its political stability and diverse economy further make it a strategic hub for long-term growth.
EOR & PEO Solutions in Canada
If you’re looking to hire employees in Canada without setting up a legal entity, using an Employer of Record (EOR) like Empleyo is the simplest and most compliant path forward. An EOR in Canada acts as the official legal employer on your behalf, managing everything from payroll and HR administration to employment contracts and statutory employee benefits.
This model allows you to expand into Canada quickly, while remaining fully compliant with local labor laws without the complexity or cost of registering a local entity.
What Is an Employer of Record in Canada?
An Employer of Record Canada (also known as an EOR provider) enables businesses to hire and onboard Canada employees without having to incorporate in-country. The EOR manages:
- Employment contracts in Canada
- Monthly payroll and tax filings
- Statutory benefits in Canada (like social insurance and leave)
- Ongoing HR and compliance responsibilities
What’s the Difference Between EOR and PEO?
A Professional Employer Organization (PEO) typically supports businesses that already have a registered entity in Canada, offering co-employment solutions for HR, payroll, and benefits. An EOR, however, is ideal when you don’t have a legal presence in Canada but still want to hire full-time staff.
Whether you choose an EOR or PEO depends on your Canada hiring strategy, budget, and long-term plans for the market.
Benefits of Using an EOR Service in Canada
- Hire employees in Canada faster, with no setup delays
- Stay compliant with Canadian labor and tax laws
- Avoid the cost of forming and maintaining a local entity
- Access local expertise in employment law and payroll in Canada
- Simplify HR management while maintaining control over your team
By using an EOR solution, companies can confidently build their team in Canada, access top talent in Canada, and stay focused on business growth — without getting tangled in bureaucracy.
Hiring in Canada
Canada is a thriving market with a growing pool of skilled professionals, making it an ideal destination for businesses looking to expand globally. But to hire in Canada successfully, it’s important to understand your options especially when you don’t have a legal entity in Canada.
That’s where using an Employer of Record in Canada makes all the difference.
Your Hiring Options in Canada
Businesses have two main paths to hire employees in Canada:
- Register a local entity, manage payroll and HR directly, and take on full legal responsibility.
- Use an Employer of Record (EOR) a third-party EOR provider that acts as the legal employer in Canada on your behalf.
The second option is faster, lower-risk, and ideal for companies that want to test the Canadian market, launch quickly, or hire remote employees without permanent infrastructure.
Why Use an EOR to Hire in Canada?
- Drafting and executing employment contracts in Canada
- Managing Canada payroll and mandatory contributions
- Handling employee benefits as required under Canadian labor law
Employment in Canada
Understanding how employment in Canada works is key to managing your team successfully and staying compliant. Whether you’re hiring directly or using an Employer of Record (EOR), companies must follow Canadian labor laws closely especially when it comes to employment contracts, payroll, and employee benefits.
That’s why many growing businesses choose to use an EOR in Canada to handle these responsibilities with confidence.
Employment Contracts in Canada
All employees in Canada must be hired under a written employment contract, clearly outlining the job role, salary, benefits, working hours, and duration of employment. Contracts must comply with the Labor Code of Canada, and are usually signed before or on the first day of work.
By working with a Canada employer of record, you can ensure that all employment contracts in Canada are properly structured, compliant, and aligned with local requirements without having to hire a full in-house HR team.
Payroll & Employer Contributions
Payroll in Canada involves more than just paying a monthly salary. Employers are required to withhold income tax and make contributions to:
- Canada Pension Plan (CPP)
- Employment Insurance (EI)
- Workers' Compensation
- Health and Social Insurance
These deductions and employer contributions are calculated based on the employee’s gross monthly salary, and must be submitted on time to remain compliant. An EOR in Canada handles this for you, managing all payroll, tax filings, and reporting on your behalf.
Employee Benefits and Leave
Canadian labor law mandates several employee benefits, including:
- Annual Paid Leave (Vacation)
- Sick Leave
- Maternity and Paternity Leave
- Parental Leave
- Paid Public Holidays
- Compassionate Care Leave
- Canada Pension Plan (CPP) / Quebec Pension Plan (QPP)
Using an employer of record service ensures your team in Canada receives all required benefits and that your business remains fully compliant with Canadian employment law.
Termination & Notice Periods
Visas & Permits in Canada
If you’re planning to hire employees in Canada or bring in foreign talent, understanding Canada’s visa and permit requirements is critical. Navigating these processes can be complex, but working with a trusted Employer of Record (EOR) in Canada makes it much easier.
An experienced EOR provider will ensure all permits are handled legally, so you can focus on building your team in Canada with confidence.
Work Permits for Foreign Employees in Canada
The process for foreign nationals to work is primarily managed by Immigration, Refugees and Citizenship Canada (IRCC), not a “Canadian Department of Labor.” The employer must typically obtain a Labour Market Impact Assessment (LMIA) from Employment and Social Development Canada (ESDC) to prove that no qualified Canadian citizen or permanent resident was available for the job. Only after a positive LMIA is issued can the foreign national apply for a work permit from IRCC.
Certain exemptions to the LMIA process exist, such as for those under specific international agreements (e.g., CUSMA) or those with highly specialized skills. The work permit is indeed tied to a specific job and employer (unless it is an open work permit) and is a mandatory step for most foreign workers.
Types of Visas for Foreign Talent
There are several types of visas used to work or do business in Canada, including:
- Temporary Resident Visas (TRV)
- Work Permits
- LMIA-Exempt Work Permits
- Start-up Visas
- Intra-Company Transferee (ICT) Visas
Each visa type has specific use cases, duration limits, and documentation requirements. If you’re looking to hire in Canada or send international staff temporarily, an EOR Canada solution helps you identify the right visa and manage the application process end-to-end.
Business Permits for Foreign Companies
To operate directly in Canada, foreign companies typically need to register a legal entity in Canada and apply for a business license. This can be a time-consuming process that includes office registration, investment approvals, and compliance with Canadian labor laws.
Alternatively, you can use an EOR in Canada to bypass the need for a local entity. The Canada employer of record is already registered and authorized to employ staff and manage payroll, contracts, and local compliance making it easier and faster to hire employees in Canada.
Why Visas & Permits Matter for Global Hiring
If you’re hiring foreign employees in Canada, or placing international staff in-country, it’s essential to stay compliant with immigration laws. The right employer of record service helps you:
- Avoid visa delays or permit denials
- Ensure alignment with Canadian employment law
- Quickly hire and onboard top talent without risk
- Operate legally, even without a registered entity in Canada
Common Questions on EOR in Canada
Yes, it is. The EOR model is a legal and common practice in Canada. The EOR company becomes the legal employer, ensuring compliance with all federal and provincial labor laws, tax regulations, and statutory requirements.
A Canadian EOR offers a full suite of employment services. This includes managing payroll, withholding and remitting income tax and mandatory contributions (CPP, EI), administering statutory benefits, drafting compliant employment contracts, and handling all local tax filings and reporting.
Onboarding is significantly faster with an EOR than establishing a new legal entity. For Canadian citizens or permanent residents, the process can often be completed in as little as a few days. For foreign nationals, the timeline is dependent on the processing time for their work permit application.
A compliant EOR must provide all statutory benefits, which vary by province. This includes vacation pay (a minimum of 4% of gross pay in most provinces), statutory holidays, and mandatory contributions to the Canada Pension Plan (CPP) and Employment Insurance (EI). The EOR must also adhere to provincial-specific rules for sick leave and other benefits.
Yes, an EOR in Canada can hire both Canadian citizens/permanent residents and foreign nationals. For foreign workers, the EOR assists in the complex process of obtaining the necessary work permits, including navigating the Labour Market Impact Assessment (LMIA) process when required.
