The complete guide to hiring in Canada

Who sets the rules

Canada has fourteen employment-law jurisdictions: ten provinces, three territories and the federal jurisdiction. For roughly ninety-four percent of workers, employment standards are set provincially. Minimum wage, hours and overtime, vacation, statutory holidays, leaves and termination notice are all provincial matters, which means there is no single Canadian employment law and an Ontario contract is not compliant for an employee in British Columbia or Quebec.

Only about six percent of employees fall under the federal Canada Labour Code. The federally regulated sectors are banking, interprovincial and international transport by air, rail, road and marine, telecommunications and broadcasting, postal and courier services, and ports and marine shipping. If your business is outside those sectors, provincial rules govern your hire.

Province by province

These are the 2026 standards for the main hiring provinces. Several rates change during the year, commonly on April 1 or October 1, and all are re-verified before we issue a contract.

Overtime is paid at one and a half times the regular rate. British Columbia adds double time beyond twelve hours in a day. Note the outliers: Quebec reaches three weeks of vacation after only three years rather than five, and Saskatchewan starts at three weeks. Paid sick leave also varies sharply, from five paid days in British Columbia and two in Quebec down to unpaid job-protected leave in Alberta and Saskatchewan.

Payroll and contributions

Both employer and employee contribute to the national pension and unemployment schemes, and employees pay federal and provincial income tax withheld at source. These are the 2026 figures, all of which are indexed annually.

The employer rate for Employment Insurance is set at one and four tenths times the employee rate. On top of these, employers pay workers' compensation premiums, which are rated by industry classification and claims history, and employer health tax in provinces such as Ontario and British Columbia once payroll passes the exemption threshold. Taken together, employer statutory costs typically run about ten to fifteen percent above gross salary. The percentage falls for higher earners, because CPP and EI both cap out.

Operationally, income tax is withheld using the federal and provincial TD1 forms, remittances go to the CRA on a schedule set by employer size, T4 slips and the T4 Summary are due by the last day of February, and a Record of Employment must be issued whenever there is an interruption of earnings, within five calendar days of the end of that pay period when filing electronically.

Hiring in Quebec

Quebec is effectively a separate regime and cannot be run on a rest-of-Canada template. Four things differ.

Language. Under the Charter of the French Language, employment contracts and standard-form documents must be provided in French. An employee may agree to be bound by a version in another language only after the French version has been made available to them. Offers of employment, application forms and documents setting out conditions of employment or training must also be available in French.

Francization. Businesses with twenty-five or more employees in Quebec must register with the Office québécois de la langue française and obtain a francization certificate. That threshold dropped from fifty to twenty-five in June 2025. Businesses with one hundred or more must maintain a francization committee.

Social programmes. Quebec uses the Quebec Pension Plan instead of the Canada Pension Plan, at a higher rate, and the Quebec Parental Insurance Plan replaces the parental portion of Employment Insurance, which is why the Quebec EI rate is lower. CNESST is the combined body for labour standards, pay equity and workplace health and safety.

Filings. Quebec levies its own provincial income tax with separate deductions, and employers file RL-1 slips with Revenu Québec in addition to federal T4s, meaning two agencies and two year-end processes.

Benefits and healthcare

Provincial public healthcare covers physician and hospital services, but not prescription drugs for most working-age adults, nor dental, vision or paramedical care. Employees expect an employer-provided package covering extended health, dental, vision, prescription drugs, life insurance and short and long-term disability. A competitive package commonly costs in the region of three to eight thousand dollars per employee per year.

Group retirement saving is usually an RRSP with employer matching, most often in the range of three to five percent of salary. Note also that some provinces impose a waiting period of around three months before a newly arrived resident is covered by provincial health insurance, so interim private cover is often arranged. For temporary foreign workers hired under a Labour Market Impact Assessment, employer-paid private health coverage from the first day is mandatory and its cost cannot be deducted from the worker.

Contracts and enforceability

A Canadian employment contract should set out role, compensation, benefits, vacation, confidentiality and intellectual-property assignment, and a termination clause. Written contracts are strongly advisable; without one, the default position is far more generous to the employee.

Two points deserve attention. First, non-compete clauses are banned for most employees in Ontario for contracts entered into on or after 25 October 2021, with narrow exceptions for senior executives and sale-of-business situations. Non-solicitation clauses and confidentiality obligations remain enforceable. Second, misclassification is actively policed. The CRA and the courts look at control, ownership of tools, chance of profit and risk of loss. Canada also recognises a middle category, the dependent contractor, who is owed reasonable notice on termination despite not being an employee. Getting this wrong exposes you to retroactive CPP, EI and income tax, plus penalties and interest.

Termination and notice

This is the single most important thing for a foreign employer to understand, because the statutory minimums badly understate the real exposure.

Provincial employment standards set a floor. In Ontario, for example, statutory notice runs at one week per year of service to a maximum of eight weeks, with a separate statutory severance entitlement of one week per year up to twenty-six weeks that applies only where the employer's Ontario payroll exceeds $2.5 million or in a mass termination, and the employee has at least five years of service. Notice and severance are cumulative.

Above that floor sits common-law reasonable notice. Where an employment contract has no enforceable termination clause, courts award reasonable notice assessed on the employee's age, length of service, character of employment and the availability of comparable work. This is uncapped and regularly reaches many months, up to around twenty-four months of total compensation in the most generous cases. It is dramatically more than the statutory minimum.

A related risk is constructive dismissal, where a unilateral fundamental change to pay, duties or location is treated as a termination, entitling the employee to notice.

Work permits

Canadian work authorisation does not work the way sponsorship works in many other markets, and this is worth being blunt about. A work permit is tied to a specific named legal employer, and the employer named on a Labour Market Impact Assessment must be the genuine employer of the worker. There is no mechanism by which an Employer of Record simply attaches a permit to a client company.

The main routes are the Temporary Foreign Worker Program, which requires a Labour Market Impact Assessment with mandatory recruitment and a per-position government fee, and the International Mobility Program, which covers permit categories exempt from that assessment. Exempt categories include intra-company transferees moving from a related foreign entity, and professionals under the Canada-United States-Mexico Agreement, which is open to US and Mexican citizens in a defined list of occupations. The Global Talent Stream offers a much faster service standard for eligible in-demand roles.

Timelines vary enormously. An assessment-based hire commonly takes many months end to end, while some exempt categories move in weeks. Citizens, permanent residents and holders of an open work permit need nothing further and can be onboarded immediately.

Common pitfalls

• Applying one province's rules to an employee working in another
• Relying on a termination clause that does not survive scrutiny, exposing you to common-law notice
• Issuing an English-only contract to a Quebec employee
• Treating a full-time worker as a contractor, triggering retroactive CPP, EI and tax
• Assuming an EOR can sponsor a work permit the way it might elsewhere
• Budgeting only for salary and forgetting the ten to fifteen percent employer load
• Missing the Record of Employment deadline after a departure
• Expecting a US-style PEO co-employment arrangement, which Canada does not recognise

Frequently asked questions