Canada, a G7 member country, has succeeded in building and maintaining an economic system with dual characteristics of consistent growth and long-term stability. With a high GDP per capita, low unemployment rates, and inclusive migration policies prioritizing the influx of highly skilled individuals, Canada is known to attract investors and hired professionals alike. The most attractive fields for international employees include IT, engineering, healthcare, and business management, and there is a vast demand for various research and development positions, as well as skilled trades.

This comprehensive guide to employment in Canada takes you through key steps of the immigration process, explains the particulars of the country’s tax system and employee benefits, and points out some of the important differences in labor law from province to province. You will also find out how to speed up and simplify relocation to Canada for work via the Employer of Record (EOR) service.

Employer of Record in Canada

Visa Requirements and Relocation Procedure for Foreign Professionals in Canada

The first thing to consider when hiring or being hired in Canada is the country’s bilingual nature: sufficient knowledge of English and/or French is essential. While written employment contracts are not mandatory, it is highly recommended to have one.

To become legally employed in Canada, foreign nationals require a Work Visa (Work Permit) that is issued for a specific time period and can be applied for only after getting an official job offer or contract from a Canadian employer. A Work Visa covers a wide range of jobs and qualifications, including seasonal work. For professionals who are not supported by a specific Canadian employer, but would like to enter the country to find a full-time job, there is The Federal Skilled Worker Program – a pathway granting express entry to candidates who meet a range of eligibility requirements (defined via a score system): education, an occupation that is accepted by the program, a minimum of 1 year of relevant work experience, proficiency in English and/or French, and proof of financial credibility.

Within the scope of the Federal Skilled Worker program, applicants are required to submit the following documents:

The review process takes up to 6 months upon submission. In case of success, the applicant receives a permanent residence permit and can relocate to Canada.

Candidates with a job offer already on hand may join the express entry pool outside of the aforementioned program and with slightly different eligibility criteria. 

The required documents include:

Terms of Employment in Canada

Salary, Working Hours, and Probation Period

It is typical for Canadian employers to pay out salaries bi-weekly, resulting in 26 pay periods per year. Alternatively, payments are made semi-monthly, often on set dates such as the 15th and the last day of each month, resulting in 24 pay periods per year. This practice of paying in arrears allows the employer to calculate the payroll more accurately depending on the actual hours/days worked and makes accounting easier. From an employee’s perspective, receiving the salary every other week or twice a month may be beneficial for managing individual budgets and meeting the deadlines for recurring bills such as rent and utilities.

As of October 2023, the federal minimum wage in Canada has been set at CA$ 16.65 per hour for general workers, but this rate only applies to industries regulated by the federal government. For other industries, provincial minimum wage applies, and the rate differs from province to province. The complete list of current and expected rates of provincial minimum wage can be found here.

Weekly working hours are another variable, but most provinces expect employees to cover 8 hours per day and up to 40 hours per week, with some exceptions such as Ontario where the weekly threshold is up to 48 hours. Rules of overtime payment are also established by provincial legislation, with most places accepting a 1 and 1/2 times the employee’s regular rate of pay as a formula for overtime rate.

The maximum probation period ranges from 3 to 6 months depending on the province.

Employee Benefits

Individuals working full-time in Canada are entitled to the federal minimum of 2 vacation weeks annually after 1 completed year of employment. After 5 consecutive years of employment, the minimum vacation period extends to 3 weeks annually, and after 10 consecutive years – to 4 weeks annually. The minimum vacation pay constitutes 4 to 8 percent of an employee’s gross annual salary, depending on the length of employment. In order to estimate the pay-out amount in each specific case, we recommended using the official Vacation Pay Calculator.

Women employed in Canada are entitled to up to 17 weeks of maternity leave that can be taken up to 13 weeks prior to the expected birth date and ends 17 weeks after the actual date of birth. While on leave, new mothers may be eligible for Employment Insurance (E.I.) maternity benefits that provide financial support during this period. After the maternity leave is over, a new mother may further take up to 63 weeks of parental leave with the possibility of splitting this period with her employed partner in turns or simultaneously.

Sick leave is generally unpaid in Canada, with the exception of serious health issues or injuries, in which case an employee receives 12 weeks of protected leave. In certain medical situations that require long-term absence, an employee may qualify for benefits under the Canada Pension Plan or Employment Insurance.

In 2024, there are 9 statutory public holidays in Canada observed nationwide with a few exceptions, and additional provincial public holidays. Statutory and provincial holiday pay is possible, but not guaranteed, and the conditions must be outlined in the employment contract.

Additional employee benefits may include healthcare and dental care coverage, retirement savings plans, guaranteed sick leave and/or public holiday pay, maternity and/or parental leave top-up, gym membership, and flexible work arrangements. All case-specific benefits are to be agreed upon before employment starts and must be stated in the contract.

Notice Period and Termination

In Canada, an employee who has spent more than 1 month but less than 2 years at their current workplace is entitled to at least 1 week’s notice from the employer. Over the 2-year threshold, each additional year of continuous employment will add another week to the notice, with a maximum possible notice period of 12 weeks. For example, an employee who has spent 4 years with their current employer is entitled to a 3-week notice.

An official written notice of termination must be provided by the employer at least 2 weeks prior to the termination date, and 2 weeks’ worth of wages at the employee’s regular rate must be paid out.

Employee and Employer Taxes

Following high inflation levels in 2022, the Canadian government updated the taxation policies and increased the federal income tax rates. The new rates vary from 15 to 33% depending on the amount of income, with 15% being a minimum rate for individuals earning less than CA$ 53,359 per year. On top of that, an employer has to cover a range of contributions per capita: Canada Pension Plan (CPP), Employment Insurance (EI), Employer Health Tax (EHT), and Worker Insurance. As of 2023, the rate of employer taxes comprises 6.4% in Quebec and 5.95% in the rest of the provinces.

To get an up-to-date and reliable calculation of your annual net income in Canada with deductions such as income tax, employee insurance, health insurance, and pension plan contributions, use a free Payroll Cost Estimator tool.

Good to Know: Provincial Employment Specifics in Figures

As revealed in the earlier sections, the precise working time for an individual employed in Canada, as well as related deductions and benefits, are shaped by both federal and provincial labor legislation. Here are a few facts reflecting the differences in employment specifics from province to province:

Conclusion

Canada’s excellent living standards as well as established economic and social security systems make it a first-choice destination for skilled professionals in a variety of sectors who are looking for lasting prospects in an English-speaking environment. If you are considering relocation for long-term employment, or representing a business that needs to relocate team members to Canada, opt for Employer of Record in Canada – reach out to Acvian for a fast, seamless, and compliant process with exceptional customer care at every step. Contact us by submitting your request or scheduling a meeting now.