Do you want to hire an employee in Canada without a permanent establishment but need a Canadian payroll?
IPS can help you hire and pay employees in Canada in compliance with the law, even without a Canadian branch or permanent establishment.
There are 2 ways you can hire someone in Canada without a permanent establishment:
- Employer of Record (Canada) – this is where your employee is employed directly by us and deployed to you full time. This is also known as Umbrella Company or employee leasing in Canada.
- Direct employment in your company but with payroll accounting according to Canadian law by registering your company as a foreign employer in Canada.
Both employment options offer their advantages and disadvantages. Contact us to find out which one suits your project better. We will be happy to advise you and find the best solution for your company.
IPS is your global payroll solution for a successful and fast international expansion without a permanent establishment.
Remote Work Full Time from Canada – Information for Hiring Employees in Canada
To ensure that you succeed in your first attempt abroad, IPS as your international payroll partner is here to assist you with the correct employment of your employees in Canada and the preparation of Canadian payroll in accordance with the laws of the country. Following is some information to help you understand the Canadian payroll system.
Health insurance is regulated at provincial level. The rate varies by province between 0.95 and 4.26% of gross salary, as the employer’s contribution.
Pension insurance is organized centrally. Employer and employee each contribute a percentage between 5,7% and 6,15% of gross salary.
Additionally, there is a worker’s comp insurance, unemployment insurance as well as other insurances depending on the province.
Thus, the non-wage costs for an employer differs, depending on the province, between 7 and 14%.
If you do not have an office in Canada, you will need a service like IPS to calculate and pay these additional employer costs correctly according to Canadian law. With international payroll in Canada from IPS, you can ensure that your employee is paid compliantly according to Canadian law.
International payroll services in Canada requires compliance with Canadian employment law.
As your international payroll service in Canada, we make sure you are equipped with the information you need.
Labour law in Canada is only roughly regulated by the state. The individual provinces have the power to act on the concrete interpretation. Therefore, labour law interpretations in the individual provinces are based on different legal regulations. However, labour protection, wage and working time regulations, dismissals and severance pay are generally regulated, as are more precise interpretations of the Canada Labour Code.
Sickness and the amount of paid time of depends on the rules of the province in which the employee lives. After 3 months of employment, an employee becomes eligible for sick leave.
Vacation and public holidays
There is a minimum holiday entitlement of two weeks, but this can also be increased to up to four weeks through regulations.
Depending on the province, the number of public holidays varies between six and ten days.
Probation is usually a minimum of 3 months.
Notice periods are regulated by law and range from 2 to 4 weeks per year of service, up to a maximum of 18 to 24 months. This is in line with established case law.
Severance pay can be mandatory depending on which province the employee lives in (for example Alberta and Ontario) and how many years the employee was with the company, what the company payroll amount is or how many employees the company has let go in the past 6 months.
As your international payroll company in Canada, we will ensure that you comply with the legal framework when giving notice.
Use our service to hire employees in Canada. We register you as an employer without you needing a branch office.
We take care of payroll, social security contributions and everything else. You will receive a simple invoice from us that includes everything.