Hiring in Canada: costs, rules and the best EOR providers

Ontario temporary help agencies must hold a licence under the provincial licensing regime. The legal entity employing the worker must be checked, and clients must not knowingly use an unlicensed agency.

The EOR must apply the employment standards governing the actual job, not a single Canada-wide contract. Most ordinary private-sector jobs follow provincial rules; federally regulated industries are an exception.

Ontario and British Columbia have their own employment standards laws, while Quebec applies its labour standards and language rules. Even vacation differs: Ontario reaches three weeks after five years; Quebec after three. Confirm the work province before contracting or relocating.

Canadian payroll normally deducts employee pension contributions, Employment Insurance and federal plus applicable provincial income tax. The employer also pays its own contributions: those are not employee deductions.

Quebec uses QPP and has separate provincial payroll arrangements. The EOR needs the correct province of employment, pay frequency and employee tax declarations; a single flat Canadian deduction percentage will not produce the right net salary.

Yes, a standard-form employment contract in Quebec must first be provided in French. The parties may use another language only after the employee has examined the French version and expressly chosen the other language.

A generic English-only EOR template with a language-choice clause does not replace that first step. Individually negotiated contracts require a separate analysis under the Charter of the French language.

Statutory entitlements include the applicable minimum wage, vacation and vacation pay, public-holiday rules, protected leaves and termination protections. They depend on the province or federal jurisdiction and the employee’s eligibility.

Payroll pension and Employment Insurance contributions are separate obligations. An EOR’s supplementary health, dental or retirement package is an additional benefit to examine in the quote; it is not a substitute for the legal minimums.

Workers’ compensation is administered by the relevant provincial system. Confirm that the employing entity is registered where coverage is required, and that its classification covers the employee’s actual work.

Ontario expressly covers temporary-agency workers under its scheme; British Columbia generally requires employers hiring workers to register unless an exemption applies. Using an EOR does not remove the client’s own workplace-safety duties.

A Toronto engineer on an illustrative C$100,000 annual salary costs C$106,218.75 before provincial employer charges, insurance, supplementary benefits and the EOR fee in this 2026 model.

Employer CPP plus CPP2 is C$4,646.45; standard employer EI is C$1,572.30. For illustration, adding C$5,000 benefits and C$9,600 provider fees gives C$120,818.75 before the remaining provincial and insurance charges. This is a planning example, not a market salary or supplier quote.

Yes. For payroll employment in Quebec, QPP replaces CPP; the employer does not simply add both pension schemes to the same Quebec pay.

Quebec also has provincial withholding and other contribution rules. If an employee moves between provinces during the year, apply the CRA and Revenu Québec transfer and annual-limit rules rather than restarting every deduction without reconciliation.

Ontario statutory severance is separate from termination notice or pay. It generally requires at least five years’ employment plus the qualifying payroll or business-closure condition.

The payroll test uses at least C$2.5 million of the employer’s global payroll; eligible severance is capped at 26 weeks. Contractual and common-law entitlements can exceed statutory minimums. Calculate the employee’s entitlement against the actual EOR employer, not just the size of your client team.

An EOR does not guarantee that a US company avoids a Canadian permanent establishment. The Canada–US treaty tests the business’s activities and presence, including relevant fixed-place and agency circumstances.

Review what the employee actually does, where the business operates and whether the employee exercises contracting authority. The employment contract and payroll provider address employment administration; they do not decide the client’s corporate-tax position.