North America
Hiring in Canada: HR and payroll basics for US companies
Canada is often the first country US companies hire in. Employment rules are set mostly by provinces, payroll deductions differ from the US, and Quebec adds its own requirements.
Payroll basics
Canadian employers deduct federal and provincial income tax, Canada Pension Plan contributions (or Quebec Pension Plan in Quebec), and Employment Insurance premiums, and remit them to the Canada Revenue Agency. When employment ends, employers issue a Record of Employment.
Employment standards
Each province sets its own rules for minimum wage, overtime, vacation, statutory holidays, and termination notice. Quebec also has French language requirements for workplace communications.
Ways to hire
- An employer of record, for the first few hires.
- Your own Canadian entity and payroll provider, once headcount grows.
- Contractors, when the work is genuinely independent.
Helpful categories
Frequently asked questions
Do US companies need a Canadian entity to hire?
No. An employer of record can employ people on your behalf.
What is a Record of Employment?
A form Canadian employers issue when employment ends, used for Employment Insurance claims.
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