Canada at a glance
Taxes in Canada
Employer Contributions
Total employer tax: 7.9%–8.5%
| Contribution Type | Rate |
|---|---|
| Canada Pension Plan (CPP) | 5.45%–5.9% (varies by province) |
| Employment Insurance (EI) | 1.6%–2.2% (varies by territory) |
| Employer Health Tax | 0.98%–4.3% (varies by province) |
Total employer tax: 7.9%–8.5%
| Contribution Type | Rate |
|---|---|
| Canada Pension Plan (CPP) | 5.45%–5.9% (varies by province) |
| Employment Insurance (EI) | 1.6%–2.2% (varies by territory) |
| Employer Health Tax | 0.98%–4.3% (varies by province) |
| Contribution Type | Rate |
|---|---|
| Canada Pension Plan (CPP) | 5.45%–5.9% |
| Employment Insurance (EI) | 1.18%–1.58% |
| Federal income tax | Progressive (see below) |
| Provincial income tax | Additional — varies by province |
| Taxable Income (CAD) | Federal Rate |
|---|---|
| Up to $57,375 | 15% |
| $57,376 – $114,750 | 20.5% |
| $114,751 – $177,882 | 26% |
| $177,883 – $253,414 | 29% |
| Over $253,414 | 33% |
Provincial income tax applies in addition to federal rates and varies significantly by province.
Employer of Record in Canada
How Remote& EOR Works
Remote& acts as the legal employer of your Canadian workers — managing CPP/EI contributions, payroll, provincial tax registrations, and employment contracts while you direct the work.
| Party | Role |
|---|---|
| Your Company | Manages work tasks, performance, and team direction |
| Remote& | Runs payroll, files CPP/EI/income tax, administers benefits, ensures compliance with federal and provincial employment standards |
| Employee | Works for your company under a locally compliant Canadian contract |
Ask Remi:
"Hire a data engineer in Toronto — CAD 110,000/year, starting next month" Remi handles everything: contract, CRA registration, CPP and EI setup, provincial payroll, and benefits enrollment.
Benefits in Canada
- Canada Pension Plan (CPP): Mandatory for all employees outside Quebec (Quebec Pension Plan applies). Both employer and employee contribute
- Employment Insurance (EI): Mandatory. Employer and employee both contribute; EI provides income replacement for job loss, illness, and parental leave
- Workers' compensation insurance: Mandatory in all provinces — covers workplace injury and illness
- Extended healthcare and dental coverage
- Additional pension contributions (RRSP/DPSP matching)
- Extra paid days off
- Wellness and mental health programs
- Virtual care and health coaching
- Flexible and remote working arrangements
- Professional development and training budget
- Transportation allowance
Leave entitlements
| Leave type | Entitlement |
|---|---|
| Paid Annual Leave | Minimum 2 weeks; varies by province and tenure |
| Sick Leave | Varies by province; no federal statutory paid sick leave (some provinces provide 3–10 days) |
| Maternity Leave | 16–19 weeks |
| Paternity Leave | No separate statutory entitlement (subsumed within parental leave) |
| Parental Leave | 37–71 weeks (varies by province/territory; EI-funded) |
Employment conditions
Probation
Probation periods range from 29 days to 6 months depending on the province or territory.
Employee Monitoring
Ontario employers with 25 or more employees must maintain a written policy disclosing electronic monitoring practices.
Employee Rights & Protections
Canadian workers are entitled to: written employment contract, payslip, flexible working rights, health and safety protections, refusal of unsafe work, equal pay, protection from harassment and violence, and trade union membership.
Payments
End of employment in Canada
Canada does not recognize at-will employment. Lawful termination requires either notice or payment in lieu. Non-unionized employees (in most provinces) may be dismissed without cause, but statutory and common-law notice periods must be honored.
Before terminating for performance reasons, employers should follow a progressive discipline process and document all steps. Employees may not be dismissed during protected leaves (maternity, parental, domestic violence, compassionate care, critical illness).
Severance pay applies to employees who have worked for a qualifying period — thresholds and amounts vary by province. Employees in Ontario, for example, may be entitled to both statutory severance and common-law reasonable notice.
Frequently asked questions
Four routes: run payroll from HQ for short-term arrangements; engage genuine independent contractors for project-based work; incorporate a Canadian entity for direct employment; or use Remote& as Employer of Record — covering federal and provincial obligations without you needing to set up locally.