Employers expand into Canada for several different reasons. Boasting one of the highest GDPs ($1.6 trillion) globally, Canada encompasses highly lucrative target markets for a variety of businesses.
Canada also contains highly affluent consumers, thus making it an ideal consumer market. Consumer spending in Canada hit an all-time high of 1193017 CAD Million in the fourth quarter of 2019.
With a steady stream of skilled immigrants into Canada, the country is not short of talent. Accentuating this is Canada’s rich sources of oil and gas, timber, and minerals, making Canada rich in human and natural resources.
Moreover, the proximity of a developed market like the USA attracts businesses to Canada, as the latter shares several common characteristics with the USA.
Why Use a Canada PEO?
A Canadian Professional Employer Organization can benefit international companies to establish their footprint in Canada. Companies enter new markets for various reasons – business expansion, new revenue streams, better market fit, lower costs, etc.
Here is how a Canada PEO can help.
Although the country is business-friendly with concessions such as low corporate taxes, trade pacts, etc., expanding into Canada is still demanding. Canadian labor laws and compliance are similar to the ones in the USA. However, even the most experienced of employers always run the risk of violating compliance.
For smaller businesses that cannot afford the monetary and opportunity costs of researching the market, entering Canada can be a risky endeavor.
A Canada PEO provider can help you navigate these risks and hire talent without any employment risks. A PEO simplifies the process of onboarding the candidates you hire into your company for you to better focus on business development, strategy, marketing, recruitment in the new Canadian market.
Choosing the right PEO in Canada guarantees a more straightforward global expansion process. HR tasks such as onboarding, expense management, payrolling, payslip generation, benefits management are done under compliance when choosing a Canadian PEO.
Canada PEO Costs
Usually, Professional Employer Organizations charge based on two pricing models – fixed and variable. A PEO based on the fixed pricing model charges a transparent fee ranging between $200 – $1000 per employee per month.
Multiplier is one such PEO solution. Our costs for Canada start from $200 per employee per month. The final price depends on the complexity of employment laws of the employee’s jurisdiction.
Our prices ensure that you get the most out of your employee spending. Every employee hired through our PEO also receives HR support, benefits management, and a live dashboard to track workforce spending in real-time.
How to Hire in Canada
The following sections will give an overview of hiring in Canada.
Canada Employment Contracts
When creating an employment contract compliant with Canadian labor laws, you need to consider the following information.
The average workday for an employee in Canada is eight hours – 40 hours a week. The provincial employment law is responsible for regulating the working hours.
You cannot subject your employees to a continuous work week encompassing more than seven straight days as an employer. Employment contracts must allow employees one day of rest per seven-day period. Moreover, between each 8-hour shift, employers are supposed to offer a break period of 8-13 hours between two shifts.
Use the following tips to create a compliant compensation plan:
- Employees should be paid an average salary of $52,600
- Employees working overtime should be compensated at one and half times their hourly rates
- Check the provincial laws of governments in each state
As your Canada PEO, Multiplier can create compliant employment contracts at the tap of a button. Our SaaS-based Professional Employer Organization enables you to generate compliant agreements in a single click. Additionally, employers can request changes to the agreement wherever needed.
Employment benefits in Canada
Offering employee benefits in Canada in a compliant manner may warrant some research. Here are some tips to understand government-stipulated benefits and leave entitlements.
Maternity leave in Canada lasts up to 17 weeks for pregnant employees. In some provinces, employees can take up to 63 weeks of unpaid parental leave.
While on maternity leave, an employer must not pay benefits or make payments to employees. Federal Employment Insurance, however, covers employees’ wages and benefits.
Employees in Canada are obliged to provide two weeks of paid vacation after one year of service.
Employees in Canada are generally entitled to nine holidays:
- New Year’s Day
- Good Friday
- Victoria Day
- Canada Day
- Labor Day
- Thanksgiving Day
- Remembrance Day
- Christmas Day
- Boxing Day
Each province in Canada observes separate public holidays. Partnering with a PEO will help you understand the leave entitlements for each employee.
Laws governing sick leaves vary with each province. Although sick leaves make sure employees have the right to take leave when ill, sick leaves in Canada are generally unpaid. However, through the Canada Pension Plan or Employment Insurance, employees can obtain compensation.
Employers in Canada should be aware of benefits, all worker’s compensation, and retirement plans. Mainly, employers should be mindful of the difference in availability and cost of benefits in each federal government.
Multiplier’s PEO solution offers localized benefits for both full-time employees and contractors in Canada.
Employee severance and terminations in Canada
Like many other countries, employment laws in Canada do not recognize at-will employment. This means that employers must terminate employees with prior notice. Additionally, if the employee is terminated without a cause, they have the right to pay instead of notice.
Moreover, employers have to pay an employee their salaries for two days for each year the latter has worked for — provided the employee has worked for more than 12 months. All employees, terminated with or without a cause – must be paid their respective compensation for paid vacation.
Businesses partner with a Professional Employer Organization to tap into the HR expertise offered by the in-region PEO. PEO solutions like Multiplier can help market entry and exit in Canada. As your PEO in Canada, our local experts shall:
- Oversee all changes regarding employee termination,
- Offer legal guidance, and
- Ensure you follow all employment processes so that you stay out of labor court.
Taxes in Canada
Employees in Canada must pay their taxes on all their income they earn within a particular year. The tax slabs vary concerning the source of income – employment income, investment income, commission income, retirement income. Employees have to pay income tax to both the federal and provincial governments.
The tax system is progressive in Canada – the more money you make, the more tax you pay.
Partnering with a Professional Employer Organization in Canada can help you stay on top of Canadian tax laws. For instance, Multiplier’s PEO solution offers you the in-region expertise to outsource your payroll.
With Multiplier’s PEO/EOR solution, treading into a new market is as seamless as confidently ice-skating.
We can help you onboard your preferred candidate, handle HR issues and payroll, and ensure compliance with local laws. By partnering with our EOR in Canada, you avoid the hassle of setting up a foreign branch or subsidiary.
Once you have chosen your desired talent, start generating and customizing employment contracts for them in a few clicks and manage the workforce from a single platform. You can also pay thousands of employees in Canadian Dollars with a single click.
Hire and expand using the best SaaS-based PEO service in Canada. Contact us to grow your business today.