Employer Of Record In Canada
A new market entails new risks and opportunities. With skilled and well-equipped on-ground staff, your journey becomes easier and simpler. Skuad's EOR solution has helped hundreds of businesses fulfill their global vision in an optimized manner. Use our in-house and local resources, infrastructure, and knowledge to recruit and hire the best skills in Canada. While you focus on the bigger picture and primary company operations, leave the micro-level HR core tasks to Skuad’s pioneering solution. Learn more about how Skuad’s EOR solution can help you set up a business entity in Canada.
Canada At A Glance
Estimated Population: 38.78 Million (2023 estimate)
Currency: Canadian Dollar (CAD). The symbol used is $.
The number of officially recognized languages spoken: 196 languages, of which 2 are official languages, 128 immigrant languages, and 66 indigenous languages.
Languages frequently used: English, French
GDP: USD 2.1 trillion (nominal; 2023)
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Employment In Canada
As per the Canadian Constitution, the federal government does not have much say in the labor laws in Canada. The federal government only runs the federal programs of public pension benefits and unemployed insurance. Otherwise, Canadian labor laws are directly under the purview of individual provinces and territories. However, industries like airlines, telecom, and international shipping are governed by federal jurisdiction. Navigating the complex legal landscape can be a big challenge for companies looking to expand remotely. Skuad's EOR Solution can offer customized solutions that meet your unique HR needs.
Canadian Labor Laws are applicable for Canadian natives, citizens, and foreign workers. Some of the basic rules for employment in Canada include compulsory pay for work, workplace safety, and the prohibition of employers from taking a passport or work permit from foreign workers.
Here are some important Canadian Employment Laws to be aware of:
Contractors vs. Full-time Employees
As per Canadian laws, employees and contractors can be hired by businesses in Canada. Employees enjoy statutory benefits and are also protected as per employment contracts in Canada under the Employment Standards Acts. Independent contractors have no such entitlement under any law. Some of the benefits that employees are entitled to include payroll deductions, leaves, overtime pay, minimum wages, a notice of termination, etc., while independent contractors get payment via invoices and are responsible for submission of their tax and HST to the government.
Here are some other key differences – employees work full-time for the company while contractors provide services on a project-to-project basis to clients; the company is also responsible for providing tools, uniforms, and office space to employees while contractors organize the same on their own.
Appendix A of the Canadian Labour Code graphically illustrates the employee/independent contractor continuum. Workers are protected under Part II and Part III of the Canadian Labour Code and given the status as employees as per the employer agreement in Canada. Request a demo today.
Hiring in Canada
To hire employees in Canada, the employer needs to have a Payroll Deductions Account and Business Number (BN). Skuad's Employer of Record Solution in Canada helps you hire a local workforce without registering for a BN with CRA.
To start the hiring process in Canada, the employer must first create job descriptions and then advertise the position. After this, shortlisted candidates are interviewed and then finally hired. Although a written employment contract is not mandatory under the Canadian Labour Laws, it is good to write the details of terms and conditions like duties, hours, salary, wages, overtime, benefits, probation and termination, etc.
Once you set up your business subsidiary in Canada, you can use online search engines' services to find the right people to work for you. Some of Canada's top job search engines are – Indeed Canada, Glassdoor, Monster Canada, CareerBuilder Canada, Eluta.ca, Jobbank, Jobillico, and Jobboom. Most of these sites are credible and have helped hundreds of hiring companies in Canada recruit top talent.
However, if you work with an EOR like Skuad, not only does it save you from the tedious and long-drawn process of hiring candidates, it also frees you from carrying out other mandatory requirements as per the Canadian Labour Laws. For example, examining the new employee's SIN (Social Insurance Number), filling out forms like Personal Tax Credits Return, TD1, Federal TD1, Source Deductions Return, maintaining a separate file for the newly joined employee etc. Skuad’s hi-tech EOR Canada handles all your HR needs end to end so that you can focus on all other aspects of your Canadian expansion. Get in touch with Skuad to learn more.
EOR Canada Onboarding - Making it indelible
You only need to supply pertinent information and authorize the employment agreement.
As your legal employer in Canada, we will:
- Schedule a call to discuss HR and employment information for Canada, as well as address any queries, to extend a warm welcome.
- Create a bespoke employment agreement in English and French (or other local language)
- Provide the employment agreement and benefits details for the new employee's signing and evaluation.
- Collect the employee's tax and banking details to establish payroll.
- Provide an employee with a local point of contact for any queries regarding their job, local HR or payroll.
Typically, the full staff onboarding process may be finished within two weeks.
Probation & Termination
To know more about termination of employment and probation period, visit Skuad.
A business expansion into Canada needs to be strategically planned. Choosing to go ahead with Skuad's comprehensive Employer of Record (EOR) solution can be a significant advantage for foreign businesses that wish to expand globally in a cost-effective manner. The versatile platform helps you hire a local workforce without the need to interpret the local labor laws – because this is taken care of by us.
The recruitment of a workforce in Canada can be challenging and daunting as the entire ecosystem is complex. With the help of employers of record companies in Canada, you will have a partner who oversees the onboarding process, hires employees on your behalf, ensures compliance with provincial and federal labor laws in Canada, processes salaries, benefits, and handles taxation all-in-one at a centralized platform. All that is required from you is clarity on your exact requirements, and Skuad’s EOR solution will customize the solution as per your business needs.
Skuad's employer of record services includes legal coverage, a globally-enabled HR ecosystem, flat price with zero hidden costs, a smart self-service platform that comes with a range of tools for easy accessibility, comprehensive hire-to-retire services, 24x7 support, and flawless personal data compliance.
Types Of Visas In Canada
Foreigners who want to work in Canada must first obtain a work permit. There are two different types of Canada Work Visa.
Canada work visa requirements include, among other things:
- Proof of medical health
- Proof that the candidate will not work for 'ineligible' employers
- Ensure that the person is not a threat to the country's security.
- Proof that the candidate will leave the country once the work permit in Canada expires.
- Proof of financial security to take care of self and family during the stay in Canada
- Proof that there is no record of criminal activity – produce a Police Clearance Certificate.
- Ensure that he or she will not work for employers involved in erotic or striptease business
- Be ready to offer any other document on request.
Additionally, there are other requirements if one applies from outside or within a Canadian work permit for foreigners.
Types Of Work Permits
A work permit is mandatory in Canada. There is no concept of a Canadian work permit without a job offer.
Know more about work permits in Canada through Skuad global HR platform.
Payroll & Taxes in Canada
Canada Employer Payroll Taxes
Canada payroll tax rates
Every province in Canada has its taxation rates. The Payroll Deduction Table is referred to as T4032, presenting the deduction tables for federal and provincial tax deductions, Canada Pension Plan contributions, and Employment insurance. Refer to the official Canadian site Canada.ca for more information. You can alternately opt for payroll outsourcing in Canada through an EOR solution to make things easier and faster for you.
Bonuses are a common thing in Canada. It's unclear if businesses are compelled to pay a bonus if an employee leaves before the bonus is due. One consideration in the decision will be the circumstances surrounding the separation, such as whether the employee resigned or was fired by the employer. The contract's terms will most likely determine what happens.
Canada is the land of opportunities, and it is a good move to expand in this region. With multiple business opportunities in Canada, you can choose to incorporate a holding company or take the EOR route. The Canadian system permits incorporating a holding company in Canada.
You can set up your business in Canada in the following three ways:
- Corporation – The business is incorporated as a legal entity, and none of the shareholders have any personal obligations for debts, etc. The entity can be incorporated at the federal level or provincially.
- Extra-Provincial Corporation – In this case, the incorporation happens at the provincial level only and needs to meet the province's requirements.
- Partnership – It could be a general partnership firm or a limited partnership. There is the option to convert it into a Limited Liability Partnership later.
Steps to incorporate a holding company or a subsidiary in Canada:
- Registration of the company under the Company Act. Choose from the three options mentioned above.
- Non-commercial operations need to be confirmed.
- No share capital requirement.
Professional Employer Organization (PEO)
The level of involvement that you want in the HR functionalities of your overseas entity will determine whether you should opt for a professional employer organization in Canada or an EOR Solution. Skuad offers both services to its clients.
While it is usual for people to confuse the two, there are many differences between an EOR and a PEO. Both forms of service providers provide HR-related support to foreign businesses. However, the EOR is the legal employer that takes over the entire liabilities and responsibilities associated with payroll and compliances, whereas the PEO acts as a co-employer and shares the responsibilities with the parent company. When you choose an EOR, you need to get into any payroll or tax-related matters in Canada or any other country where you plan to expand, which means that you do not have to establish your business entity in Canada. However, with a PEO, you are more in control, though it requires that you set up your business entity in Canada. Book a demo to find out which service will best suit your particular needs.
Global expansion plans are critical for a businesses' success. When you decide to set up a remote workforce in Canada, there are various factors to address before setting up your subsidiary in Canada. It could take a lot of time, money and overburden your existing resources unnecessarily.
Every county has its distinct compliances and taxation laws, payroll, and HR regulations, which can make matters complicated. Choosing the services of Skuad's Employer of Record Canada solution will help you expand effectively abroad without getting into the intricate hassles of understanding the local laws, setting up a subsidiary, hiring the right people, and processing payroll as per the laws of the land. Talk to us to find the best EOR solution for your requirements.
FAQs for EOR in Canada
What is an Employer of Record in Canada?
An Employer of Record in Canada provides legal employment for employees, managing payroll, tax filings, and ensuring compliance with Canadian employment laws, helping companies to efficiently expand their workforce.
Is an Employer of Record legal in Canada?
Yes, utilizing an Employer of Record service is completely legal and a widely accepted practice in Canada. EOR services operate in full compliance with Canadian employment laws and regulations, ensuring a lawful and efficient employment process for both employers and employees.
What is the meaning of EOR?
EOR stands for Employer of Record. It refers to a third-party organization that acts as the official employer for tax and legal purposes, handling all HR-related functions including payroll, tax compliance, employee benefits, and ensuring adherence to local labor laws, while the employee performs work for the client company.
Can employers check your record of employment in Canada?
Yes, employers in Canada can request and review a Record of Employment (ROE) for job applicants or employees. The ROE is a document provided by the previous employer that outlines the employee's work history, earnings, and reasons for leaving the job. Employers typically use this information for verification purposes and to assess the applicant’s employment history. However, it's important to note that this process is subject to privacy laws and requires the consent of the employee.