Canada PEO Employment Services

Velocity Global’s International PEO (Professional Employer Organization) solution expedites and simplifies your business’ expansion into Canada. Without the need for entity establishment, our team of experts streamlines the employee onboarding process with the quickest and most agile global expansion method available.

When your company chooses International PEO to seamlessly expand into Canada, Velocity Global becomes your Employer of Record. This approach enables us to compliantly hire and onboard your Canadian team members on your behalf. Whether you need to hire a single essential employee or build a new team from the ground up, you retain full employee management while our experts oversee all global payroll, compliance, and risk mitigation concerns.

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Canada Fast Facts

Currency: Canadian Dollar (C$)
Population: 37.7 million
Economy: $1.7 trillion (10th-largest)
Top Sectors: Business, services, industrial production, real estate and rental and leasing, and manufacturing
National Holidays:

  • Good Friday
  • Victoria Day
  • Canada Day
  • Civic Holiday (except Quebec and Yukon)
  • Labour Day
  • Thanksgiving
  • Remembrance Day
  • Christmas Day
  • Boxing Day

Hiring Considerations in Canada

Benefits of hiring in Canada:

  • American and European companies expanding into Canada find a market with similar business practices and cultural norms, albeit with some differences explored below.
  • Outside of Quebec, English is the language of business, simplifying communication in some foreign markets with language barriers.
  • Canada offers a lower corporate tax rate at 15% compared to the United States’ 21% rate, making it a more attractive market for many businesses with North American operations.
  • Although COVID-19 stunted Canada’s economic growth, the International Monetary Fund (IMF) projects the country will see strong recovery in the coming year. Canada’s resilient and diverse  national and provincial economies make it an attractive market for both testing a short-term project or establishing a long-term presence.
  • Tech companies find Ontario, the Canadian province containing its capital, Ottawa, and richest city, Toronto, a prime location for tech talent. Canada’s openness to global talent through its Global Talent Stream initiative furthered Toronto’s tech boom, attracting foreign talent and expediting immigration to the country. Employers expect a diverse and highly-skilled talent pool to drive their growth.

Challenges when expanding into Canada:

  • Though Canada offers attractive tax rates, the time it takes to complete these taxes hovers around 131 hours annually, making paying taxes a cumbersome process. Additionally, provincial VAT (sales tax system) rates vary, while some provinces have no VAT.
  • Similar to the United States, Canadian laws vary between provinces. Some of these laws offer attractive environments to businesses; however, keeping up with varying employment, tax, and other laws can quickly compound and create confusion if operations extend beyond one province.
  • Small businesses must also anticipate potential challenges obtaining credit. Government initiatives exist, but are not prominent; small businesses may have difficulty with initial investments needed to begin operations.

Cultural nuances and must-knows for doing business in Canada:

  • Shake hands during introductions, like in most western markets. Handshakes are common with introductions between both men and women. It is not uncommon for men and women to kiss lightly on the cheek if close friends, though rarely between two men.
  • Introduce meeting members by rank, not gender. Authority revolves around a person’s position, not their name, status, sex, or class.
  • Maintain eye contact during meetings and speaking with people one-on-one and in a group. Lack of eye contact may come across as disinterest or boredom.
  • Be punctual. Timeliness applies to both work hours and meetings. After 10 to 15 minutes, meeting members will likely not wait for the host to arrive if they have not communicated their tardiness. Always reach out if you or your colleagues will not arrive on time.

Employment Contracts in Canada

Minimum wages and salaries:

  • Minimum wages vary by province.

Probation periods:

  • Employers including probation periods in employment contracts implement periods lasting between one and six months, though most last between three and six months.

Bonuses:

  • Employers may pay discretionary or other bonuses, though should include the bonus type and stipulations in individual employment contracts. 13th-month pay is not mandatory in Canada.

Termination and severance considerations:

  • Employers must provide termination notice to all employees, though minimum notice periods vary by province.
  • In some provinces, minimum severance pay must accompany a notice period. Some provinces do not require any severance pay with the notice period.
  • Quebec employers may not terminate employees with two or more years’ uninterrupted service without sufficient cause.

Paid Time Off & Benefits

Maternity leave:

  • Canadian Labour Code offers up to 17 weeks of maternity leave. Additionally, an employee caring for a newborn or newly adopted may take up to 63 weeks of leave.
  • Both parents may take joint parental leave if working for an employer under the Labour Code’s jurisdiction, totaling an additional eight weeks of leave. Parents may split parental leave up to 71 weeks. Similarly, parents who take simultaneous leave or one after the other may take up to a combined 71 weeks of leave.
  • Cumulatively, parents combining maternity and parental leave may take a total of 86 weeks’ leave. Note that combined leave applies only to shared parental leave.

Vacation and annual leave:

  • Employees receive a minimum of two weeks’ annual vacation for each completed year of employment. After five uninterrupted employment with the same employer, the employee receives three weeks’ vacation; after 10 years, leave increase to four weeks’ vacation.

Sick leave:

  • Employees with three consecutive months of employment with the same employer receive up to 17 weeks of sick leave.
  • All employees must provide a doctor’s note certifying illness within 15 days of returning to work if an employer requests documentation.
  • Sick leave can interrupt other types of leave. For example, an employee on maternity leave may pause maternity leave to take sick leave. Once the employee returns from sick leave, the original leave period continues.

Payroll

Average workweek hours:

  • Canada’s workweek is eight hours per day within a consecutive 24-hour period. The workweek runs between midnight on Saturday and midnight the following Saturday, and totals 40 hours.
  • Some provinces extend a 48-hour workweek.

Overtime considerations:

  • All work hours beyond 40 or 48 hours constitute overtime. These additional hours require pay at a minimum of 1.5 times the employee’s hourly wage. Exceptions include managers and professionals such as lawyers, doctors, engineers, dentists, and architects.

Employer Contributions

Contribution

Burden

Pension

5.25%*

Employment Insurance

2.27%**

Provincial Health

1.95%***

Workers’ Comp

0.38%^

Vacation Accrual

4.00%

Total

~13.85%

*Maximum contribution: 2,829.75 CAD/year
**Maximum contribution: 1,204.31 CAD/year
***not applicable in each state
^Max contribution varies by province
^^Contributions higher in Quebec: 12.81%
Burden for USD $100,000 salary: 7.07% – 9.10% depending on territory

Choose Velocity Global

Growing into any international market comes with many considerations. But an experienced global expansion partner like Velocity Global sets you up for a fast, compliant Canada expansion—without the financial and operational hurdles of entity setup.

Velocity Global’s International PEO solution provides the essential flexibility your business requires to pursue short-term projects, onboard one or more international employees, and grow your Canadian presence. International PEO makes it all possible—up to 60% of the cost of setting up an entity and 90% faster.

Ready to take on the Canadian market and grow your global footprint? Let’s get started.