Employer of record in Canada: costs and rules for 2026

What makes hiring in Canada different

Payroll contributions are federal (except in Quebec), but employment standards are mostly provincial. The federal labor figures below bind only federally regulated employers, so treat them as a benchmark, not the rule for a hire in Toronto or Vancouver.

• Two pension tiers. CPP is 5.95% on earnings between CAD 3,500 and CAD 74,600 (employer maximum CAD 4,230.45). CPP2 adds 4% from CAD 74,600 to CAD 85,000.
• EI costs the employer 1.4 times what the worker pays. The 2026 employee rate is 1.63% on up to CAD 68,900 of insurable earnings, so the employer premium tops out at CAD 1,572.30.
• Quebec runs its own system. QPP is 6.30% up to CAD 74,600 (maximum CAD 4,479.30) plus QPP2, the QPIP parental plan costs the employer 0.602% on up to CAD 103,000, the Health Services Fund adds 1.65% to 4.26% depending on total payroll, and the EI employer maximum drops to CAD 1,253.98.
• Provincial payroll taxes. Ontario's Employer Health Tax runs 0.98% to 1.95% by payroll band, with the first CAD 1 million exempt for eligible employers. Provincial workers comp boards price premiums by industry.
• Federal notice now grows with service. Section 230 of the federal labor code gives 2 weeks after 3 months, then 1 more week per year from 3 years, up to 8 weeks at 8 years (in force February 1, 2024). The canada.ca summary page still says two weeks, so do not rely on it.
• Federal severance after 12 months is 2 days of regular wages per full year of service, minimum 5 days.
• Vacation is paid as a percentage. Federally: 2 weeks with 4% vacation pay after 1 year, 3 weeks (6%) after 5 years, 4 weeks (8%) after 10. There are 10 federal general holidays, and the federal minimum wage is CAD 18.15 an hour from April 1, 2026.

Probation length and pay frequency are provincial too. We have not yet confirmed them from official sources, so get the rule for your hire's province in writing from the EOR before you make an offer.

Employment costs and rules in Canada

What an EOR charges to employ someone in Canada

The all-in cost of one Canadian employee

A CAD 56,643 hire in British Columbia or Alberta, billed through an EOR at the $599 Deel and Remote list price. Contributions come to CAD 4,454.60 (3,162.01 + 1,292.59), or 7.86% of salary.

Two lines can push this up. An Ontario hire whose EOR passes on Employer Health Tax at the top 1.95% band adds CAD 1,104.54 a year. A Quebec hire uses QPP, QPIP and the Health Services Fund instead of the CPP and EI lines above. Workers comp is billed by the province and is not priced here.

Run other salaries in the international employee cost calculator, or compare Canada with other countries in the EOR cost index.

When a Canadian entity beats paying an EOR

The EOR fee is the only line you avoid by setting up your own company in Canada: at $599 a month that is $7,188 (CAD 10,178.75) per employee per year. The CPP, EI and provincial items stay the same either way. In exchange you take on CRA payroll accounts, registrations in each province with staff, and provincial termination rules. Our EOR versus entity break-even guide walks through the headcount where a subsidiary starts to pay, and the permanent establishment explainer covers the corporate tax side.

Paying a Canadian as a contractor

If a contractor is later treated as an employee, the starting bill is the missed CPP and EI: CAD 4,454.60 a year on the employer side at this salary, plus the 7.21% employee share that should have been withheld. Fixed hours, your equipment and an open-ended role all point toward employment. See contractor management platforms for paying true contractors, or hand the classification question to a contractor of record.

Picking an EOR for Canada

By our published scoring method, Multiplier (79 out of 100) and Oyster (64) lead the providers we rank; the full table is on the best EOR ranking. What matters for Canada specifically:

• Multiplier costs $499 per month, or $459 on annual billing. It sets the deposit from employment costs, fees and notice periods, and needs 30 days to process a termination.
• Oyster charges $699 with a deposit of at least one month of total service cost under its terms (its pricing page, in the fee table, gives no amount), credited about 60 days after the end date, and no setup or termination fee.
• Playroll states its deposit plainly: one month's salary, which is CAD 4,720.25 on this sample.
• Remote shows $599 on its pricing page but $699 in a support article from March 2026, and its default terms run 12 months. Details in our Remote review; Deel's two-year promo order forms are covered in the Deel review, and Oyster's late-pay complaints in the Oyster review.

Ask every provider three Canada questions: does it pass Ontario EHT or Quebec's Health Services Fund through, which workers comp class it uses, and whether it bills in CAD or USD.