Employing in Canada
Payroll Services Canada
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Canadian Payroll Services
Find the simple solution to streamlining your business with Payroll Outsourcing in Canada through PeoplePay Global. Our professional experts will handle all services from employee Wage Calculations and Payslips to Tax Deductions, whilst staying compliant with CRA (Canada Revenue Agency) Regulations. By outsourcing your payroll management, you can reduce any administrative issues and minimise costly errors, to ensure all employees are paid correctly in a timely manner.
At PeoplePay Global, our Canadian specialists will stay up to date with federal legislation to give you the peace of mind that you are staying compliant, helping your business continue to grow and succeed. Furthermore, you can be assured of data security, clear reporting and cost-effective support for a simple solution to administrative stress.
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Canada does not have a single nationwide minimum wage. However, there is a federal minimum wage that applies to employees in federally regulated industries, including airlines, banks, rail, postal services, etc.) As of 1st April 2025, the federal minimum wage is CAD$17.75 per hour. This federal rate is adjusted annually based on inflation, and employers must pay whichever is higher: the federal or the provincial/territorial rate.
In Canada, each province and territory has its own minimum wage. For example, in Quebec, the minimum wage is CAD$16.10, whereas in Nunavut, it is CAD$19.75.
The minimum wage you are entitled to depends on which province/territory you work in. Additionally, your wage will depend on whether your job is federal or provincial/territorial.
Employers must pay at least the higher of the federal minimum wage for federally regulated work and the provincial/territorial wage rate where the work is performed.
Some provinces may have different rates for students or tipped workers; many jurisdictions have moved toward a single general rate.
In terms of taxes, your income tax bill is made up of federal and provincial/territorial taxes. Only the portion of your income that falls into each bracket is taxed at that rate. For example:
- 14.0% on income up to $58,523
- 20.5% up to $117,045
- 26.0% up to $181,440
- 29.0% up to $258,482
- 33.0% on income above $258,482
In Canada, pension contributions are made through the Canada Pension Plan (CPP). If you work in Quebec, however, this will be under the Quebec Pension Plan (QPP).
The Canadian pension plan is a mandatory public pension system for workers outside Quebec that provides retirement, disability, survivor, and children’s benefits.
Employees will pay CPP contributions through a percentage of their employment income, with your employer matching whatever contributions you make. If you are self-employed, you must pay both the employee and employer portions of the contribution.
Contributions are applied to income at a 5.95% employee rate, with the employer matching, resulting in a total of 11.9%.
In Canada, working hours are primarily regulated by provincial and territorial employment standards laws. However, workers in federally regulated industries such as banks, railways or airlines will fall under the Canada Labour Code.
For most employees in provinces and territories, you will work 8 hours per day, for 40 hours per week. Some provinces may use 44 hours per week as the overtime threshold.
This is the same number of working hours per day/week for those covered by the Canada Labour Code, though overtime generally applies thereafter.
Overtime is paid at 1.5 times your regular wage. Employers generally cannot require excessive hours without an employee agreement, however. For example, in Ontario, employees can agree in writing to work more than 48 hours per week.
Although part-time employees work fewer hours than full-time employees, they will still receive overtime if they exceed the threshold.
In Canada, statutory leave and time off are governed by provincial/territorial employment standards laws, with some federal rules for federal public servants.
For annual/holiday leave, employees are entitled to at least 2 weeks of paid leave per year after 1 year of service and 3 weeks after 5 years of service. Holiday pay is typically 4% of wages for 2 weeks, and 6% for 3 weeks. If your annual leave is unused, it will be carried over to the next year.
Canada has federal and provincial public holidays, so employees typically get a paid day off if the holiday falls on a normal working day. If they choose to work on a holiday, they will receive premium pay, often 1.5-2 times their regular pay, or another day off as a substitute holiday.
For sick/personal leave, most provinces guarantee a minimum number of unpaid sick days. Ontario, for example, will provide 3 paid sick days, with up to 3 unpaid sick days annually. Whereas federally regulated employees will be allowed 10 paid sick days.
Maternity and paternal leave can differ. Federally regulated employees may be entitled to up to 17 weeks of unpaid maternity leave and up to 63 weeks of unpaid parental leave. Provinces provide similar unpaid leave entitlements, but they are often slightly shorter. However, Employment Insurance (EI) will provide partial wage replacement for any eligible parents.
In Canada, termination of employment is governed by provincial/territorial employment standard laws. For federally regulated employees, the Canada Labour Code will govern termination.
When an employer terminates employment without cause, they must either provide advance notice or pay instead of notice. This would vary per province, for example:
- Ontario: 1 week per year of service, up to 8 weeks
- Quebec: 1 week for under 5 years of service, 2-8 weeks for 5-10+ years of service
- Federally regulated: 2 weeks for under 2 years of service, up to 8 weeks for 2-8 years of service
If there is an immediate dismissal for cause, such as serious misconduct, no notice is required to the employee. This would be situated for theft, fraud, workplace violence or safety violations.
In some provinces, such as Ontario and Alberta, employees may also receive severance pay if they have worked in service for more than 5+ years, or, if the employer meets certain size criteria, such as 50+ employees.
Upon termination, employees must receive:
- Outstanding wages
- Accrued holiday pay
- Overtime pay (if applicable)
- Notice or pay in lieu
- Severance (if applicable)
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