Employer of Record in Canada

An Employer of Record, or EOR, is your partner for hiring in India without setting up a local entity. Think of it as a simple way to build a team there. You find the talent, and the EOR handles all the legal and HR work on the ground. This means you can hire quickly and compliantly. We at Rivermate act as your EOR to make this process smooth.

How an Employer of Record (EOR) Works in India

Using an EOR simplifies your expansion into India. Here is how we make it happen.

1. You Find Your Candidate. You manage the recruitment and selection process. You choose the best person for the job.
2. The EOR Hires Them. We legally employ your chosen candidate through our local Indian entity. They become our employee on paper.
3. We Handle HR. We manage payroll, taxes, benefits, and compliance with India's labor laws. This saves you from navigating complex regulations.
4. Your Team Member Works for You. Although we are the legal employer, the employee works for your company. You direct their daily tasks and projects.
5. We Manage Payments. You pay us a single invoice. We then pay your employee their salary and handle all deductions and contributions.

Benefits of Using an EOR for Hiring in India

Using an EOR gives you a huge head start in a new market. It removes the biggest administrative hurdles so you can focus on growing your business. It makes global hiring feel local.

• Enter the Market Faster. You can hire employees in days, not the months it takes to register a company in India.
• Reduce Costs. Avoid the high costs and commitments of setting up a legal entity. There are no legal fees or long term office leases.
• Stay Compliant. We stay on top of India’s changing labor laws so you do not have to. This protects you from fines and legal issues.
• Offer Better Benefits. We provide your employees with competitive local benefits. This helps you attract and retain top talent.
• Focus on Your Business. You can concentrate on your core business goals. Let us handle the complexities of international employment.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Canada includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Canada.

Canadian employers must comply with federal and provincial tax obligations, including contributions to the Canada Pension Plan (CPP), Employment Insurance (EI), and provincial payroll taxes such as Ontario's Employer Health Tax (EHT). For 2025, employer CPP contributions are approximately 5.95% of pensionable earnings, with maximum contributions increasing slightly annually. EI contributions are about 1.4 times the employee's premium, with rates adjusted yearly. Provinces like Ontario impose EHT based on payroll, with thresholds and rates varying.

Employers must meet these contribution deadlines and ensure proper employee tax deductions, especially when managing foreign workers or multi-provincial payrolls. Staying compliant involves understanding both federal and provincial tax rules, timely remittance, and accurate payroll record-keeping.

Canada's salary landscape varies by industry, location, experience, and skills, with major cities like Toronto, Vancouver, and Calgary offering higher compensation due to cost of living and demand. Typical salary ranges for key roles include Software Engineers ($80,000–$150,000+ CAD), Financial Analysts ($65,000–$110,000+ CAD), and Construction Project Managers ($80,000–$130,000+ CAD). Employers should conduct market research to set competitive wages aligned with these benchmarks.

Minimum wage rates differ across provinces, ranging from $14.00 CAD/hour in Saskatchewan to $16.77 CAD/hour in Yukon, with specific occupational rates in some regions. Employers must comply with provincial regulations, ensuring wages meet or exceed these minimums. Compensation packages often include bonuses such as performance, signing, and year-end bonuses, as well as allowances for housing, transportation, and education, which vary by industry and company.

Payroll is typically processed bi-weekly via direct deposit, with deductions for taxes, CPP, and EI remittances. Trends for 2025 indicate wage growth driven by inflation, skills shortages, remote work normalization, and economic growth, requiring employers to adapt compensation strategies to stay competitive.

Canada's vacation and leave policies are primarily governed at the provincial and territorial levels, resulting in varied entitlements across the country. Employers must stay informed of local laws to ensure compliance. For annual vacation, minimum requirements typically include 2 weeks after 1 year of employment, with additional weeks and higher pay percentages (up to 6%) accruing after specific years of service, as summarized below:

Public holidays are nationally recognized, with additional regional holidays like Family Day and Louis Riel Day. Employees are entitled to paid days off or premium pay when working on holidays.

Sick leave varies; some provinces provide paid sick days (e.g., BC, NS, Yukon), while others do not. For example, BC offers 5 paid sick days, whereas Alberta provides unpaid leave up to 5 days. Employers may offer more generous benefits.

Parental leave includes maternity (around 15-18 weeks) and shared parental leave (up to 40 or 69 weeks). EI benefits, typically 55% of insurable earnings, support income replacement during this period, with eligibility based on insurable hours.

Other leave types like bereavement, study, family responsibility, and domestic violence leave are available but vary by jurisdiction. Employers should consult local employment standards to ensure compliance with specific leave entitlements.

Canada's employee benefits landscape combines mandatory and optional offerings to attract and retain talent. Employers must provide core benefits such as the Canada Pension Plan (CPP), Employment Insurance (EI), workers' compensation, provincial healthcare, and paid vacation and holidays. These vary slightly by province but establish a baseline of employee security.

In addition to mandatory benefits, many employers offer optional perks like extended health insurance, dental, vision, life and disability insurance, Employee Assistance Programs (EAPs), wellness initiatives, professional development, and paid time off. Extended health plans often cover prescription drugs, dental, and paramedical services, with costs shared between employers and employees.

Retirement plans are vital, with options including RRSPs (often with employer matching), defined contribution (DC), and defined benefit (DB) pension plans, alongside tax-advantaged TFSAs. Larger firms tend to offer more comprehensive packages, whereas SMEs and non-profits may have more limited benefits. Employers must consider costs, employee expectations, and industry benchmarks, ensuring clear communication and compliance with legal standards, including privacy, tax, and pension regulations.

Employers should align benefits with legal requirements, industry standards, and employee needs, maintaining transparent communication to foster satisfaction and compliance.

Employment agreements in Canada define the terms of employment, ensuring clarity and legal protection. They must comply with federal and provincial laws, which set minimum standards for wages, hours, vacation, and termination. Agreements cannot specify terms less favorable than these statutory minimums.

There are two main types:

Key clauses include job responsibilities, compensation, benefits, and termination conditions. Employers should ensure agreements meet legal standards and include essential clauses to mitigate disputes.

Remote work in Canada has grown significantly, with legal frameworks primarily based on existing employment, human rights, occupational health and safety, and privacy laws. Employers must ensure compliance with provincial employment standards, provide reasonable accommodations for disabilities, maintain a safe remote working environment, and protect personal data under laws like PIPEDA.

Flexible work options include telecommuting, flextime, compressed workweeks, job sharing, part-time work, and leaves of absence. These arrangements enable employees greater control over schedules and locations, supporting productivity and work-life balance.

Terminating an employee in Canada involves compliance with federal and provincial laws, especially regarding notice periods, severance pay, and grounds for dismissal. Notice requirements vary by length of service, with minimums ranging from no notice for less than 3 months to 8 weeks for employees with 8 or more years. For example, the table below summarizes statutory notice periods:

Employers must also consider severance pay, especially for employees with longer service or under specific provincial rules. Ontario, for example, requires severance pay if the employee has at least five years of service and the employer's payroll exceeds $2.5 million, typically amounting to one week's pay per year of service, up to 26 weeks.

Terminations can be "with cause" or "without cause." Just cause involves serious misconduct (e.g., theft, harassment) and requires proof, while without cause allows for termination with notice or pay in lieu, often accompanied by severance obligations. Proper procedural steps—such as documentation, clear termination letters, benefits continuation, and legal review—are essential to mitigate wrongful dismissal risks. Employees are protected against wrongful dismissals, discrimination, and constructive dismissals, with the burden on employers to justify reasons and ensure fair process.

Canada is experiencing a notable increase in independent work, with many professionals opting for freelancing or independent contracting. This trend provides individuals with flexibility and autonomy while allowing businesses to access specialized skills on a project basis. For employers, understanding the legal, contractual, and tax implications of engaging independent contractors is crucial. Misclassification of workers can lead to penalties, including back taxes and legal disputes. The Canada Revenue Agency (CRA) uses a multi-factor test to determine the nature of the relationship, focusing on control, ownership of tools, financial risk, integration, exclusivity, and the intention of the parties involved.

A well-drafted contract is essential for defining the independent contractor relationship, covering elements such as scope of work, payment terms, intellectual property rights, and confidentiality. In Canada, contractors typically retain IP rights unless the contract specifies otherwise. Contractors are responsible for their own tax obligations, including income tax, CPP contributions, and GST/HST if their revenues exceed $30,000 annually. They must also maintain appropriate insurance coverage, such as Commercial General Liability and Professional Liability insurance.

Independent contractors are prevalent across various industries, providing businesses with flexibility and access to specialized skills. Common sectors include IT, creative and marketing, consulting, construction, media, and professional services. These roles often address project-based needs, niche skills, and temporary high-level support, offering strategic value without long-term employment commitments.

Canada offers diverse work permit options tailored to different employment scenarios, with the government prioritizing skilled workers across sectors such as tech, healthcare, and trades. Key permit types include LMIA-based permits, LMIA-exempt permits (e.g., under international agreements), open work permits (for spouses, graduates), and the Global Talent Stream (for highly skilled workers). Employers must often secure an LMIA, costing CAD $1,000, to demonstrate the need for foreign workers, while applicants pay a CAD $155 processing fee and CAD $85 biometrics fee if applicable.

The application process involves obtaining a valid job offer, securing an LMIA if required, submitting documents (passport, proof of education, work experience, funds), and possibly undergoing medical and police checks. Processing times vary, with LMIA-based permits generally taking longer. For those seeking permanent residency, pathways include Express Entry, Provincial Nominee Programs, Atlantic Immigration, and caregiver programs. Foreign workers can bring dependents, with spouses eligible for open work permits and children for study permits, provided they meet relationship and financial proof requirements.

Employers must ensure compliance with immigration laws, including verifying work permit validity, paying prevailing wages, and maintaining safe workplaces. Employees must adhere to permit conditions, work only for authorized employers, and maintain valid status to avoid penalties or deportation.