What does a $60,000 hire cost in Canada?
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Total annual employer cost
Full cost breakdown
Statutory contributions and typical benefits for an employee in Canada at $60,000 base salary.
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Key Takeaways for Hiring in Canada
- Canada typically runs bi-weekly payroll (every 14 days), resulting in 26 pay periods per year, and some months may include three paychecks.
- Minimum wage varies across Canada, with a federal minimum wage of CAD 17.30/hour (effective April 1, 2025) for federally regulated sectors, while provinces/territories may set higher rates.
- Standard working hours and overtime rules vary by province and territory, so employers must apply the correct rules based on where the employee works.
- Offboarding requirements include issuing a Record of Employment (ROE) and paying final wages plus accrued vacation, with final pay deadlines varying by province.
Continent
North America
Capital
Ottawa
Currency
Canadian Dollar (CAD)
Language
English, French
Payroll Cycle
Bi-weekly (every two weeks/14 days)
VAT
5%
Quick Facts For Hiring In Canada
26 pay periods per year.
Please note that in certain months, employees may receive three paychecks because the 52-week calendar year doesn’t align evenly with the 12-month calendar.
Canada Employment Contract Overview
Below is the core structure we use when preparing compliant employment contracts for hires in Canada, aligned with local labour law requirements and standard market practice.
- 2 weeks of paid vacation after 1 year of employment
- 3 weeks after 5 consecutive years with the same employer
- 4 weeks after 10 consecutive years of service
What Do You Need To Include In A Canada Employment Contract?
Employment contracts in Canada must clearly define the terms of the working relationship from day one to ensure legal compliance and mutual clarity for both employer and employee.
While specific requirements can vary by province or whether the role is federally regulated, the following elements are considered essential across Canada.
Employee Information
- Full name
- ID number
- Role / Job title
- Start date
- Contract duration
- Working hours
- Probation and notice conditions
- Termination provisions
- Compensation details
Payroll
Average employer cost
7.66% (except in Quebec)
| Category | Details |
|---|---|
| Salaried Employees | Vary by province and territory, with common frequencies being weekly, bi-weekly, or semi-monthly. |
| Avg employer tax | 7.66% (except in Quebec) |
Tax Breakdown
Note: These private sector rates apply for seven years, after which they align with those of the oil and gas industry.
VAT
| Category | Rate / Details |
|---|---|
| VAT | The federal Goods and Services Tax (GST) is set at 5%. Some provinces impose additional Provincial Sales Taxes (PST) or participate in the Harmonized Sales Tax (HST) system, combining GST and PST. |
Mandatory Employee Benefits in Canada
| Benefits | Provider | Funded Through | Notes |
|---|---|---|---|
| Health Insurance | Government | General Tax | Canada operates a publicly funded universal healthcare system that provides medically necessary hospital and physician services to all residents. Coverage is administered at the provincial and territorial level, and employees typically access care through their local health plan.To use public healthcare services, employees must hold a valid provincial or territorial health card issued by the local health authority. Employers are not required to provide private health insurance but may choose to offer supplemental plans covering dental, vision, prescription drugs, or extended services. Due to the breadth and quality of the public system, less than 1% of healthcare services in Canada are delivered outside the public framework. |
| Pension/Social Security | Government | Payroll Contributions | Provides retirement income, disability benefits, and survivor benefits through the Canada Pension Plan (CPP). Contributions are shared equally between the employer and employee, up to an annual maximum set by law. Participation is mandatory for most employees aged 18 to 70 who earn above the minimum contribution threshold, ensuring long-term income security after retirement or in cases of disability or death. |
Leave And Holiday Entitlement In Canada
Annual Leave
Employees in federally regulated sectors are entitled to a minimum of:
-
2 weeks of paid vacation after completing 1 year of employment
-
3 weeks after 5 consecutive years with the same employer
-
4 weeks after 10 consecutive years of service
Employment contracts may provide additional vacation time beyond these minimums.
For calculating vacation entitlement, the employment year may be based on the employee’s hiring anniversary, the calendar year, or another 12-month period set by the employer.
However, it must begin no later than 10 months after the end of the year in which the entitlement was earned.
When the employer determines vacation timing, at least two weeks’ notice must be provided before the vacation begins.
Vacation pay is calculated as follows:
-
4% of annual earnings for employees entitled to 2 weeks
-
6% for those entitled to 3 weeks
-
8% for those entitled to 4 weeks
Upon termination, employees must be paid any outstanding vacation pay from the previous year, as well as a prorated amount for the current vacation year.
Generally, unused vacation cannot be carried over to the next year unless both the employer and employee agree in writing to defer or waive it.
Public Holidays
Federally regulated employees are entitled to 10 paid public holidays:
-
New Year’s Day
-
Good Friday
-
Victoria Day
-
Canada Day
-
Labour Day
-
National Day for Truth and Reconciliation
-
Thanksgiving Day
-
Remembrance Day
-
Christmas Day
-
Boxing Day
Sick Leave
Employees are generally entitled to up to 27 weeks of medical leave for reasons such as:
-
Personal illness or injury
-
Organ or tissue donation
-
Medical appointments during working hours
-
Quarantine
In addition, employees may be entitled to up to 10 paid medical leave days within a calendar year.
Maternity Leave
Federally regulated employees who are pregnant are entitled to 17 weeks of maternity leave. This leave may begin up to 13 weeks before the expected delivery date and must end no later than 17 weeks afterward.
Employees must:
-
Provide a medical certificate confirming pregnancy
-
Give written notice to the employer at least four weeks before starting leave, specifying its duration
If the child is not born within the 17-week period, the leave automatically extends until birth.
In addition to maternity leave, either parent may take up to 63 weeks of parental leave.
Employers are not required to pay wages during maternity or parental leave. However, under the Employment Insurance Act, eligible employees may receive maternity and/or parental benefits during their time off.
Paternity Leave
There is no statutory right to separate paternity leave. However, fathers may take up to 63 weeks of parental leave if eligible.
Other Types of Leave
Federally regulated employees in Canada are entitled to several additional leave types, including:
-
Parental Leave:
May be taken by either parent for up to 63 weeks to care for a newborn or adopted child. It must be used within 78 weeks of birth or placement, with an extension up to 104 weeks if the child is hospitalized.
This leave is unpaid, though employees may receive Employment Insurance benefits.
-
Bereavement Leave:
Up to 10 days following the death of a family member. Leave may begin on the day of death or up to 6 weeks after the last funeral or memorial service.
-
Compassionate Care Leave
-
Up to 28 weeks to care for a gravely ill family member with a significant risk of death, as certified by a medical practitioner.
-
Critical Illness Leave
Up to 37 weeks per year to care for a critically ill child under 18, and up to 17 weeks per year to care for a critically ill adult family member.
-
Leave for Victims of Family Violence
Up to 10 days per year for employees who are victims of family violence, or whose child is a victim.
This leave may be used to seek medical care, access support services, obtain counselling, relocate, seek legal or law-enforcement assistance, or participate in legal proceedings.
Employers may request documentation within 15 days of the employee’s return to work.
-
Personal Leave
Up to 5 days per year to attend to health or education obligations for the employee or a family member, manage urgent situations, attend a citizenship ceremony, or address other prescribed matters.
-
Leave for Murdered or Missing Children
Up to 156 weeks to cope with the death or disappearance of a child potentially due to a crime.
-
Reservist Leave
Unpaid leave for employees with at least three months of service who are members of the Canadian Armed Forces, allowing participation in training or deployment in Canada or abroad.
-
Leave for Traditional Aboriginal Practices
Up to five days per calendar year for activities such as hunting, fishing, or harvesting. Employers may request documentation confirming Aboriginal status within 15 days of the employee’s return.
Court or jury duty leave is unpaid, with no restrictions on length or frequency.
Termination and Offboarding in Canada
Termination and offboarding in Canada follow strict labour law rules covering notice periods, severance, and final pay.
| Type | Possible? |
|---|---|
| Termination for Cause (poor performance, misconduct, etc.) | Yes |
| Termination without Cause | Yes |
| Mutual Termination Agreement (MTA) | Yes |
| Redundancy | Not possible under the EOR setup |
Canada Employee Resignation
In Canada, a resignation is always initiated by the employee. Employers are not required to justify an employee’s decision to resign, and employees may leave for any reason. The applicable rules can differ depending on whether the resignation occurs during or after the probation period and may also vary by province.
Notice
Form
Resignations must be submitted in writing.
Notice period
In most Canadian provinces, there is no statutory requirement for employees to provide notice unless the employment agreement specifically requires it.
While notice is not legally mandatory in many cases, it is generally expected as a matter of good faith and professional practice. If the employment contract includes a notice clause, the employee must comply with it.
Payment in lieu of notice or notice waiver
When an employee provides notice, the employer may choose to waive all or part of the notice period. In such cases, the employer must continue paying the employee for the waived portion, either through a combination of worked notice and pay in lieu.
Employers cannot require employees to use unused vacation time during the notice period unless the employee agrees.
End-of-Service Benefits
Severance/Gratuity
Federal law does not require severance pay when an employee resigns voluntarily.
Other Benefits
All earned wages up to the employee’s last day of work, along with accrued but unused vacation, must be paid out upon resignation.
Employers are required to issue final pay promptly, with deadlines varying by province, including:
-
British Columbia: within 6 days of the last working day
-
Alberta: within 10 days after the end of the pay period in which the resignation occurred, or within 31 days of the last day worked
-
New Brunswick: no later than the next regular payday, and no later than 21 days after the last day of employment
Any additional contractual benefits such as bonuses or stock options are handled according to the terms of the individual employment agreement. Final pay must always include all earned wages and accrued but unused vacation.
Termination Documentation
A Record of Employment (ROE) must be issued for every resignation. This requirement applies across all provinces, regardless of whether the employee is eligible for Employment Insurance (EI).
Employer Termination With Cause in Canada
Termination with cause allows an employer to end the employment relationship immediately when serious misconduct or other qualifying circumstances occur. Canadian law applies a high threshold for “cause,” and requirements may vary slightly by province.
Acceptable grounds
Termination with cause may apply in situations including:
-
Serious misconduct such as theft, fraud, violence, harassment, or willful neglect of duties
-
Repeated failure to perform job duties despite prior warnings
-
Breach of company policies or the employment contract that fundamentally undermines the employment relationship
-
Behavioral issues such as insubordination, serious violations of workplace discipline, or repeated absences
Province-specific terminology:
-
Quebec: Termination must be for “good and sufficient cause”
-
Nova Scotia: Termination must be for “just cause”
Other situations where cause may apply:
-
Disciplinary issues, including repeated absences, lateness, poor performance, or insubordination
-
Fixed-term employment where the employee works for a defined term or task not exceeding 12 months, and employment ends once the term or task is completed
-
Sudden lack of work caused by circumstances the employer could not avoid (for example, a workplace accident or explosion)
-
Offer of alternate employment where the employer provides the employee with other reasonable work
-
Retirement, where the employee has reached retirement age based on a bona fide occupational requirement
Notice
Form
Termination must be communicated in writing.
Notice period
When termination is for cause, the employer is not legally required to provide notice.
Payment in lieu of notice or notice waiver
Not applicable for termination with just cause.
End-of-Service Benefits
Severance
Employees terminated with cause are generally not entitled to severance pay under federal or provincial law.
Other Benefits
Final wages must still be paid, including unpaid salary, overtime, and accrued vacation pay. Other contractual benefits such as bonuses or stock options may be forfeited, depending on the terms of the employment agreement.
Termination Documentation
Employers must provide:
-
A written termination letter clearly stating the reason for dismissal
-
A Record of Employment (ROE) issued for Service Canada, with the reason code reflecting termination with cause
Employer Termination Without Cause in Canada
In Canada, employers may terminate employment without providing a specific reason, as long as all statutory notice and severance obligations are met. These terminations are typically formalized through a written termination letter and may also involve a Settlement Agreement and Release.
Acceptable Grounds
Termination without cause is generally permitted across Canada, except where provincial rules impose stricter protections.
Quebec: Employees with 2 or More Years of Seniority
Employees with at least two years of service may only be dismissed for just cause, and a warning is required. What qualifies as just cause depends on the specific circumstances of both the employee and the employer, and typically includes:
-
Disciplinary issues
-
Repeated absences or lateness
-
Negligence in performing work
-
Insubordination
Nova Scotia: Employees with 10 or More Years of Seniority
Employees with at least two years of service may only be dismissed for just cause, and a warning is required. What qualifies as just cause depends on the specific circumstances of both the employee and the employer, and typically includes: Expectations were clearly communicated to the employee
-
The employee was warned to improve behavior
-
The employee was given a reasonable opportunity to improve
-
The employee was warned that failure to improve could result in termination
Notice
Form
Written notice is required.
Notice period
-
Less than 3 months: no statutory minimum notice
-
3 months to less than 3 years: minimum 2 weeks
-
3 years or more: 3 weeks plus 1 additional week per completed year of service, up to a maximum of 8 weeks
Payment in lieu of notice or notice waiver
Employers may provide pay instead of requiring the employee to work the notice period. Employees may agree to waive notice if both parties mutually consent.
End-of-Service Benefits
Severance
Federally regulated employees with three or more years of service may be entitled to statutory severance pay under the Canada Labour Code.
In some provinces, such as Ontario, employees may also qualify for additional severance if they have at least five years of service and the employer meets minimum size thresholds.
Severance is typically calculated based on years of service and regular wages.
Other Benefits
-
Accrued vacation pay must be paid out
-
Outstanding wages, overtime, and contractual bonuses must be settled
-
Other contractual benefits apply if specified in the employment agreement
Termination Documentation
Employers must provide:
-
A written termination letter stating that the termination is without cause
-
A Record of Employment (ROE) issued for Service Canada, indicating the reason for separation
Mutual Termination Agreements in Canada
A mutual termination agreement allows both the employer and employee to voluntarily end the employment relationship on agreed terms. All conditions including notice, final payments, and post-employment obligations are negotiated and documented in writing.
Notice
Form
A written agreement signed by both parties is required.
Notice period
Determined by mutual agreement and may be shorter or longer than statutory minimums.
Waiver of notice
Parties may agree to waive notice, often in exchange for compensation or other benefits.
End-of-Service Benefits
Severance
Severance is determined by agreement between the employer and employee. It may include a lump-sum payment reflecting statutory severance, additional compensation, or other negotiated amounts. Severance is not mandatory if both parties agree to the terms.
Other benefits:
-
Accrued vacation pay must be paid
-
Outstanding wages, overtime, and contractual bonuses must be settled
-
Additional benefits such as bonuses, stock options, or continued health coverage may be included if agreed
Termination Documentation
Employers must provide:
-
A written mutual termination agreement detailing final payments, release of claims, confidentiality clauses, and any post-employment obligations
-
A Record of Employment (ROE) to enable Service Canada processing for Employment Insurance or other benefits
Offboarding Process for the End of Fixed-Term Contracts in Canada
If the Fixed-Term Contract Ends Normally
Notice
No statutory notice is required when a fixed-term contract expires on its agreed end date.
End-of-Service Benefits
Severance/Gratuity
- Severance is generally not required unless explicitly stated in the contract
- Accrued vacation pay must be paid
- Any other contractual benefits such as bonuses, health coverage, or stock options apply only if specified in the agreement
If the Employer Terminates Early
Notice
Early termination is treated as termination without cause unless the employee is dismissed for just cause.
Minimum statutory notice may also apply depending on service length and jurisdiction.
End-of-Service Benefits
Severance/Gratuity
Severance or termination pay may be required under federal or provincial law, in addition to any contractual entitlements
- Accrued vacation pay must be paid
- Outstanding salary, bonuses, and other contractual benefits must be settled
- Any agreed termination package, such as extended health benefits, must be honored
Final Payment Timing & Immigration and Visa Compliance in Canada
Final Payment Deadline
Employees must receive final wages including unpaid salary, accrued vacation pay, and contractual entitlements on the next scheduled payday or within the timeframe set by applicable provincial or federal law. Most jurisdictions require final payment within 7–10 days of termination.
Penalty:
Failure to pay final wages on time may result in fines or enforcement orders from labour standards authorities. Employees may file complaints to recover unpaid wages, and employers may be liable for interest or penalties.
Visa and Immigration Compliance
Employers must notify Immigration, Refugees and Citizenship Canada (IRCC) when a foreign worker’s employment ends, in line with the Temporary Foreign Worker Program or other work permit requirements. Because work authorization is tied to employment, termination may require the employee to leave Canada unless they secure a new work permit or change status.
Employers must also provide documentation such as a Record of Employment (ROE) to support Employment Insurance or immigration processes.
Supporting Guides
Frequently Asked Questions
Can I hire contractors instead of employees in Canada?
You can, but misclassification carries risks. If the working relationship includes supervision, set schedules, or company resources, structure it as an employment contract to avoid penalties and reclassification.
What are the notice and severance rules if I need to let someone go?
Notice depends on tenure: none required for under three months of service, two weeks for three months to three years, and three weeks plus one week per year of service beyond that (up to eight weeks maximum). Federally regulated employees with three or more years of service may qualify for statutory severance pay. Final wages, accrued vacation, and any severance must be paid on the next scheduled payday or within provincial deadlines (typically 7–10 days).
Do I need to set up a legal entity to hire in Canada?
Not if you use an Employer of Record like RemotePass. An EOR acts as the legal employer, handling payroll, compliance, and contracts while you manage day-to-day work.
What’s the minimum wage in Canada?
The federal minimum wage is CAD 17.30 per hour as of April 1, 2025, applying to federally regulated sectors. Provincial and territorial rates vary, ranging from CAD 15.00 to CAD 19.00 per hour, with the higher rate taking precedence.
What payroll cycle does Canada use?
Canada typically runs bi-weekly payroll (every 14 days), resulting in 26 pay periods per year. Some months include three paychecks because the 52-week calendar doesn’t align evenly with 12 months.
What happens to work permits when employment ends?
Employers must notify Immigration, Refugees and Citizenship Canada (IRCC) when a foreign worker’s employment ends. Work authorization is tied to employment, so termination may require the employee to leave Canada unless they secure a new work permit or change status. You must also provide a Record of Employment (ROE) to support Employment Insurance or immigration processes.
