Employer of record in Canada: the real cost in 2026

EOR, own company or contractor?

There are three ways to work with someone in Canada. Each one fits a different case.

Employer of record

The EOR employs the person for you and runs the payroll. You need no Canadian company. This suits one or a few employees, or a first test of the market.

Your own Canadian company

You can incorporate a federal company online with Corporations Canada for CA$200. The company must also register in each province where it does business. It needs a CRA business number and a payroll program account before its first payroll remittance is due.Corporations Canada, fees, Corporations Canada, register in a province, CRA, employers' guide T4001Checked 1 Oct 2026

Contractor

A contractor sends you invoices. The CRA looks at the whole working relationship in two steps. First, it asks what both sides intended. Then it looks at control, tools and equipment, helpers, financial risk, investment and the chance of profit. In Quebec, the CRA applies the Civil Code instead: it looks at the work, the pay and the relationship of subordination.CRA, employee or self-employed (RC4110)Checked 1 Oct 2026

When you are not sure, you or the worker can ask the CRA for a ruling on form CPT1.

Sources: CRA, employee or self-employed (RC4110)Checked 1 Oct 2026

Federal or provincial rules?

In Canada, the province where the employee works sets most employment rules. The federal Canada Labour Code covers only federal sectors, such as banks, air transport, telecoms, and postal and courier services. These sectors employ about 6% of Canadian workers.

This guide covers the provincial rules of Ontario, British Columbia, Alberta and Quebec.

Sources: Government of Canada, federally regulated industries, Government of Canada, rights in the workplaceChecked 1 Oct 2026

Agency licences

An EOR is the legal employer, but the person works for you. Some provinces license businesses that employ people to work for their clients.

Ontario

Since 1 July 2024, temporary help agencies need a licence under the Employment Standards Act, 2000. The Act defines a temporary help agency as an employer that employs people to assign them to work on a temporary basis for its clients.Ontario, licensing temporary help agencies, Employment Standards Act, 2000 (Ontario), section 1Checked 1 Oct 2026

Quebec

Since 1 January 2020, a business that offers staff leasing services needs a licence from the CNESST, the province's labour standards body. The licence fee is CA$1,087.CNESST, the licence obligation, Government of Quebec, 27 Nov 2019Checked 1 Oct 2026

Alberta and British Columbia

Alberta licenses employment agency businesses, which find jobs for people or people for jobs. British Columbia licenses agencies that charge a fee to recruit employees. Their pages do not say if an EOR needs these licences.Alberta, employment agency licence, British Columbia, licensing employment agenciesChecked 1 Oct 2026

Ask each provider these questions before you sign:

• Do you, or your partner, hold an agency licence in the province of the hire?
• If not, why do you think that the licence does not apply?

These rules are complex. Ask a lawyer how they apply to your case.

Employment rules by province

Minimum wage

On 1 October 2026: CA$17.95 an hour in Ontario (since 1 October 2026), CA$18.25 in British Columbia (since 1 June 2026), CA$15 in Alberta (since 1 October 2018) and CA$16.60 in Quebec (since 1 May 2026). In federal sectors, the rate is CA$18.15 (since 1 April 2026).Ontario, minimum wage, British Columbia, minimum wage, Alberta, minimum wage, Government of Quebec, 1 May 2026, Government of Canada, 24 Mar 2026Checked 1 Oct 2026

Vacation

Ontario: 2 weeks with 4% vacation pay, and 3 weeks with 6% after 5 years. British Columbia and Alberta: 2 weeks with 4% after 1 year, and 3 weeks with 6% after 5 years. Quebec: 1 day for each full month in the first year, 2 weeks with 4% after 1 year, and 3 weeks with 6% after 3 years.Ontario, vacation, British Columbia, vacation, Alberta, vacation pay, CNESST, length of vacation, CNESST, vacation payChecked 1 Oct 2026

Public holidays

Ontario has 9 public holidays, and Alberta has 9 general holidays. British Columbia lists 11 statutory holidays for 2026. Quebec has 8.Ontario, public holidays, British Columbia, statutory holidays, Alberta, general holidays, CNESST, statutory holidaysChecked 1 Oct 2026

Notice of termination

After 3 months of work, the employer must give at least 1 week of notice in all 4 provinces. The notice grows with service, up to 8 weeks: after 8 years in Ontario and British Columbia, and after 10 years in Alberta and Quebec.Ontario, termination of employment, British Columbia, quitting and firing, Alberta, termination and lay-off, CNESST, notice of terminationChecked 1 Oct 2026

Severance pay in Ontario

An employee with 5 or more years of service gets severance pay when the employer has a global payroll of at least CA$2.5 million. It is 1 week of pay for each year of service, up to 26 weeks.Ontario, severance payChecked 1 Oct 2026

Common law

These are minimums. Ontario's guide says that some employees have rights under the common law to more notice than the Act gives. Alberta says that the common law, not its Code, decides severance pay.Ontario, termination of employment, Alberta, termination and lay-offChecked 1 Oct 2026

Payroll and taxes

The employer, or the EOR, takes income tax, CPP contributions and EI premiums out of each payment and sends them to the CRA. A non-resident employer has the same duties to withhold, remit and report as a Canadian employer.

The employee pays the same CPP rates as the employer: 5.95%, and 4% for CPP2. The employee's EI rate is 1.63%, and the employer pays 1.4 times the employee's premium: 2.282%.

For employees in Quebec, the employer also registers with Revenu Québec. The QPP rate is 6.3% for each side. The EI rate is 1.3% for the employee and 1.82% for the employer. The employer also pays 0.602% for parental insurance (QPIP) on pay up to CA$103,000.

Large employers also pay a provincial payroll tax. Alberta has none.

• Ontario: 1.95% Employer Health Tax when the Ontario payroll is over CA$400,000. An eligible employer pays no tax on the first CA$1 million, but only when its Ontario payroll is under CA$5 million.
• British Columbia: no Employer Health Tax on a BC payroll of CA$1 million or less, and 1.95% on all BC pay above CA$1.5 million.
• Quebec: the Health Services Fund costs from 1.65% to 4.26%, by the employer's total payroll. The total includes associated employers, in Quebec or elsewhere. The top rate starts at CA$7.8 million.
• Quebec: an employer with a total payroll over CA$2 million must also spend 1% of it on training, or pay the difference to a fund.

Sources: CRA, employers' guide T4001, Canada Revenue Agency, CPP rates and maximums, Canada Revenue Agency, EI premium rates and maximums, Revenu Québec, registering for source deductions, Revenu Québec, principal changes for 2026, Ontario, Employer Health Tax, British Columbia, Employer Health Tax, Revenu Québec, total payroll for the Health Services Fund, Revenu Québec, workforce skills development, Alberta, moving to AlbertaChecked 1 Oct 2026

Benefits

The law requires the CPP or QPP, EI, vacation pay and public holidays that this guide describes. In Quebec, the parental insurance plan (QPIP) also applies.

Each province also has a workers' compensation board. The employer pays a premium that depends on the industry, up to a yearly maximum of insurable pay. The 2026 averages are:

• Ontario (WSIB): CA$1.23 for each CA$100 of pay, up to CA$121,700.
• British Columbia (WorkSafeBC): CA$1.55 for each CA$100, up to CA$127,500.
• Alberta (WCB): CA$1.46 for each CA$100, up to CA$110,900.
• Quebec (CNESST): CA$1.54 for each CA$100, up to CA$103,000.

Other benefits, such as extended health insurance or a group retirement plan, depend on the contract.

Sources: WSIB, 2026 premium rates, WorkSafeBC, 2026 rates, WorkSafeBC, maximum wage rates, WCB Alberta, rate setting, WCB Alberta, maximum earnings (PDF), Government of Quebec, CNESST rate for 2026, Government of Quebec, 2026 deductions (PDF)Checked 1 Oct 2026

How hiring through an EOR works

1. Compare providers and ask for quotesAsk for the monthly fee in Canada, the deposit, the exchange rate and the notice period of the EOR contract. Ask about the agency licence in the province of the hire.
2. Agree the employment termsAgree the salary, the start date, the vacation and the notice period with the candidate.
3. The EOR signs the contractThe EOR becomes the legal employer. It follows the employment rules of the province where the employee works.
4. The EOR runs the payrollEach pay period, the EOR pays the salary and takes out the income tax, the CPP or QPP contributions and the EI premiums. It sends them to the CRA, and to Revenu Québec for employees in Quebec.
5. You manage the daily workYou set the tasks and the goals. The EOR handles the employment administration.

Sources: CRA, employers' guide T4001, Revenu Québec, registering for source deductionsChecked 1 Oct 2026