PEO in Canada: what a US company can use

Can a US PEO cover staff in Canada?

A US professional employer organisation (PEO) works with your own company. Under US federal tax law, your company generally stays the employer. This shared model is called co-employment.

We checked what 6 US providers say about their PEO, on their own pages:

ADP TotalSource

ADP says that its PEO covers all 50 US states. Its FAQ says that PEOs support US employees and EORs support international employment. The page names no EOR for Canada.ADP, ADP TotalSource PEOChecked 19 Oct 2026

Deel

Deel says that its PEO is for companies with employees in the US and a US company. Its guide on Canada says that the co-employment model of a PEO exists only in the US. The guide points to an EOR or an administrative services organisation (ASO) instead.Deel, US PEO services, Deel, using a PEO in Canada (10 Jun 2026)Checked 19 Oct 2026

Justworks

Justworks sells its PEO plans for "US Teams". Its help centre says that a PEO suits businesses that operate in the US. Justworks EOR lists Canada as one of its countries.Justworks, pricing, Justworks, foundations of global hiring, Justworks, EOR key featuresChecked 19 Oct 2026

Remote

Remote says that its PEO is for employees across the US, in all 50 states. Remote's EOR covers Canada.Remote, PEO (US)Checked 19 Oct 2026

Rippling

Rippling says that co-employment is a US model, so a PEO cannot support hiring abroad. Rippling's EOR covers Canada.Rippling, PEO vs EOR (18 Sep 2026), Rippling, hiring employees in CanadaChecked 19 Oct 2026

TriNet

TriNet's annual report for 2025 says that it supports its clients' employees outside the US through international EOR partners. TriNet offers global services through Multiplier, under a separate agreement.TriNet, annual report 2025 (SEC form 10-K), TriNet, PEO capabilitiesChecked 19 Oct 2026

None of the 6 says that its PEO covers staff in Canada. For an employee in Canada, you need one of the other options in this guide. Read the difference between an EOR and a PEO.

Sources: IRS, Third party payer arrangements: professional employer organizationsChecked 4 Oct 2026

What "PEO" means in Canada

Some Canadian providers use the name "PEO" for two different services. Ask each one who is the legal employer.

Payroll administration

Your company stays the employer. The provider runs the payroll, the remittances and the year-end reporting for you. PEO Canada calls itself an administrative services organisation (ASO) and a third-party administrator, not a traditional PEO or EOR. It says that your employees stay employed by your business.PEO Canada, what we do, PEO Canada, FAQsChecked 19 Oct 2026

Employer of record

The provider, or its partner, employs the person for you. Papaya Global sells a "Canadian PEO service". It says that its local partners formally hire the employees.Papaya Global, Canadian PEO serviceChecked 19 Oct 2026

The name of the service does not decide who the employer is. In a 1997 case, the Supreme Court of Canada looked at which party had the most control over the work. It looked at selection, hiring, training, discipline, evaluation, supervision, duties, pay and integration into the business. It also said that each labour law can point to a different employer.

Ontario's workers' compensation board (WSIB) gives an example. A payroll service can complete the T4 slips for its clients. If it does not supervise their workers, it is not their employer.

So with payroll administration, your company has the duties of an employer in Canada. The provider does the work for you. With an EOR, the provider has these duties. Read what providers mean by a global PEO.

Sources: Supreme Court of Canada, Pointe-Claire (City) v. Quebec, 1997, WSIB, registration policy 14-02-02Checked 19 Oct 2026

Your options compared

A contractor must really work for themselves. The CRA looks at the whole working relationship, not at the name of the contract. Read how a contractor of record works.

Sources: CRA, employers' guide T4001, CRA, register as a non-resident doing business in Canada, Revenu Québec, registering for source deductions, Corporations Canada, fees, Corporations Canada, register in a province, PEO Canada, what we do, Papaya Global, Canadian PEO serviceChecked 19 Oct 2026

What each option costs

In 2026, the all-in EOR cost of a CA$90,000 gross salary in Canada is CA$101,322 to CA$109,314 a year. This is the salary, the employer costs and the provider fee. See the calculation and its sources.

The published EOR fees in Canada are CA$279 to CA$945 a month for each employee. 11 of the 12 providers in our table publish a price. Compare the providers in Canada.

The law sets the rates of the Canada Pension Plan (CPP) and Employment Insurance (EI). They are the same in every option. Workers' compensation and the provincial payroll tax depend on the employer.

With an EOR, the EOR is the employer, so the payroll tax depends on its payroll, not on yours. Our calculator includes the tax of a large employer by default.

With your own payroll, Ontario and British Columbia tax the pay only if you have a permanent establishment there. In British Columbia, employers with BC pay of CA$1 million or less generally pay no tax.

Your own 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.

Sources: Canada Revenue Agency, CPP rates and maximums, Canada Revenue Agency, CPP2 rates and maximums, Canada Revenue Agency, EI premium rates and maximums, Ontario, Employer Health Tax, Boundless pricing, Remote pricing, European Central Bank, British Columbia, Employer Health Tax, Ontario, EHT and permanent establishment, British Columbia, EHT and BC remuneration, British Columbia, EHT questions, Corporations Canada, fees, Corporations Canada, register in a province, CRA, employers' guide T4001Checked 19 Oct 2026

Run your own payroll without a Canadian company

A business outside Canada with employees in Canada has the same payroll duties as a Canadian employer. A payroll company or an ASO can do the work, but your company stays the employer.

1. Register with the CRAGet a business number and a payroll program account, online or on form RC1. You need no Canadian company. Register before your first remittance is due.
2. Withhold, remit and reportEach pay period, take out the income tax, the CPP and the EI, and send them to the CRA. Without a Canadian bank account, you can pay by wire transfer in Canadian dollars.
3. Register in Quebec, if the employee works thereRegister with Revenu Québec for the Quebec source deductions.
4. Register for workers' compensationRegister with the board of the province of work, if your industry is covered. The rules differ by province.
5. Check the provincial payroll taxIn Ontario and British Columbia, the tax applies when you have a permanent establishment in the province.
6. Write in French for QuebecIn Quebec, write the employment contract and the job offers in French. The parties can choose another language only at their express wish.
7. Follow the employment standardsThe province of work sets the minimum wage, the vacation, the public holidays and the notice.

The rules for workers' compensation and the payroll tax differ by province:

Workers' compensation in Ontario

Employers from outside Ontario must register when they employ Ontario residents in a covered industry. They have 10 calendar days from the start of the first worker. Many office industries are optional, such as software services and IT consulting.WSIB, registration policy 14-02-02, O. Reg. 175/98 (Ontario), Schedule 1, Part IIChecked 19 Oct 2026

Workers' compensation in British Columbia

A business from outside the province may need cover when it hires BC workers to work in BC.WorkSafeBC, businesses from outside BCChecked 19 Oct 2026

Workers' compensation in Alberta

An employer in a covered industry must open an account within 15 days of the first hire. Many office industries are exempt, such as consulting and legal services. The pages do not say how this applies to an employer from outside Alberta.WCB Alberta, worker coverage, WCB Alberta, exempt industriesChecked 19 Oct 2026

Payroll tax in Ontario

The tax applies to employees who report for work at your permanent establishment in Ontario, or are paid through it. An employee's home office is generally not a permanent establishment. But an employee in Ontario with general authority to sign contracts for you can create one.Ontario, EHT and permanent establishment, Ontario, Employer Health TaxChecked 19 Oct 2026

Payroll tax in British Columbia

The same test of a permanent establishment applies. Where your employees live does not matter. Employers with BC pay of CA$1 million or less generally pay no tax.British Columbia, EHT and BC remuneration, British Columbia, EHT questionsChecked 19 Oct 2026

Staff in Canada can also create a permanent establishment for your company under the Canada-US tax treaty. One case is a fixed place of business. Another is a person who habitually concludes contracts in your company's name. This depends on what the person does, so it can happen with an EOR too. Read how staff abroad can create a permanent establishment.

The Canada guide shows the employment rules of Ontario, British Columbia, Alberta and Quebec. See the employment rules by province.

Sources: CRA, employers' guide T4001, CRA, register as a non-resident doing business in Canada, Revenu Québec, registering for source deductions, CRA, form RC1, CRA, wire transfers for non-residents, Office québécois de la langue française, the Charter changes, Quebec, S.Q. 2022, c. 14, section 29 (PDF), Department of Finance, Canada-US tax convention, Article VChecked 19 Oct 2026

Questions to ask a Canadian PEO or EOR

1. Who signs the employment contract?Your company, the provider or its partner. This decides who the employer is, and who must register with the CRA.
2. Own Canadian company or partner?In our table, 4 of 12 providers say that they employ people through their own Canadian company. 2 say that they use a partner. The others do not say.
3. Do you hold an agency licence?Ontario licenses temporary help agencies, and Quebec licenses staff leasing agencies. 1 of 12 providers says that it, or its partner, holds the licence.
4. Is the contract in French for Quebec?Quebec asks for the employment contract in French, unless the parties expressly choose another language.
5. What does it cost to end the employment?The law sets the minimum notice. Courts can award more under the common law. Ask who pays it.
6. What is the all-in cost?Ask for the fee, the deposit, any set-up fee and the exchange rate.

Our guide on the risks shows what to check in the contract. Read how to check an EOR provider before you sign.

Sources: Deel blog, 4 Aug 2026, Remote Canada page, Playroll blog, 15 Dec 2025, Multiplier Canada page, Papaya Global Canada page, WorkMotion Canada page, Ontario, licensing temporary help agencies, Employment Standards Act, 2000 (Ontario), section 1, CNESST, the licence obligation, Government of Quebec, 27 Nov 2019, Boundless Canada guide, Office québécois de la langue française, the Charter changes, Ontario, termination of employment, Alberta, termination and lay-offChecked 19 Oct 2026