G-P Logo
Request a proposal
Globalpedia

Payroll in CaCanada.

Population

39,858,480

Languages

1.

English

2.

French

Country Capital

Ottawa

Currency

Canadian dollar ($) (CAD)

Once you decide to expand into Canada, you must shift your focus to hiring local talent that will help expand your company’s reach. Entitlement and termination terms, taxation rules, and your different payroll options are all critical factors to consider before officially hiring an employee.

Taxation rules in Canada

Canada operates under a progressive tax system that varies by province. Each province has its own social security system and contribution rates, and all employees’ contributions are deducted from their paycheck every month. The top federal tax rate is 33%, and provincial rates vary from 4% to 21%.

Canada’s federal taxes include employee contributions to Employment Insurance and the Canada Pension Plan. Payroll taxations rules govern the maximum employer and employee contributions. The social security system also offers numerous child-related benefits such as the Universal Child Care Benefit, Fitness Tax Credit, and the Child Tax Benefit.

Canada payroll options for companies

Companies have a few different options when it comes to choosing a Canada payroll processing company:

  • Work with a local payroll administrator that acts as a payroll provider for your employees. As the employer, you are still held liable for any compensation errors, but you won’t have to worry about payments, filings, and other calculations.
  • Larger companies may decide to handle payroll internally themselves after they establish a subsidiary. This route requires a substantial amount of time and money to understand and adhere to Canada’s taxation and payroll laws.
  • Consider using a global EOR to directly employ your talent and manage payroll compliance. This allows you to skip local entity or subsidiary setup, so you can start paying your teams quickly and accurately with ease.

How to establish payroll in Canada

If you decide to run payroll yourself in Canada, you will have to set up a subsidiary first. Companies can choose to incorporate at the federal or provincial level.

Federal incorporation lets companies trade internationally and throughout any province in Canada. Provincial incorporation allows companies to trade internationally and only in the province in which it is incorporated. You’ll then need to get a Business Number (BN) from the federal government — or a Quebec Enterprise Number (NEQ) if you are incorporating in Quebec. Your number allows you to open a payroll program account with the Canada Revenue Agency.

Streamline global payroll management with G-P.

G-P streamlines each step of the payroll management process with our market-leading Global Growth Platform™. Pay your team with confidence anywhere in the world in 150+ currencies with our 99% on-time automated payroll system — all with just a few clicks. Our products also integrate with leading HCM solutions, syncing employee payroll data across platforms automatically to create one reliable, convenient source of truth for HR teams.

Contact us to learn more about how we can support you.

Disclaimer

THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.

Expand in
CaCanada.

Book a demo
Share This Guide