EOR.net.au
Employing in Canada
Canada appeals to Australian businesses that want a North American presence with a familiar Commonwealth legal tradition. Toronto, Vancouver and Montreal have strong technology, mining and financial services sectors.
The catch is termination. Statutory notice is short, but without a carefully drafted contract the courts can award common law reasonable notice of many months. Employment standards are also set province by province. An EOR provides compliant, locally drafted contracts from day one.
Why Australian businesses go there
- Commonwealth legal tradition and shared language
- Access to the North American market
- Strong mining, technology and finance sectors
- International Experience Canada for Australians aged 18 to 35
What to watch
- Employment standards differ by province and territory
- Common law reasonable notice can far exceed statutory minimums without a good contract
- Ontario has banned non-competes for most employees
- Quebec has its own pension plan and language requirements
Hiring and contracts
- Employment contracts
- Provincial employment standards cover most employees, while federally regulated sectors such as banking, telecoms and interprovincial transport fall under the Canada Labour Code. Written contracts are optional but matter a great deal for keeping termination costs down.
- Probation
- There is usually no statutory probation, but many statutes remove the notice requirement early in employment. In Ontario, for example, no statutory notice is owed in the first 3 months.
- Working hours
- Rules depend on the jurisdiction. The Canada Labour Code sets standard hours at 8 a day and 40 a week, while in Ontario overtime begins after 44 hours a week.
- Minimum wage
- Federally regulated employers must pay at least C$18.15 an hour from 1 April 2026. Provinces and territories set their own rates, and the higher one applies.
Leave and holidays
- Annual leave
- Typically 2 weeks after 1 year of service, increasing with service. Federally it reaches 3 weeks after 5 years and 4 weeks after 10 years, and provinces differ.
- Sick leave
- Federally regulated employees can take up to 10 days of paid medical leave a year. Provincial rules range from unpaid days to a small number of paid days.
- Parental leave
- Maternity and parental leave are job-protected, and income support comes from Employment Insurance rather than the employer.
- Public holidays
- Federally regulated employees have 10 general holidays, and each province and territory sets its own list.
Employer costs
- Retirement and social security
- In 2026 the Canada Pension Plan takes 5.95% from both employer and employee on earnings up to C$74,600. A second tier, CPP2, adds 4% from each side on earnings between that figure and C$85,000. In Quebec the QPP replaces the CPP.
- Payroll taxes
- Income tax is withheld by the employer, which also pays Employment Insurance premiums equal to 1.4 times what the employee pays. A few provinces charge an extra payroll or health tax.
- Mandatory benefits
- CPP or QPP, Employment Insurance, workers' compensation and statutory leave, with core medical care covered by provincial health systems.
Ending employment
- Notice periods
- Statutory minimums are brief, such as 1 to 8 weeks in Ontario. Without a carefully drafted contract, though, courts award common law reasonable notice that can reach 24 months for senior staff with long service.
- Dismissal protection
- Employers may dismiss without cause if they give notice or pay instead. Federally regulated non-managers are protected from unjust dismissal after 12 months, and Quebec protects employees after 2 years.
- Severance
- Some jurisdictions require statutory severance as well as notice. In Ontario, larger employers must pay 1 week per year of service, up to 26 weeks.
Contract terms and visas
- IP and restraint clauses
- Canadian courts take a strict view of non-competes, and since October 2021 Ontario has banned them for most employees. Confidentiality and non-solicitation terms are safer to rely on.
- Visas and right to work
- A work permit is needed for most people who are not citizens or permanent residents, frequently supported by a Labour Market Impact Assessment. International Experience Canada is open to Australians aged 18 to 35.
Compared with Australia
| Canada | Australia | |
|---|---|---|
| Annual leave | Typically 2 weeks after 1 year of service, increasing with service. Federally it reaches 3 weeks after 5 years and 4 weeks after 10 years, and provinces differ. | Full-time employees get 4 weeks of paid annual leave a year (5 weeks for some shift workers), built up progressively. Unused leave is paid out when employment ends, and many awards add 17.5% leave loading. |
| Sick leave | Federally regulated employees can take up to 10 days of paid medical leave a year. Provincial rules range from unpaid days to a small number of paid days. | Full-time employees get 10 days of paid personal/carer's leave a year, plus 2 days of unpaid carer's leave and 2 days of paid compassionate leave per occasion. Every employee can also take 10 days of paid family and domestic violence leave a year. |
| Notice | Statutory minimums are brief, such as 1 to 8 weeks in Ontario. Without a carefully drafted contract, though, courts award common law reasonable notice that can reach 24 months for senior staff with long service. | Under the National Employment Standards an employer gives 1 week of notice for up to 1 year of service, rising to 4 weeks for more than 5 years, plus an extra week for employees over 45 with at least 2 years of service. Pay in lieu is allowed, and awards set the notice employees must give. |
| Retirement and social security | In 2026 the Canada Pension Plan takes 5.95% from both employer and employee on earnings up to C$74,600. A second tier, CPP2, adds 4% from each side on earnings between that figure and C$85,000. In Quebec the QPP replaces the CPP. | On top of wages, employers pay the Superannuation Guarantee at 12% of qualifying earnings. Payday Super has applied since 1 July 2026, so contributions go out with each pay and must arrive in the fund within 7 business days. Australia has no separate employer social security levy. |
| Dismissal protection | Employers may dismiss without cause if they give notice or pay instead. Federally regulated non-managers are protected from unjust dismissal after 12 months, and Quebec protects employees after 2 years. | After the minimum employment period, employees can claim unfair dismissal if an award or agreement covers them or they earn under the high income threshold, $190,100 from 1 July 2026. Protection against adverse action under the general protections starts on day one, and small businesses may rely on the Small Business Fair Dismissal Code. |
Frequently asked questions
How much notice do I have to give in Canada?
Statutory minimums are short, such as 1 to 8 weeks in Ontario. Without an enforceable termination clause, courts can award common law notice of up to around 24 months for long-serving senior staff.
Who pays parental leave in Canada?
Maternity and parental leave are job-protected, and income support is paid through Employment Insurance rather than by the employer.
Does each province have different rules?
Yes. Most employees are covered by provincial employment standards. Only federally regulated industries follow the Canada Labour Code.
