Easily manage employment in Canada

Payroll services in Canada

Canada has a highly developed economy with key industries in technology, finance, healthcare, and natural resources. With specific labor laws and tax regulations, employers in Canada must ensure compliance with local payroll requirements, including social security contributions, employment contracts, and tax obligations. Understanding these regulations is essential for smooth payroll operations and legal compliance.

Payroll breakdown in Canada

Employers in Canada must adhere to national payroll regulations regarding wages, taxes, and social contributions. Below is an overview of key payroll components:

Minimum wage and working hours

• Minimum wage: Canada’s minimum wage varies by province and territory, ranging from CAD 14.00 to CAD 16.65 per hour.
• Payroll frequency: Salaries are generally paid biweekly or monthly.
• Standard working hours: The normal workweek in Canada is 40 hours, typically spread over five days.
• Overtime: Employees are entitled to additional pay for overtime work, generally calculated at 150% of the regular wage for extra hours, with some variations by province.

Taxation and social security contributions

• Personal income tax: Canada has a progressive income tax system with rates ranging from 15% to 33% at the federal level, plus additional provincial or territorial taxes.
• Employer contributions:
• Canada Pension Plan (CPP) or Quebec Pension Plan (QPP): 5.95% of the gross salary (up to a set maximum).
• Employment Insurance (EI): 2.28% of the gross salary (varies by province).
• Employee contributions:
• Canada Pension Plan (CPP) or Quebec Pension Plan (QPP): 5.95% of the gross salary (up to a set maximum).
• Employment Insurance (EI): 1.63% of the gross salary.
• Corporate tax: The corporate income tax rate in Canada varies by province but generally ranges from 15% to 31%.
• Tax reporting: Employers must file payroll taxes and contributions with the Canada Revenue Agency (CRA) and provincial tax authorities regularly.

Payroll compliance in Canada

• Employment contracts must be provided in writing and specify terms such as salary, working hours, and job responsibilities.
• Payroll deductions: Employers must ensure accurate deductions for social security, employment insurance, and income tax.
• Employers must stay updated on changes to Canada’s labor laws and tax regulations to avoid penalties.

Quick facts: Important considerations for employers

• Payroll frequency: Salaries are generally paid biweekly or monthly.
• Currency: Payroll in Canada is processed in Canadian Dollars (CAD).
• Tax reporting: Employers must file payroll taxes and contributions with the Canada Revenue Agency (CRA) and relevant provincial authorities.
• Payroll deductions: Employers must ensure accurate deductions for social security, employment insurance, and income tax.
• Payroll compliance: Employers must stay updated on changes to tax rates and reporting requirements.

Run payroll in Canada with Remote

Managing payroll in Canada requires careful attention to tax regulations, employment laws, and social security requirements. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be with Remote, book a demo today.