What to check when choosing an EOR provider in Canada
Provincial law turns a simple vendor choice into a set of specific checks. These questions separate a provider that can run your Canadian payroll every month from one that only says it can.
Figures that come up when you vet a provider
Choosing an EOR provider in Canada means checking four things: the provinces it can hire in, its depth in Quebec, the agency licences that apply to its model and how its price is built. Ask for each answer in writing, with the rates and registrations behind it.
Which provinces can the provider actually employ in?
Ask for the provinces in which the provider already runs payroll, and treat “all of Canada” as a claim to test. Employment standards, holidays, sick leave and termination rules are set province by province, and each province brings its own employer registrations and levies.
The differences appear quickly on paper. Ontario has 9 ESA public holidays, British Columbia 11, Alberta 9 general holidays and Quebec 8. Ontario employers pay the Employer Health Tax at up to 1.95% of payroll, while BC’s version applies only above CAD 1,000,000 of BC remuneration. Workplace insurance runs through WSIB in Ontario, WorkSafeBC and WCB-Alberta, and the 2026 average rates differ: CAD 1.23, CAD 1.55 and CAD 1.46 per CAD 100 respectively.
A provider with registered accounts in your hire’s province can say so plainly and name them. One without them will need time to register, and the start date should allow for that.
Remote hires sharpen the question. Tax withholding follows the province of employment, and for a home-based employee that is set by whichever of the employer’s establishments they are reasonably attached to. Ask how the provider decides this for someone working from home in a province where it has no establishment, and what it does when the person moves. A vague answer here tends to surface later as a payroll correction.
How do you test a provider’s Quebec capability?
Quebec is where a thin Canadian service shows first, because almost every payroll and employment rule there is different. Ask the provider to walk through a Quebec payslip line by line. It should show QPP contributions (to the Régime de rentes du Québec) of 6.30% from both parties in 2026, QPIP (Régime québécois d’assurance parentale) with the employer paying 0.602% and the employee 0.430%, the Quebec EI rate of CAD 1.30 per CAD 100 for the employee, and the employer’s Health Services Fund contribution.
Then ask about language. Since the Bill 96 amendments to the Charter of the French Language, French governs day-to-day communication between employer and staff, the written terms of work and any published vacancy. An English requirement survives only where the job needs it and only after other reasonable options have been exhausted; the advertisement must give the reason. A capable provider supplies French contracts, policies and payslips as a matter of course.
Registration thresholds grow with headcount. The registration threshold fell to 25 employees on 1 June 2025, so a business with 25 to 49 staff in Quebec now owes a registration to the French-language office (Office québécois de la langue française, or OQLF). Labour standards in Quebec are enforced by the CNESST, which also licenses personnel placement agencies.
Finally, ask about termination. Quebec notice runs from 1 week to 8 weeks by service, and staff with 2 years behind them can file a complaint over dismissal lacking just and sufficient cause, and they have 45 days to do it. Language duties get fuller treatment in what Bill 96 means for Quebec hiring.
Which agency licences should apply to the employer?
Ask which provincial agency licences the provider holds and where each one can be checked. Agency rules differ by province, and it falls to the provider to hold whichever licences its model requires. The main regimes are these:
- Ontario: since 1 July 2024, temporary help agencies and recruiters must be licensed, including businesses outside Ontario that assign workers there. The fee is CAD 1,500 from 1 January 2026, security of CAD 25,000 is required, licences last 2 years and a public registry lists holders.
- British Columbia: an employment agency that charges a fee to recruit for employers needs a CAD 100 licence. Whether a payroll-only arrangement recruits in this sense is not settled by official guidance.
- Alberta: businesses securing persons for employment need an employment agency business licence backed by a bond or security. How far it reaches into temporary staffing is not stated.
- Quebec: personnel placement agencies need a CNESST licence, with CAD 15,000 of security and a valid Revenu Québec certificate.
The Ontario rule reaches you directly. Clients are prohibited from knowingly engaging an unlicensed agency, and where the agency rules apply, a client can end up sharing liability with the agency for wages, overtime or holiday pay that go unpaid. The Ontario licensing guide sets out both points.
A licence check therefore protects your company as well as the employee. Keep the provider’s written answer on file with the services agreement.
Does the quote show every statutory cost?
A dependable quote lists each employer contribution on its own line, with the rate and ceiling used. For a 2026 Ontario hire, look for five lines: CPP (5.95% to the CAD 74,600 ceiling), CPP2 (4% on the next band to CAD 85,000), EI (2.282% to CAD 68,900), WSIB and the Employer Health Tax.
The last two lines deserve follow-up questions. EHT depends on the employer’s total Ontario payroll: 0.98% in the lowest band, 1.95% above CAD 400,000, and a CAD 1 million exemption only for eligible employers whose associated group has CAD 5 million or less of Ontario remuneration. WSIB depends on the rate class. Class L, covering professional, scientific and technical work, costs CAD 0.18 per CAD 100 of insurable earnings, against a 2026 average of CAD 1.23; on a CAD 85,000 salary that gap alone is CAD 892.50 a year.
CPP2 is the line most often missing from older cost models, because it applies only to the slice of earnings between the two ceilings. On a CAD 85,000 Ontario salary it adds CAD 416 for the employer and the same for the employee.
Ask too how currency is handled. When the fee is quoted in US dollars and payroll runs in Canadian dollars, find out which exchange rate sets each invoice and whether a margin is added to it. Over a year, a small margin on salary funding can outweigh a difference in headline fees.
How will the provider run payroll and fix mistakes?
Ask the provider to describe a normal pay cycle and a bad one. The normal cycle shows when you must send changes, when the employee is paid and when deductions reach the CRA: a regular remitter’s deadline is the 15th of the next month, and larger payrolls must remit two or even four times monthly. The bad cycle shows who notices an error and how quickly it is corrected.
Errors in Canadian payroll carry a direct cost. When an employer fails to withhold CPP, EI or tax, the CRA adds a 10% penalty, or 20% where failures repeat knowingly or through gross negligence, and the missing amounts and interest are owed as well. Ask whether the provider carries that cost when the mistake is its own, and get the answer into the agreement.
Check the year-end and exit routines too. Year-end T4 filings fall due at the end of February, and a departing employee’s Record of Employment should follow, normally within 5 calendar days of their earnings stopping. Ask for the provider’s own internal deadlines for both.
- the cut-off date each month for salary changes and new starters
- who the employee contacts about a payslip question, and in which hours
- how a missed or wrong pay is corrected before the next cycle
- whether you receive a payroll register with every invoice
Which pricing model suits a small Canadian team?
EOR providers usually price in one of two ways: a flat monthly fee per employee, or a percentage of each employee’s salary. A flat fee is easier to budget and stays put when pay rises. A percentage fee can look cheaper on junior salaries and grows with every raise and bonus.
Our own fee is from USD 560 a month per employee, fixed, which at the ECB reference rates of 24 September 2026 is about CAD 790.56. Salary and statutory employer costs are invoiced in addition to the fee, and a one-off set-up fee usually applies when a hire begins; we confirm it in your quote. On CAD 85,000 in Ontario, with EHT at 1.95%, WSIB Class L, vacation paid within salary and no benefits plan, the annual total including the fee is CAD 102,515.97.
Whatever model you compare, ask each provider to answer the same points in writing:
- any deposit held against salary and notice costs, and when it is returned
- charges for onboarding, contract changes or offboarding outside the monthly fee
- how notice pay and any severance are invoiced if a role ends
- the notice period for ending the service agreement itself
The fair comparison is the full annual cost per hire with every fee included, set against the service you receive for it. The pricing page shows how the fee sits beside the statutory lines, and our comparison of EOR providers for Canada covers the other points buyers weigh.
What should the service agreement say about exits and immigration?
The services agreement should say how employment endings are handled and who pays for each part. Ask how the provider drafts termination clauses, given that common-law reasonable notice can far exceed ESA minimums, and whether it reviews a planned dismissal with you before notice is given. Ontario’s ESA notice alone rises to 8 weeks after 8 years, and severance can add up to 26 weeks for an employer whose payroll is CAD 2.5 million or more.
The agreement should also leave you free to employ the person directly later. Ontario does not allow a temporary help agency to restrict its clients from hiring assignment employees themselves, and in Quebec an assignment cannot prevent hiring after 6 months. Outside those rules, a clause that makes it costly to move staff to your own corporation deserves a hard look before you sign.
Treat immigration offers with care. The Temporary Foreign Worker Program does not regard an agency recruiting for another business as an employer, so it cannot be the LMIA applicant, and intra-company transfer permits need a corporate relationship with your company. A provider that offers to sponsor either route for your hire should explain precisely how, in writing.
Ask to see the employment contract template the provider uses in your hire’s province, including its IP and confidentiality wording. If the model itself is new, what an employer of record does in Canada explains the split of duties, and the Employer of Record Canada home page describes the service.
Frequently asked
Q01Do I need to check an EOR provider’s licence for an Ontario hire?
Q02Can one EOR provider cover every Canadian province?
Q03What should a Quebec-ready provider be able to show me?
Q04Is a flat fee or a percentage-of-salary fee better value?
Q05Can I move an employee from the EOR to my own company later?
Put the licensing, Quebec and pricing questions to us first
Send the questions you plan to ask every provider on your shortlist. We will answer each one in writing for the province where you intend to hire.