How the EOR process in Canada runs, from first quote to final pay

A quote starts from two facts you supply: the hire’s province of work and the gross annual salary. Those two inputs decide almost every other figure, because payroll rates, levies and employment standards are set province by province. Add the intended start date, the job title and any bonus or benefits you plan to offer, so they can be priced in from the outset.

The Ontario employer lines for 2026 are CPP (5.95%), CPP2 (4% of pay between CAD 74,600 and 85,000), EI (2.282%, capped at CAD 68,900 of insurable pay), a WSIB premium that depends on rate class, and the Employer Health Tax (EHT). In Quebec, QPP at 6.30%, QPIP at 0.602% for the employer and the Health Services Fund contribution replace or add to those lines.

A useful quote states its assumptions. Take a CAD 85,000 Ontario salary: with EHT taken at its 1.95% top rate and WSIB at the Class L premium of CAD 0.18 per CAD 100, the statutory employer cost is CAD 93,029.25 a year. The Employer of Record Canada fee is shown on its own line at USD 560 per employee per month.

Check the salary against the provincial minimum wage for the relevant dates. Ontario’s general rate is due to step up on 1 October 2026, from CAD 17.60 an hour to CAD 17.95. For hourly or part-time roles the rise can change the quote within weeks of the start date.

The offer confirms the job, salary, start date and province of employment, and it goes out in the employer of record’s name because the EOR will be the employer. You agree its content with the employer of record first, including any bonus, benefits and the probation arrangement, so nothing in it has to be renegotiated once the contract is drafted.

Ontario adds a written-information duty. Since 1 July 2025, Ontario has required employers of 25 or more people to hand each new starter a written note before day one. The note sets out the employer’s legal and operating names, contact details, roughly where the work happens, the starting wage, the pay period and pay day, and expected hours.

If the role was advertised publicly, Ontario’s 2026 job-posting rules, live since 1 January, apply to employers with 25 or more employees. The posting needs a pay figure, or a band spanning at most CAD 50,000, disclosure of any AI screening, a statement on whether a vacancy exists and no requirement for Canadian experience. Applicants who were interviewed must hear the outcome within 45 days.

For a Quebec hire, language comes first. Quebec’s Charte de la langue française (Charter of the French Language) makes French the language of the workplace: written communication with staff, working-condition documents and published job offers all have to be in French. An English requirement can appear only if the duties truly demand it, and the posting must say why.

Settle the candidate’s right to work before the offer is signed. The employer of record can employ citizens, permanent residents and people with open work permits, such as International Experience Canada Working Holiday holders. It cannot file an LMIA for your candidate, since the Temporary Foreign Worker Program leaves agencies recruiting on behalf of other firms outside its definition of an employer.

The employer of record issues the employment contract under the employment law of the hire’s province. Your input is the role description, the reporting line and the commercial clauses you rely on, such as confidentiality and how rights in the employee’s work reach your company. If the model is new to you, the employer of record explainer sets out who holds which duty.

Termination wording is where Canadian contracts most often fail. Under Ontario’s ESA, someone dismissed within 3 months of starting is owed no statutory notice, but a court may award common-law reasonable notice well past the ESA minimums unless a clause that complies with the ESA limits it. The probation clause and the termination clause both deserve careful drafting by the employer of record and a close read by you.

Working time also belongs in the contract. Ontario’s default limits are 8 hours in a day and 48 in a week; longer hours are possible only with the employee’s agreement in writing or electronic form, once they hold the Director’s information sheet. Hours past 44 in a week earn overtime at time and a half, although the overtime rule does not reach managers, supervisors or some IT and business consultants.

Restrictive covenants depend on the province. Non-competes agreed in Ontario since 25 October 2021 are banned for anyone below executive level, sale-of-business cases aside, so a contract for an Ontario engineer leans on confidentiality and non-solicitation wording.

The employee completes form TD1 for federal tax credits plus its provincial counterpart (TD1ON for an Ontario hire), so the employer of record can set income tax withholding correctly. Without them, payroll applies only the basic personal amounts, which for 2026 are CAD 16,452 federally and CAD 12,989 in Ontario.

The employer of record also records the province of employment. The CRA ties this to the place of business the employee reports to; someone working from home is linked to whichever establishment they are reasonably attached to. The answer decides which provincial tax table payroll uses from the first pay, so a home-based employee’s address alone does not settle it.

Alongside the tax forms, the employer of record collects the identity and bank details it needs to pay the person, and adds them to payroll under its own payroll program account (RP) with the CRA. Your company does not need a Canadian business number for this. In Ontario the employee must also receive the current ESA poster within 30 days of starting.

A hire in Quebec is set up with Revenu Québec as well as the CRA, since Quebec income tax, QPP and QPIP are collected by Revenu Québec. The employer of record handles both sets of registrations, and the employee’s onboarding pack comes in French.

On each pay the employer of record deducts the employee’s CPP at 5.95%, CPP2 at 4% on the relevant band, EI at 1.63% and income tax, calculated with the T4127 formulas from the CRA or T4032 tables. It adds its own employer contributions and pays the net salary into the employee’s account.

The deductions and employer amounts are then remitted to the CRA. For a regular remitter, the due date is the 15th of the following month. Larger employers remit more often: up to twice a month where average monthly withholding is CAD 25,000 to CAD 99,999.99, and up to four times a month at CAD 100,000 or more. The employer of record’s own total payroll decides which schedule it follows.

In Ontario the employer of record also accounts for EHT and the WSIB premium. For your hire these appear as lines on your invoice, and they are filed as part of the employer of record’s own returns.

Deductions change during the year because of the ceilings. Base CPP stops once earnings pass CAD 74,600 and EI once they pass CAD 68,900, while CPP2 applies between CAD 74,600 and CAD 85,000. A CAD 85,000 employee therefore sees a higher net pay late in the year than in January, and an invoice to you that falls in step. The mechanics are set out in running payroll in Canada.

Through the year the employer of record runs every payroll, keeps records and tracks leave under the rules of the employee’s province. In Ontario that means at least 2 weeks’ vacation with 4% vacation pay (3 weeks and 6% from 5 years), 9 ESA public holidays and 3 unpaid, job-protected sick days, and no medical note can be demanded for those days.

Changes in the law reach your employee through the employer of record’s payroll and policies. Ontario’s minimum wage rises on 1 October 2026. Where the employer counts 25 or more employees on 1 January, two written policies must exist by 1 March, one on switching off from work and one on electronic monitoring.

Your part is to report changes promptly: salary reviews, bonuses, leave requests and any move to a new home. A move to another province matters most, because a new province of employment changes the tax table used for withholding and can change the quote.

After year-end the employer of record prepares T4 slips and the T4 Summary before the February deadline, electronically whenever more than 5 slips are involved. The employee receives the T4 for their own tax return, and you receive nothing to file for this hire.

Outside Ontario the same yearly routine applies with different entitlements. A British Columbia employee gets 8 sick days once 90 days have passed, 5 of them paid, and 11 statutory holidays; a Quebec employee has 8 statutory holidays, including the Fête nationale on 24 June. The employer of record’s payroll calendar reflects whichever set applies.

An EOR employment ends like any other Canadian employment, with notice or pay in lieu unless the conduct is serious enough to remove the entitlement. You make the decision; the employer of record issues notice, pays the final salary and closes the file.

Ontario’s ESA scale starts at 1 week of notice for service under a year and 2 weeks between 1 and 3 years, then adds a week for each year to a ceiling of 8. Nothing is due inside the first 3 months, nor where the dismissal follows serious, deliberate misconduct of the kind the ESA describes. The employee’s benefits keep running until notice ends. After 5 years’ service, a separate severance payment can apply on top if the employer’s payroll reaches CAD 2.5 million: a week’s pay per year worked, capped at 26 weeks.

Common-law reasonable notice can be much larger than these minimums, so ask the employer of record to review the contract and the facts before any decision is shared with the employee. In Quebec, two years’ service opens a CNESST complaint route for anyone let go without what the law calls just and sufficient cause; the complaint window is 45 days, and the remedy can include getting the job back.

Once earnings stop, the employer of record files the Record of Employment on ROE Web, as a rule within 5 calendar days of pay stopping. Ending employment in Canada compares the notice rules by province, and the EOR services page lists what we cover at each stage.