You want to build a world-class team, and the best person for the job just might be north of the border. So, what does hiring in Canada as a U.S. company really involve, and how can you do it quickly, compliantly, and with confidence?
If you’re an HR professional, talent acquisition manager, Chief People Officer, or People Ops lead at a growing company, you already know: the world’s best talent doesn’t stop at your country’s edge. But crossing borders isn’t as simple as sending an offer letter. Let’s break down how U.S. companies can tap into Canada’s incredible workforce, without getting buried in red tape or compliance headaches.
Why U.S. Companies Are Hiring in Canada
Canada ticks nearly every box for U.S. businesses looking to grow globally. The country boasts a highly educated, diverse talent pool, business-friendly time zones, and a similar work culture. For many roles, you’ll find specialized skills and sometimes even cost savings. Plus, you’ll benefit from Canada’s thriving tech hubs (think Toronto, Vancouver, Montreal) and a workforce that’s as comfortable on Zoom as they are in a boardroom.
But let’s be honest: even the most seasoned HR leader can get tripped up by a new country’s employment laws. Canadian regulations are unique, different from U.S. standards, and even from province to province. The good news? With the right approach, hiring in Canada as a U.S. company can be seamless, scalable, and surprisingly fast.
The Three Main Ways to Hire in Canada as a U.S. Company
You’ve got options. Each comes with its own timeline, compliance requirements, and strategic implications. Here’s what you need to know:
1. Set Up a Canadian Entity
If you’re building a big, permanent presence in Canada, this is your power move. Setting up a subsidiary or branch office allows full control—but comes with its share of paperwork and ongoing obligations.
At a glance:
Timeline: Usually 2-3 months for full setup
Compliance: You handle all payroll, taxes, and benefits—federal and provincial
Best for: Companies planning to hire many employees or establish long-term operations
Reality check: This route is robust, but it’s not for everyone. Think of it as opening a new chapter, not just a page.
2. Use an Employer of Record (EOR)
Don’t want to set up shop in Canada? No problem. An Employer of Record (EOR) like Borderless AI lets you hire Canadian talent almost instantly, with full legal compliance, minus the administrative hassle.
Why EOR works:
Speed: Onboard new hires in 5-7 days
Simplicity: The EOR handles payroll, taxes, and benefits for you
Reduced risk: Legal employer responsibility sits with the EOR
Scalability: Easily hire across provinces with different regulations
Pro tip: Many U.S. companies (from scrappy startups to scaling enterprises) use EORs to test new markets or bridge the gap before opening a Canadian entity.
3. Engage Independent Contractors
For project-based work, engaging Canadian contractors can be efficient. But tread carefully, misclassification risks are real, and Canadian authorities take them seriously.
What to watch:
Classification tests: Canada uses control, integration, and economic reality tests, get these wrong, and fines can follow
Contracts: Your agreements must define work scope, payment, and IP ownership
Tax: Contractors handle their own taxes, but you may face GST/HST considerations
Bottom line: Great for freelancers and short-term needs, but not a shortcut for hiring full-time staff without compliance.
Canadian Payroll, Taxes, and What Makes Them Different
Hiring in Canada isn’t just about writing a paycheck. You’ll need to navigate a web of mandatory contributions, tax withholdings, and provincial quirks.
Canada Pension Plan (CPP) and Employment Insurance (EI)
CPP: Both employer and employee contribute 5.95% of earnings, up to an annual cap
EI: Employers pay about 2.21% (1.4x the employee’s premium)
Purpose: CPP funds retirement; EI provides support during job loss or parental leave
Your job: Withhold and remit both portions, on time, every pay cycle
Heads up: These are not the same as U.S. Social Security and unemployment insurance, rates and rules differ.
Income Tax Withholding
Registration: You'll need a Canada Revenue Agency (CRA) payroll account
Withholding: Amounts depend on the province of residence and income
Remittance: Monthly or quarterly, depending on payroll size
Year-end: File T4 slips for employees and the CRA
Simpler than it sounds: Unlike the U.S., federal and provincial taxes are withheld in one integrated process.
Provincial Health Levies
Some provinces (Ontario, Quebec) require employer health contributions; others don’t. These levies help fund Canada’s public healthcare system, so employees don’t expect—or need—private health insurance as a baseline.
Ontario Health Premium: Scaled to income
Quebec Health Services Fund: Tied to total payroll
No levies: In provinces like Alberta and BC
Budget tip: Factor these into your total cost of employment—they’re not one-size-fits-all.
Employees vs. Contractors in Canada: What’s the Real Difference?
Choosing between employees and contractors isn’t just a matter of paperwork; it impacts compliance, taxes, and your risk profile.
Worker Classification: Why It Matters
Canadian authorities look at how the work relationship really operates:
Control: Who decides how/when work is done?
Integration: Is the worker core to your business?
Economic Reality: Does the worker have their own tools/clients?
Get it wrong and you’re on the hook for: Back taxes, CPP/EI contributions, and possible penalties. Canadian courts often side with workers in misclassification disputes.
Tax and Withholding Differences
Employees: You withhold and remit taxes, CPP, EI
Contractors: They handle their own taxes, but may charge GST/HST
Permanent establishment risk: Long-term contractors could trigger Canadian corporate tax obligations
Insider tip: When in doubt, consult an expert or use an EOR, risk isn’t worth the “savings.”
Navigating Provincial Differences: One Country, Many Rules
Canada isn’t a regulatory monolith. Each province sets its own standards for pay, leave, and termination.
Minimum Wage and Overtime
Minimum wage: Varies from C$14.00 to C$16.75 per hour
Overtime: Usually after 40-44 hours/week, province-dependent
Record-keeping: Required for all hours and pay
Leave, Holidays, and Termination
Vacation: Minimum 2 weeks paid, rising with tenure
Holidays: 9-13 paid days, depending on the province
Parental leave: Job-protected, with EI benefits
Termination: Notice and severance rules by province
Translation: Don’t assume what works in Ontario works in BC. A one-size-fits-all policy won’t cut it.
The Real Benefits of Hiring Canadians as a U.S. Company
Here’s why so many U.S. companies are looking north:
Top-tier talent: Canada ranks among the global leaders in post-secondary education
Cultural fit: Business practices align closely with U.S. norms
Time zones: Overlap with major U.S. hubs for real-time collaboration
Healthcare savings: Public healthcare reduces your benefits burden
Exchange rate advantage: The U.S. dollar usually goes further
Diversity: Multilingual, globally minded professionals
Regional expertise: Tech, energy, finance, life sciences, Canadian cities have it all
How AI Automation is Revolutionizing Cross-Border Payroll
Gone are the days of clunky, 30-day international payroll cycles. Modern AI-native platforms (like Borderless AI) are changing the game.
Real-Time Payroll and Compliance
5-day payroll cycles: Automated tax calculations and real-time currency conversion
No salary deposits: Keep your capital working longer, no need to pre-fund payroll
Automatic compliance: Instantly updated for new laws and regulations
Seamless Onboarding
Automated employment contracts: Tailored for each province
Digital documentation: Collect and verify everything online
Secure identity verification: No paperwork pileups
Result: Onboarding shrinks from weeks to days, and your HR team gets their evenings back.
What Does It Really Cost to Hire in Canada?
Let’s talk numbers. Your total cost goes beyond base salary.
Salary and Benefits
Salary ranges: Software developers in Toronto earn C$80,000–120,000; marketing managers C$70,000–95,000
Mandatory benefits: At least 2 weeks’ paid vacation, statutory holidays, parental leave
City matters: Toronto and Vancouver command higher salaries than smaller cities
Employer Contributions
CPP: 5.95% of earnings (up to a cap)
EI: About 2.21% of earnings
Workers’ compensation: Varies by industry and province
Health levies: Only in some provinces
Total loaded cost: Expect employer contributions to add 15–20% to base salary.
Visa and Relocation: What If Your Canadian Hire Moves?
Work Permits and Remote Work
Remote in Canada: No U.S. visa required; Canadian laws apply
Moving to the U.S.: Canadians need proper work authorization (think: TN visa under USMCA, or others)
USMCA: Eases process for certain professional roles
Remote vs. In-Person
Remote (in Canada): Subject to Canadian employment law and taxes
In-person (U.S.): U.S. employment law takes over; work visa needed
Equipment: Consider remote setup and support for home offices
Experience Borderless AI: Hire in Canada Without Borders
Borderless AI was built for this exact challenge. We combine intelligent automation and deep expertise to help you hire in Canada, fast and fully compliant. Here’s what sets us apart:
5-7 day onboarding
No salary deposits required
Support for 90+ currencies
Automated compliance across all provinces
24/7 North America-based support
We believe talent is everywhere, even if opportunity isn’t. Our mission is to give every business the tools to hire globally, effortlessly and compliantly. At Borderless AI, we’re not just building software, we’re shaping the future of work without borders.
FAQs: Hiring in Canada as a U.S. Company
Can a U.S. company hire a Canadian citizen to work remotely from Canada?
Absolutely. You can hire Canadian citizens remotely without establishing a Canadian entity, use an Employer of Record or properly classify them as contractors.
How much does it cost for a U.S. company to hire Canadian employees?
Plan for the employee’s salary plus 15–20% for mandatory contributions (CPP, EI, health levies where relevant).
Do Canadian employees need work visas when working remotely for U.S. companies?
No visa needed if they’re working from Canada. If they relocate to the U.S., they’ll need the appropriate work authorization.
What are the tax implications for U.S. companies paying Canadian employees?
You must register for a CRA payroll account, withhold and remit Canadian income taxes, CPP, and EI—regardless of your U.S. status.
How do benefits requirements differ between U.S. and Canadian employment?
Canadian law mandates paid vacation, holidays, and parental leave. Healthcare is public, so employers usually aren’t expected to provide private insurance as a core benefit.
Ready to unlock global talent and build your borderless team? Get in touch with our team or explore how Borderless AI can help you hire in Canada—compliantly, confidently, and at the speed of your ambition.
At Borderless AI, we’re here to make global hiring simple, fair, and truly borderless for every company ready to think bigger.
