What it really costs, EOR vs contractor vs entity, and how the timezone math works out
Hiring a full-time employee in Canada costs employers roughly 7–12% on top of gross salary in mandatory employer contributions, plus an EOR platform fee of $400–$699/month if you hire without a local entity. Canada sits in UTC−5, giving roughly 8 hours of workday overlap with US East Coast teams.
Employer cost
+7–12%
on gross salary
EOR fee
$400–699/mo
published list prices
Currency
CAD
Local payroll currency
Infrastructure
excellent internet
High cost of living
Mandatory employer contributions in Canada add roughly 7–12% on top of gross salary, before the EOR platform fee. This is the statutory structure — a vendor quote for your exact salary is always authoritative.
| Employer contribution | Rate |
|---|---|
| CPP (employer, matches employee) | 5.95% on $3,500–$74,600 |
| CPP2 (employer) | 4% on $74,600–$85,000 |
| EI (employer, 1.4× employee 1.63%) | ~2.28% up to $68,900 |
| Ontario Employer Health Tax (EHT) | up to 1.95% (only on payroll above $1M exemption) |
| Total statutory employer cost | ≈ 7–12% of gross salary |
Canada's federal employer contributions are FLAT-DOLLAR-CAPPED, so the % shrinks as salary rises: employer CPP 5.95% (matches employee) on earnings $3,500–$74,600 (max ~$4,230/yr), CPP2 4% on $74,600–$85,000 (max $416), and EI at 1.4× the employee rate — employee 1.63%, so employer ~2.28% up to $68,900 insurable (max employer premium $1,572.30). For a ~$75k+ developer those three sum to ~8% and fall further above the ceilings. Range top adds provincial payroll tax — Ontario EHT up to 1.95%, but ONLY on payroll above the $1M exemption (small employers pay $0) — and workers-comp (WSIB, province/industry-rated, ~0.5-2% for office work), which is EXCLUDED from the headline components. Provincial variation is large: Quebec (QPP/QPIP/HSF) runs higher; several provinces levy no payroll tax.
Source: RN Canada — CPP/CPP2/EI 2026 , retrieved 2026-07-08. How we verify numbers: methodology.
Annual employer cost via an EOR, using the sourced contribution range and published platform fees ($400–$699/mo).
| Gross salary | $60,000 |
| Statutory employer contributions (7–12%) | $4,200–$7,200 |
| EOR platform fee (12 months) | $4,800–$8,388 |
| Total annual employer cost | $69,000–$75,588 |
Rough annual employer cost = gross salary + mandatory employer contributions (a range) + the EOR platform fee. This is a structure, not a quote — a vendor quote for your exact country and salary is always authoritative.
Estimated total annual employer cost
—
Gross salary
—
Statutory employer cost
—
EOR platform fee
—
Statutory ranges are approximate mandatory employer contributions, each verified against a fetched primary source (PwC Worldwide Tax Summaries, government pages, or EOR provider guides — retrieved July 2026) and excluding one-off items (13th-month pay, 14-payment structures, salary caps), which are flagged per country above. Platform fees are list prices verified 2026-07-08. See our methodology for how these are sourced.
Hours a 9–5 workday in Canada (UTC−5) overlaps a 9–5 day in common hiring hubs. DST can shift these by an hour.
The right structure depends on how permanent the role is — full framework in our EOR vs contractor vs employee guide.
An EOR is the legal employer in Canada on your behalf — it runs compliant payroll, benefits, and contracts while the person works for you day-to-day. Typical platform pricing is a flat monthly fee per employee. This is the standard route when you don't have an entity in Canada and want a full employee rather than a contractor.
Best for: Full-time hires, no local entity, started in days not months
The person invoices you as a self-employed contractor. Lighter and cheaper to set up, but misclassification — treating someone like an employee while paying them as a contractor — carries real penalties in most jurisdictions. The longer and more exclusive the engagement, the weaker the contractor argument gets.
Best for: Project work, part-time engagements, genuinely independent professionals
Incorporating in Canada gives you full control and is usually cheapest per-employee at scale, but expect months of setup, local accounting, and ongoing filings. Rarely worth it below roughly five hires in one country.
Best for: Committed long-term presence, 5+ employees in-country
All three are established global platforms — compare quotes for Canada specifically, since per-country pricing and benefits packages differ.
Independent picks. If a partner link is active we may earn a commission at no cost to you.
Mandatory employer contributions in Canada run roughly 7–12% on top of gross salary. On a $60,000 salary that is about $4,200–$7,200 per year in statutory costs, plus an EOR platform fee of $400–$699/month ($4,800–$8,388/year) if you hire without a local entity — an all-in total of roughly $69,000–$75,588. Canada's federal employer contributions are FLAT-DOLLAR-CAPPED, so the % shrinks as salary rises: employer CPP 5.95% (matches employee) on earnings $3,500–$74,600 (max ~$4,230/yr), CPP2 4% on $74,600–$85,000 (max $416), and EI at 1.4× the employee rate — employee 1.63%, so employer ~2.28% up to $68,900 insurable (max employer premium $1,572.30). For a ~$75k+ developer those three sum to ~8% and fall further above the ceilings. Range top adds provincial payroll tax — Ontario EHT up to 1.95%, but ONLY on payroll above the $1M exemption (small employers pay $0) — and workers-comp (WSIB, province/industry-rated, ~0.5-2% for office work), which is EXCLUDED from the headline components. Provincial variation is large: Quebec (QPP/QPIP/HSF) runs higher; several provinces levy no payroll tax.
No. An Employer of Record (EOR) already has a legal entity in Canada and employs the person on your behalf — running compliant payroll, benefits, and contracts — while they work for you day-to-day. Opening your own entity usually only makes sense once you commit to roughly five or more hires in the country.
For an ongoing, full-time role that you direct, an EOR is the structurally safer default — most jurisdictions treat that working relationship as employment regardless of how the invoice is written, and misclassification penalties fall on you. A contractor arrangement remains reasonable for genuinely independent, project-based work.
Published list prices as of July 2026: Multiplier $400/month, Deel $599/month, Remote.com and Oyster HR $699/month per employee; Papaya Global quotes per engagement. Per-country quotes can differ from list price, so compare quotes for Canada specifically.
Evaluating a candidate?
The Canada hire-me brief →
The one-pager candidates from Canada share with employers — same facts, their side of the table.
For your candidates
Working remotely from Canada →
Visas, tax residency, and best cities — share it with people you're hiring there.
Job seekers
Remote jobs you can do from Canada →
Boards, timezone fit, and live openings for Canada-based candidates.