Complete Guide to Hiring in Ontario
Why Hire in Ontario?
Ontario is popular destination for business expansion and employers looking to grow their international workforce. The province is home to a wide range of industries, including manufacturing, mining, finance, and technology, and a highly skilled and educated workforce. Ontario is the economic engine of Canada, and its strong economy provides ample opportunities for locals to skill up and attracts new workers from all over the world. This dynamic means that finding skilled workers looking for new opportunities is always easy in Ontario!
Market Overview
- Population: Estimated 15 million
- Currency: Canadian dollar (CAD)
- Conversion rate: 1 USD is equal to 1.33305 CAD
- Official Languages: English and French
- Most Common Languages: English, Chinese, Italian, Spanish, Punjabi, Tagalog
- Capital: Toronto
- Closest Economic Centres: Toronto with Montreal in the next province
- Industries: Manufacturing (auto, IT and communications, biotech, pharmaceuticals, and medical devices), mining, farming, service
- Time Zones: Eastern Standard Time (EST)
- Date Format: mm/dd/yyyy
- Political System: Constitutional monarchy and parliamentary democracy
- Social System: Welfare state including publicly funded healthcare, subsidized post-secondary education, and employment insurance
Everything You Need to Know About Ontario
What is Ontario Well Known for?
- Canada’s main economic hub
- Among the top 10 producers in the world for nickel and platinum group metals
- Significant producer of gold, copper, zinc, cobalt and silver
- Canada’s wealthiest province
- Nicknamed “the loyalist province” for being home to British loyalists who fled North during the American Civil War
- Contains more than half of the highest quality farmland in Canada and one fifth of the world’s fresh water
- Home to the world-famous Niagara Falls and Niagara region wineries
Hiring in the Province of Ontario
There are many benefits to hiring in the province of Ontario, including access to a large and diverse workforce, a strong economy and business-friendly environment, and access to government programs and incentives that can help businesses grow and succeed. Ontario has a strong education system and is home to many leading post-secondary institutions, providing businesses with access to highly skilled and educated workers. Hiring in Ontario can help businesses tap into a wealth of talent and resources, and provide a strong foundation for growth and success.
What is the Minimum Wage in Ontario?
The minimum wage in Ontario is the lowest amount that an employer is legally permitted to pay an employee for their work. As of October 1, 2022, the minimum wage in Ontario is $15.50 per hour. This amount is subject to periodic increases, as determined by the Ontario government. The minimum wage is intended to provide workers with a fair and livable wage, and to ensure that they can support themselves and their families.
What are the Local Labour Laws in Ontario?
In Ontario, the Employment Standards Act (ESA) protects workers’ rights and sets out guidelines for employers. Under the ESA, employees can work a maximum of eight hours per day and 44 hours per week, before they must be paid overtime. Overtime pay is 1.5 times their regular rate of pay. Employees are entitled to up to 17 consecutive weeks of unpaid maternity leave, and five consecutive weeks of leave without pay on the birth of a child for paternity leave. Employees are entitled to three unpaid sick days per year but can also take protected, unpaid leaves for sickness, to welcome a new baby, or for care giving. Holiday pay is earned over a period of 12 consecutive months from May 1st to April 30th, known as the vacation entitlement year.
How to Pay Remote Workers in Ontario
In Ontario, employers have the option of paying their remote workers through a legal entity in the country where the work is being performed, or by working with an employer of record. An employer of record is a company that takes on the legal responsibilities of employing a worker, including paying their salary and withholding taxes. This option is popular because it is generally more cost-effective and faster than setting up a legal entity. It is important for employers to carefully consider their options when it comes to paying remote workers, as different countries have different rules and regulations regarding employment and taxation. Employers who choose to open their own entity should consult with a qualified legal professional to ensure compliance with all relevant laws and regulations.
Work With an Employer of Record in Ontario
Working with an employer of record in Ontario can be a convenient way for businesses to manage their employment obligations. The employer of record assumes responsibility for the hiring, payment, and management of employees, allowing the business to focus on its core operations. Setting up an employer of record arrangement typically takes a few days to complete, and once in place, it covers all aspects of employment including payroll, benefits, and compliance with relevant laws and regulations. This arrangement can be beneficial for businesses that lack the resources or expertise to manage their own employees, as well as for workers who prefer the added security and support provided by an employer of record.
Open a Legal Entity in Ontario
Opening a legal entity in Ontario is a straightforward process that involves registering the business with the appropriate government agencies. Depending on the type of business, this may include registering with the Ministry of Government and Consumer Services, the Ontario Securities Commission, or other relevant regulatory bodies. Once the business is registered, it is considered a legally recognized entity with the ability to enter into contracts, hire employees, and conduct business activities. This can be beneficial for businesses looking to establish themselves as separate entities with distinct legal rights and responsibilities. However, opening a local entity means taking on full responsibility for payroll and employment standards compliance.
How do International Businesses Pay Remote Workers in Ontario?
International businesses that have remote workers in Ontario must pay their employees in Canadian dollars that can be through an employer of record like Canadian Payroll Services. This ensures that the employees are paid in accordance with Canadian employment laws and regulations. Additionally, international businesses must also comply with all other employment standards and requirements in Ontario, such as providing vacation pay, overtime pay, and other benefits. By using Canadian Payroll Services, international businesses can ensure that their remote workers in Ontario are paid accurately and on time.
What are the Rates for the Tax Brackets in Ontario?
Canada has a progressive tax system where the more you make, the more tax rate increases. Instead of paying one tax rate for all your income, you pay a graduated rate for additional income that falls into a higher bracket. For example, if you make $100,000, the first $48,535 is taxed at 15%, while the next $51,465 is taxed at 20.5%. On top of this, workers in Canada contribute every pay cycle to the Canada Pension Plan and Employment Insurance. Employers make matching contributions and pay Worker’s Compensation premiums.
The federal income tax rate for different tax brackets in Canada is as follows:
| $48,535 or less: 15% |
| $48,535 to $97,069: 20.5% |
| $97,069 to $150,473: 26% |
| $150,473 to $214,368: 29% |
| More than $214,368: 33% |
The Ontario income tax rate for different tax brackets in Canada is as follows:
| $49,231 or less: 5.05% |
| $49,231 to $98,463: 9.15% |
| $150,000 to $220,000: 12.16% |
| More than $220,000: 13.16% |
Employment Standards Act (ESA) in Ontario
The Employment Standards Act (ESA) in Ontario is a set of laws that sets the minimum standards for employment in the province. The ESA applies to all employers and employees, regardless of the size of the business or the number of employees. The ESA covers a wide range of employment standards, including minimum wage, hours of work, overtime pay, public holidays, and leaves of absence.
Under the ESA, employers are prohibited from penalizing employees in any way for exercising their rights, such as requesting time off or taking a leave of absence. If an employer penalizes an employee in violation of the ESA, they may be ordered to compensate and/or reinstate the employee, ordered to pay a penalty, or even prosecuted.
Employees in Ontario cannot waive their rights. This means that an employer cannot require an employee to sign a contract or agreement that would limit or eliminate their rights under the ESA. Any such agreement is considered void and unenforceable.
The ESA is enforced by the Ministry of Labour, Training and Skills Development. Employers who violate the ESA will either be ordered to comply with the law, ordered to pay their employees any unpaid wages or benefits, ordered to pay a penalty, or, in the worst case, prosecuted for violating the law. Employers who are found to have violated the ESA may face significant fines and other penalties, including a possible criminal conviction.
Summary of Hiring Workers in Ontario
The pros of hiring in Ontario include access to a highly skilled and educated workforce, a diverse and multicultural population, and a strong economy. Additionally, the province has a stable and predictable legal and regulatory environment, which makes it easier for employers to navigate the hiring process. Canadian Payroll Services can provide employers with a range of services, including assistance with compliance with employment laws and regulations, payroll processing, and tax reporting.
The cons of hiring in Ontario include high labour costs relative to the rest of Canada. Additionally, the province has a strong union presence, which can make it can pose challenges for businesses expanding operations into the province. However, with the help of Canadian Payroll Services, employers can overcome these challenges and take advantage of the many benefits of hiring in Ontario.
Hire Your First Employee in Canada With Canadian Payroll Services
As an employer of record, Canadian Payroll Services can help you hire quickly and compliantly in Canada, without having to open a local entity. We handle payroll, onboarding, and local compliance so that you never have to worry about it.