If you're a US-based organisation and are looking to expand your development team, you might be overlooking a talent pool that's closer than you think: Canada. Employers based out of US assume that hiring across the border involves complex legal hurdles, but the reality is far more straightforward.
The Short Answer: Yes, you can!
As a US employer, you can hire Canadian citizen directly and there's no special permission required. It's a practice that's becoming increasingly common in the tech industry considering they look for talents globally after the work from home flexibility. The key is understanding a few basic requirements.
Why Canada Makes Sense for US Tech Companies
Geographic and Cultural Proximity: Canada shares a close time zones with the US and hence eliminating the coordination challenges of working with teams halfway across the world. You would have the team in your own time zone.
Similar Work Culture: Even though the corporate cultures are globally acceptable these days, Canada offers a similar work culture which makes the global team work efficiently together.
Competitive Costs: While you gain access to highly skilled talent, the cost structure often works in your favour. US salaries are comparatively competitive than the Canadian market.
Strong Talent: Canada has a robust tech ecosystem with excellent engineering schools and a growing startup scene, producing skilled developers in all specialisations.
How can you hire Canadian employees?
Hire as Independent Contractors: This is one of the simplest starting point. Canadian contractors can work with you on a project or ongoing basis. However, if the relationship looks like employment, Canadian authorities may reclassify them as employees, triggering tax and benefit obligations.
Set Up a Canadian Entity: If you're planning significant operations in Canada, establishing a legal entity gives you full control. However, this requires legal setup, ongoing compliance, and administrative overhead.
Use an Employer of Record (EOR): An EOR handles all the legal and administrative aspects payroll, taxes, benefits while you manage the employee's everyday work. This is ideal if you want the commitment of a full-time employee without the complexity of setting up a Canadian entity.
What You Need to Know
Unlike the US federal system, Canada has both federal and provincial employment laws. The rules in Ontario differ from those in British Columbia or Quebec. Your developer's province of residence determines which rules apply for minimum wage, overtime, and benefits.
Canada doesn't recognise at-will employment. You can't terminate employees without cause or notice. When letting someone go without cause, you must provide notice or payment in lieu, based on their tenure and role. Employment contracts should clearly outline these terms.
Benefits for the full time employees
Paid Time Off: After 12 months, employees get a minimum of two weeks annual vacation. This increases with tenure.
Parental Leave: New parents are entitled to 15 weeks of maternity leave plus 35-61 weeks of parental leave (depending on the option chosen), funded through Employment Insurance.
Statutory Holidays: Canada has federal holidays that are paid days off for all employees from day one.
Health Insurance: While Canada has public healthcare, many employers offer supplemental private insurance for dental, vision, and extended coverage to remain competitive.
Payroll and Tax Contributions
Both employers and employees contribute to:
- Canada Pension Plan (CPP): 5.95% each on earnings up to $74,600 according to 2026.
- Employment Insurance (EI): 1.63% for employees, 2.28% for employers on insurable earnings
These contributions are straightforward and handled through regular payroll.
Common Pitfalls to Avoid
Misclassifying Contractors: If your "contractor" works exclusively for you with set hours and uses your equipment, Canadian authorities may deem them an employee. This triggers backdated tax and benefit obligations.
Ignoring Permanent Establishment: If you have a fixed location in Canada generating revenue, you've created a permanent establishment and must pay Canadian taxes. Remote employees working from home generally don't trigger this, but consult with a tax professional.
Asking Prohibited Questions: Canada's hiring discrimination laws are stricter than US laws. Don't ask about immigration status, age, marital status, religion, or other protected characteristics during interviews.
The Bottom Line
Hiring developers in Canada isn't the bureaucratic nightmare many US companies imagine. The countries' proximity, shared language, and aligned work cultures make it one of the smoothest international hiring experiences available.
Whether you're a startup looking for your first remote developer or an established company expanding your team, Canadian talent offers immediate productivity without the complications of vastly different time zones or work cultures.
The opportunity is there. The talent is ready. And the process? Simpler than you think.
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