Employee ‘Benefits’ are Very Different Across the Border
In Canada the health care system is government run with the funding coming from employer taxation. All Canadian citizens can register for a health card and are eligible to have their basic medical needs covered under this program.
Each province has its own system but in its simplest form it means that Canadians do not pay out of pocket for doctor’s visits, emergency care, surgery, most diagnostic testing and short term medical leave. Many Canadian companies offer employees a benefit program that offers coverage for those medical needs that are not part of this government system such as prescriptions and dental care.
When a U.S. company looks to match their U.S. employee benefits with those being offered to a Canadian employee, this is an important differentiator that needs be considered.
Many U.S. companies offer employees a 401k plan and can also offer something similar in Canada called an RSP (Retirement Savings Plan). Some differences to note in regards to the two are that the Canadian RSP can be set up through any financial institution and the employee can choose to contribute after tax dollars into their own plan.
A 401k has a set annual limit that is the same for every employee regardless of income where in Canada the annual limit is 18% of salary to a maximum of $20,000. In Canada these unused limits can be carried forward indefinitely where in the U.S. contribution amounts have to be used each year or they are lost.
Canadian Holidays Vary Slightly by Province
Canadian holidays are not the same as those in the United States and in fact vary slightly from province to province. The statutory holidays that are the same across every province include; New Year’s Day on January 1st, Good Friday on the Friday before Easter Sunday, Canada Day on July 1st, Labour Day on the first Monday of September and Christmas Day on December 25th.
Stat Holiday Pay Eligibility
Every province has different rules in regards to statutory holiday pay eligibility. For example, in Ontario an employee is eligible to be paid for a stat holiday right from day one, in Alberta the employee must have been employed for the last 30 days before the holiday with actual working days totalling more than 15 in order to start receiving this pay. Stat holiday pay calculation is based on previous hours worked within a certain timeframe.
Looking to hire a Canadian but Unsure of Canadian Employment Law?
The Payroll Edge’s EOR service is similar to a PEO service in the United States and works to take the strain off U.S. or foreign based employers hiring and paying Canadian employees but who are unfamiliar with employment laws in Canada. An Employer of Record (EOR) service like The Payroll Edge can take care of benefits packages’, payroll calculation (including statutory pay), payroll tax deductions as well as government remittances for your Canadian employees and so much more.