Fact Sheet
Fact Sheet: Hiring in Canada: AOR & EOR
FACT SHEET
HIRING IN CANADA:
WHAT EMPLOYERS NEED TO KNOW ABOUT AOR & EOR
START HERE: THE BASICS
Hiring someone in another country means following that country’s employment, tax, and payroll rules. Atrium offers two ways to engage a worker there, and the right one depends on how the work will be done.
TERM
WHAT IT MEANS IN PLAIN LANGUAGE
TERM
EOR (Employer of Record)
WHAT IT MEANS IN PLAIN LANGUAGE
A company that becomes the worker’s legal employer on your behalf. You direct the day-to-day work. The employer handles the employment contract, payroll, tax withholding, benefits, and compliance with local law.
TERM
AOR (Agent of Record)
WHAT IT MEANS IN PLAIN LANGUAGE
A way to engage an independent contractor through Atrium and its partner. The contractor runs their own business and is not your employee, so you do not take on employment obligations. This only works when the working relationship is genuinely that of a contractor.
TERM
Partner
WHAT IT MEANS IN PLAIN LANGUAGE
The in-country company Atrium works with to deliver EOR and AOR where Atrium is not the employer itself.
TERM
CPP/QPP, EI, and QPIP
WHAT IT MEANS IN PLAIN LANGUAGE
The Canada Pension Plan and Employment Insurance are federal programs. Quebec employees pay into the Quebec Pension Plan (QPP) instead of CPP, plus the Quebec Parental Insurance Plan (QPIP). An employer must deduct contributions and premiums from pay and send them, with the employer’s own share, to the Canada Revenue Agency or, for QPP and QPIP, Revenu Québec.
TERM
Employment Standards
WHAT IT MEANS IN PLAIN LANGUAGE
The minimum rules for pay, hours, vacation, and ending employment. In Canada, each province sets its own. They apply to employees, not to independent contractors.
WHICH ONE DO I NEED?
The answer depends on the facts of the working relationship, not on what the contract says. Canadian law is clear on this point.A signed agreement that calls someone a contractor does not decide the question.
THIS SOUNDS LIKE AN EMPLOYEE (EOR)
THIS SOUNDS LIKE A CONTRACTOR (AOR)
THIS SOUNDS LIKE AN EMPLOYEE (EOR)
You decide what the person does, and where, when, and how they do it.
THIS SOUNDS LIKE A CONTRACTOR (AOR)
The person decides how, when, and where the work is done.
THIS SOUNDS LIKE AN EMPLOYEE (EOR)
You supply the tools, equipment, and training.
THIS SOUNDS LIKE A CONTRACTOR (AOR)
The person uses their own tools and equipment.
THIS SOUNDS LIKE AN EMPLOYEE (EOR)
The role is ongoing, with a regular schedule.
THIS SOUNDS LIKE A CONTRACTOR (AOR)
The work is a specific job or project with an end date.
THIS SOUNDS LIKE AN EMPLOYEE (EOR)
The person must do the work personally and works for you only.
THIS SOUNDS LIKE A CONTRACTOR (AOR)
The person can hire helpers or send a substitute and can work for other clients.
THIS SOUNDS LIKE AN EMPLOYEE (EOR)
The work is an important part of your business.
THIS SOUNDS LIKE A CONTRACTOR (AOR)
The person is in business for themselves and can make a profit or lose money.
If you are not sure, tell your EOR/AOR partner. Choosing the wrong model can be costly, and it is much easier to fix before the engagement starts.
HOW IT WORKS WITH ATRIUM
The answer depends on the facts of the working relationship, not on what the contract says. Canadian law is clear on this point. A signed agreement that calls someone a contractor does not decide the question.
TYPE
EOR
WHERE THE WORKER IS LOCATED
Ontario and British Columbia
EMPLOYED OR ENGAGED BY
Atrium. The worker is an Atrium employee.
TYPE
EOR
WHERE THE WORKER IS LOCATED
All other provinces and territories
EMPLOYED OR ENGAGED BY
Atrium’s in-country partner. The worker is an employee of the partner.
TYPE
AOR
WHERE THE WORKER IS LOCATED
All provinces and territories
EMPLOYED OR ENGAGED BY
Atrium’s in-country partner. The worker is an independent contractor, not an employee.
In every case you sign with Atrium, and Atrium manages the engagement. Workers in Canada are paid in Canadian dollars, and EOR workers are paid twice a month.
* Atrium is the direct employer in Ontario and British Columbia.
AOR IN CANADA:
HOW THE LAW DECIDES CONTRACTOR OR EMPLOYEE
The Canada Revenue Agency (CRA) asks one key question: is the person working in business on their own account, or as an employee?
It looks first at what both sides intended, then checks whether the real working conditions match. All of the facts decide the answer, not just the intention. Outside Quebec, it examines these six areas:
WHAT IS EXAMINED
POINTS TO AN EMPLOYEE
POINTS TO A CONTRACTOR
WHAT IS EXAMINED
Control
POINTS TO AN EMPLOYEE
The payer directs how and when the work is done, sets the schedule, and can discipline.
POINTS TO A CONTRACTOR
The worker works independently, chooses when and for whom, and can accept or refuse work.
WHAT IS EXAMINED
Tools and Equipment
POINTS TO AN EMPLOYEE
The payer supplies most tools and equipment and pays for repair and insurance.
POINTS TO A CONTRACTOR
The worker supplies their own tools and covers their own repair and insurance costs.
WHAT IS EXAMINED
Subcontracting or Hiring Assistants
POINTS TO AN EMPLOYEE
The worker must do the work personally and cannot hire or pay helpers.
POINTS TO A CONTRACTOR
The worker can hire someone else, subcontract the work, or bring in assistants at their own expense.
WHAT IS EXAMINED
Financial Risk
POINTS TO AN EMPLOYEE
Expenses are reimbursed and the relationship is continuous.
POINTS TO A CONTRACTOR
The worker has unreimbursed costs, is hired for a specific job, and can be liable if they do not deliver.
WHAT IS EXAMINED
Investment and Management
POINTS TO AN EMPLOYEE
No investment in the payer’s business and no business presence.
POINTS TO A CONTRACTOR
The worker invests in the business, manages their own staff, and has a business presence.
WHAT IS EXAMINED
Chance of Profit
POINTS TO AN EMPLOYEE
Guaranteed pay by the hour, day, or week, and eligible for employee benefit plans.
POINTS TO A CONTRACTOR
A flat fee with the worker’s own expenses, so profit or loss is possible.
In Quebec, the CRA applies a different framework, covered in the province notes.
WHAT CAN GO WRONG
If a contractor is found to be an employee, the payer can face consequences. The main ones are:
TAX & PAYROLL
A payer who should have deducted CPP and EI (QPP, EI and QPIP in Quebec) has to pay both the employer’s share and the employee’s share, plus penalties and interest.
ONTARIO
The Employment Standards Act does not allow employers to treat employees as if they are not employees. A misclassification can lead to a penalty, a prosecution, or both. The worker may be owed minimum wage, overtime, public holidays, vacation pay, and termination pay or notice.
BRITISH COLUMBIA
Calling someone an independent contractor, even if they agree, does not decide the issue, and any agreement that tries to waive the Employment Standards Act is not valid.
Some details can be misleading. Common signs of a contractor are not proof. In Ontario, a worker can still be an employee if they charge HST, send invoices, use their own vehicle, or have no tax deducted. A CRA ruling that they are not an employee does not settle it either, because Ontario applies its own test.
* Atrium is the direct employer in Ontario and British Columbia.
AOR IN CANADA:
WHAT TO DO AND WHAT TO AVOID
DO
- Describe the engagement as a specific job or project, with a start date and an end date.
- Define the result you need, and let the contractor decide how, when, and where to do the work.
- Allow the contractor to take other clients and to accept or refuse work from you.
- Let the contractor supply their own tools, equipment, and workspace.
- Pay a flat fee or an agreed rate against invoices. The contractor carries their own costs.
- Answer the classification questionnaire accurately and tell your EOR/AOR partner if the scope or working pattern changes.
- Tell your EOR/AOR partner early if the work starts to look like an ongoing role, so the worker can move to EOR.
No single point decides status. The whole relationship is considered.
DO NOT
- Do not set the worker’s hours, require them at your premises, or direct their day-to-day tasks.
- Do not require exclusivity orrequire them to ask permission before working for others.
- Do not provide training on how to do the work, set rules of conduct, or apply discipline as you would for staff.
- Do not supply equipment or reimburse them for the equipment they use.
- Do not offer employee benefits such as pension, group health, or dental plans.
- Do not require regular activity reports on their day-to-day tasks.
- Do not add a non-competition clause. In Quebecitis treated as a sign of an employment relationship.
- Do not rely on the contract label, HST registration, or invoices to prove contractor status.
- Do not run an open-ended, full-time arrangement with one client under AOR. Continuity, loyalty, and integration point to employment.
AOR IN CANADA:
WHAT CHANGES BY PROVINCE
PROVINCE
Ontario
WHAT IS DIFFERENT
The Employment Standards Act applies to employees and not to independent contractors. It looks at the relationship, not the label. Signs of an employee include work that is an important part of the business, the business deciding what, how much, where, and when, supplying tools, no right to subcontract, and the right to discipline. Signs of a contractor include the opportunity for profit and risk of loss, and deciding how, when, or where the work is done and whether to subcontract.
WHAT IT MEANS FOR YOU
Keep the work project-based and in the contractor’s control. Misclassification carries penalties.
PROVINCE
British Columbia
WHAT IS DIFFERENT
The Employment Standards Act applies to employees, not to independent contractors, but it defines employee very broadly. It includes a person an employer allows, directly or indirectly, to perform work normally performed by an employee. The Act is meant to protect as many workers as possible, and one of the main questions is whose business it is.
WHAT IT MEANS FOR YOU
Expect the real working arrangement to be examined. A contractor label alone will not protect the engagement.
PROVINCE
Quebec
WHAT IS DIFFERENT
Quebec follows the Civil Code. The CRA looks at the work, the pay, and whether there is a relationship of subordination, meaning the payer’s right to control the worker’s activities. Signs of employment include set schedules, rules of conduct, discipline, exclusivity, activity reports, and a non-competition clause. Separately, the CNESST (Quebec’s labor standards and workplace safety board) looks at pay, subordination, tools, chance of profit and financial risk, and integration into the company. It may treat a self-employed person with no employees as a worker if their activity is similar to the client’s, unless exceptions such as serving several clients at once apply.
WHAT IT MEANS FOR YOU
Plan for a closer review. Status can differ between the CRA and the CNESST.
PROVINCE
Other Provinces and Territories
WHAT IS DIFFERENT
The CRA applies the same six-area test to contracts formed in any province or territory other than Quebec. Each province has its own employment standards rules.
WHAT IT MEANS FOR YOU
Tell your EOR/AOR partner the province so the local rules are reviewed before the engagement starts.
EOR IN CANADA:
WHAT IT MEANS FOR YOU
Under EOR the worker is a legal employee, and Canada is not an at-will country.
In most cases an employer who ends the employment of someone who has worked for three months must give written notice or pay instead of notice, and the rules on page 10 are only the minimum. The employer must also deduct CPP contributions, EI premiums, and income tax from pay and send them, with the employer’s own share, to the CRA. In Quebec, QPP replaces CPP and QPIP also applies, and both are paid to Revenu Québec along with Quebec income tax. Atrium and its partner handle this for you, and the cost is included in your estimate.
In Ontario and British Columbia, Atrium does this work as the employer.
That covers payroll and statutory employer costs (CPP, EI, workers’ compensation, and Employer Health Tax), vacation entitlements, workplace compliance (privacy, drug and alcohol testing, the duty to accommodate, ending employment, and resolving employment disputes), and sales taxes (HST, GST, and PST).
EOR IN CANADA:
MINIMUM RULES BY PROVINCE
MINIMUM RULES
ONTARIO *
BRITISH COLUMBIA *
QUEBEC
MINIMUM RULES
Minimum wage
ONTARIO *
$17.95 per hour from October 1, 2026
BRITISH COLUMBIA *
$18.25 per hour from June 1, 2026
QUEBEC
$16.60 per hour from May 1, 2026
MINIMUM RULES
Overtime
ONTARIO *
Time and a half after 44 hours in a work week. Overtime is not calculated daily.
BRITISH COLUMBIA *
Time and a half after 8 hours a day or 40 hours a week, and double time after 12 hours in a day.
QUEBEC
Time and a half after 40 hours in a work week.
MINIMUM RULES
Vacation
ONTARIO *
2 weeks a year, and 3 weeks from 5 years of employment. Vacation pay is at least 4%, and 6% from 5 years.
BRITISH COLUMBIA *
2 weeks after the first year, and 3 weeks from 5 years. Vacation pay is at least 4%, and 6% from 5 years.
QUEBEC
2 weeks from 1 year, and 3 weeks from 3 years. Vacation pay is at least 4%, and 6% from 3 years.
MINIMUM RULES
Notice or pay when employment ends without cause
ONTARIO *
After 3 months: 1 week. After 1 year: 2 weeks. After 3 years: 3 weeks, rising by 1 week for each additional year to a maximum of 8 weeks.
BRITISH COLUMBIA *
After 3 months: 1 week. After 1 year: 2 weeks. After 3 years: 3 weeks, plus 1 week for each additional year, to a maximum of 8 weeks.
QUEBEC
After 3 months: 1 week. After 1 year: 2 weeks. After 5 years: 4 weeks. After 10 years: 8 weeks.
MINIMUM RULES
Fixed-term contracts
ONTARIO *
No notice is required if the term or task is completed. Notice is owed if the job ends early, if the term or task goes beyond 12 months from the start, or if employment continues 3 months after the term ends.
BRITISH COLUMBIA *
No notice is required for a set term or specific work of 12 months or less. If work continues 3 or more months past the planned end date, notice or pay is required.
QUEBEC
No notice is required for a fixed-term contract.
Atrium requires 30 days’ notice if you wish to extend the contract beyond the fixed term.
Rates and rules change, and minimum wages are adjusted every year.
* Atrium is the direct employer in Ontario and British Columbia.
THINGS CLIENTS OFTEN MISS
The rules are minimums, not limits.
In Ontario and British Columbia an employee can sue for wrongful dismissal in court instead of claiming the minimums and may be entitled to more. In Ontario, longer-serving employees at larger employers may also be owed severance pay on top of notice.
Plan the end date at the start.
For fixed-term contracts, the termination exceptions only apply within limits, such as the 12-month point in Ontario and British Columbia.
The first three months are the most flexible.
In Ontario, British Columbia, and Quebec, no statutory notice is owed to an employee with less than three months of service, which is why early fit matters.
This guide provides general information about engaging workers through Atrium’s Employer of Record (EOR) and Agent of Record (AOR) services. It is not legal, tax, or employment advice. Employment rules vary by country and province, change often, and depend on the facts of each engagement, so this guide may not reflect every requirement that applies to your situation. Please review the details of any engagement with your EOR/AOR partner before you proceed.
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