What types of employment contract are there in Canada?

There are 4 types of employment contract in Canada, each offering specific protections for both Canadian and foreign workers: 

  • Permanent contracts: The most common type of contract for employees in Canada. Permanent contracts usually include health care benefits, an annual salary, and possibly bonuses as well. This contract type is also considered an open-ended contract. Employers of permanent employees must regularly contribute to their Employment Insurance (EI), Canadian Pension Plan (CPP), and withhold applicable income tax.  
  • Freelance/contract employment: This type of employment is typically based around a certain project or period of time. Normally, freelance/contract employees are not entitled to EI or CPP contributions by the employer, and benefits are limited to the individual’s contract fee.  
  • Part-time employment: These employees work less than 30 hours per week, and employers contribute to both EI and CPP. Part-time employment can be comprised of a set number of hours (less than 30) each week, and it can also include occasional or weekend work. 
  • Temporary work: Temporary work in Canada is often seasonal, for example, agricultural workers who work during the harvest season, lifeguards, rangers, tourism workers, and others. Temporary workers have specific rights to pay, employee safety, and other employee rights, but EI and CPP contributions are optional. 

A local PEO can help you determine which contract type is appropriate based on your business needs and the type of work to be performed. 

If you have questions about employment contracts in Canada, please get in touch with our team today!

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