A U.S. company wants to hire you but isn't set up in Canada: what to say

“We’d love to hire you, but we’re not set up in Canada” sounds like a no. It is a payroll problem, and a solvable one. A U.S. company that is not set up in Canada can still hire you: a Canadian employer of record employs you on its behalf, and you work with the U.S. team as planned. Your part is to say so.

Why U.S. companies say they are not set up in Canada

They say it because their payroll stops at the border. A U.S. payroll withholds U.S. taxes. It does not deduct Canadian income tax, Canada Pension Plan (CPP) contributions or Employment Insurance (EI) premiums, and those are owed when the work is done in Canada.

The CRA’s employers’ guide is direct about it: non-resident employers with employees working in Canada “are subject to the same withholding, remitting, and reporting obligations as Canadian resident employers.” To employ you directly, the company would register a payroll account with the CRA, remit deductions on the CRA’s schedule, issue your T4 and follow the employment standards of your province.

Most hiring managers have never done that, so they assume the only alternative is to open a Canadian company. That takes months and a budget nobody approved for one hire: EOR vs Canadian entity compares the two. The recruiter is not rejecting you. They are telling you they don’t know the third option.

Do U.S. companies hire Canadians?

Yes. U.S. companies hire Canadians who live in Canada, and they do it in three ways: through an employer of record, through a Canadian subsidiary if they have one, or by engaging an independent contractor. Working for a U.S. company from Canada compares the three and explains which country taxes the income.

So keep applying for U.S. roles. A posting that says “U.S. only” often reflects where the company’s payroll runs, not a view on Canadian candidates. Two habits help:

1. Say where you are early. One line in your application saves a surprise at the offer stage: “I’m based in Ontario and can be employed through a Canadian employer of record, so you don’t need a Canadian entity to hire me.”
2. Bring the answer with the problem. A hiring manager who hears “not set up in Canada” from legal or finance needs something to send back. The email below is that something.

What to say when a U.S. company is not set up in Canada

Say that the company does not need to be set up in Canada, because a Canadian employer of record can employ you for it. In a conversation, one sentence is enough:

“You don’t need a Canadian entity to hire me. A Canadian employer of record can employ me on your behalf and handle the payroll and compliance, and I’d work with your team exactly as we discussed. Can I introduce you?”

The objection comes in a few versions. Each has the same answer.

What you hear	What it usually means	What to say
”We’re not set up in Canada.”	No Canadian payroll account and no Canadian entity	”You don’t need either. An employer of record in Canada employs me for you."
"We can only hire in the U.S.”	The payroll provider or policy covers U.S. employees only	”I wouldn’t be on your payroll. The employer of record pays me in Canada and bills you."
"Legal says we’d have to open a Canadian company.”	Nobody has looked at alternatives	”An employer of record exists for this case. They can explain it to legal in 15 minutes."
"Could you just invoice us as a contractor?”	The company wants the simplest route for itself	”For an ongoing role on your team, I’d rather be an employee. An employer of record makes that as simple for you as an invoice.”

An email you can copy

Send this to the hiring manager or recruiter. Replace the parts in brackets.

If the reply is “send me more”, Employer of Record covers pricing and what the U.S. company signs, and how it works shows the steps.

What being employed through an employer of record means for you

It means you are an employee in Canada, with a Canadian employer on paper and a U.S. team in practice. The employer of record signs your employment agreement and carries the legal duties of an employer. The U.S. company decides your work.

	Employer of record (InfraDev)	U.S. company
On your employment agreement	Yes, as your employer in Canada	No
Pays you, deducts and remits	Yes	No, it pays the employer of record
Issues your T4	Yes	No
Applies vacation, holidays and notice	Yes, under your province’s rules	Agrees the terms of your offer
Sets your priorities, hours and tools	No	Yes
Decides your salary and any group benefits	Administers them	Yes

In practical terms:

• Pay in Canadian dollars. Your salary is stated and paid in Canadian dollars, on Canadian payroll.
• Deductions at source. Income tax, CPP contributions (Québec Pension Plan contributions in Québec) and EI premiums come off each pay. Your employer adds its own share: it matches your CPP contribution and pays 1.4 times your EI premium.
• A T4. Employers have to give employees their T4 slips by the last day of February of the following year, so filing your return works as it would with any Canadian employer.
• Vacation and holidays under your province’s rules. In Ontario, Québec and Alberta the minimum is two weeks of vacation a year with vacation pay of at least 4% of wages, rising to three weeks and 6% with longer service. Public holidays are separate: Ontario has nine.
• Notice if the job ends. Provincial standards set minimum notice or pay in its place. In Ontario, an employee who has been employed for at least three months is entitled to notice of termination or termination pay.
• Employment Insurance. EI regular benefits require insurable employment. As an employee you are in it, and your employer issues a record of employment if your earnings are interrupted.
• Group benefits, where offered. Health and dental cover depends on what the U.S. company chooses to include in your offer. Ask about it when you discuss salary.

Canadian employment law basics sets out the provincial minimums, and the Canadian payroll guide walks through a sample pay stub.

Employee or contractor: why “just invoice us” is not always the better deal

A contractor’s rate can look higher than a salary and still leave you with less. As a contractor you run a business: nobody deducts tax for you, you pay both halves of your pension contributions, and the employment standards that protect employees do not apply.

	Employee through an employer of record	Independent contractor
Income tax	Deducted from each pay	You set it aside and pay it yourself
CPP	You pay half and your employer pays half	You pay both halves
EI	Insurable employment, with premiums shared with your employer	Special benefits if you register, after a 12-month wait
Vacation, holidays, notice	Provincial minimums apply	Only what your contract says
Year-end	T4 slip	Your own records as a self-employed person
GST/HST	Does not apply to a salary	You may have to register once revenue passes $30,000 over four calendar quarters

Three points deserve a closer look.

Pension contributions. The CRA’s rates page shows the difference in one line. In 2026 the maximum base CPP contribution is $4,230.45 for an employee and $8,460.90 for a self-employed person, because a self-employed person pays “both the employer and employee contribution.”

Protection if the work stops. Ontario’s guide to the Employment Standards Act says the Act “does not apply to independent contractors”. That means no statutory vacation pay, no public holiday pay and no notice. EI regular benefits, the ones paid when a job ends, require insurable employment. The EI program for self-employed people provides special benefits such as maternity, parental and sickness benefits, and the agreement has to be active for at least 12 months before a claim.

The label does not decide your status. The CRA says “all of the facts, including the actual terms and conditions of employment, determine a worker’s employment status.” If you work under the company’s direction, on its schedule and with its tools, you may be an employee whatever the contract says. Either party can ask the CRA for a ruling, by June 29 of the year after the year in question.

Contracting is the right choice for genuinely independent work: your own business, several clients, your own methods and the chance of profit or loss. For an ongoing role inside one U.S. team, employment usually describes the job more accurately. Contractor vs employee in Canada explains how the CRA tells the two apart, and the worked example after this article puts an employee’s pay stub beside a contractor’s invoice for the same annual amount.

What happens after the U.S. company says yes

Once the company agrees to use an employer of record, the remaining steps are short. Through InfraDev they run like this.

1. The introduction. You connect the hiring manager with InfraDev. A 15-minute call covers cost, timing and what the company signs.
2. Terms are agreed. The U.S. company confirms your role, salary in Canadian dollars, province and start date, and signs a service agreement with InfraDev.
3. You receive a Canadian employment agreement. It names InfraDev as your employer, records the terms the U.S. company offered, and follows the employment standards of your province.
4. You send your onboarding details. Your employer needs your social insurance number within three days of your start, a federal Form TD1 and, where it applies, the provincial form, plus your banking details for direct deposit.
5. You start. Most hires start within 24–48 hours once terms are agreed and documents are in. You work with the U.S. team from day one.
6. Your first pay. InfraDev runs payroll and pays you in Canadian dollars. Your pay statement shows gross pay and each deduction.

After that, the arrangement is quiet. Your manager is at the U.S. company. Questions about pay, time off or your agreement go to InfraDev.

If you hold a work permit or a study permit

Canadian citizens and permanent residents can work for any employer. Permit holders need to check before accepting, because an employer of record is a new employer in Canada.

• Open work permit. IRCC describes it as a permit that “lets you work for any employer in Canada”, with a short list of exceptions.
• Employer-specific work permit. It lets you work under the conditions on the permit, which include the employer. IRCC says a holder who wants to change jobs or employers must apply for a new work permit.
• Study permit. Eligible students can work off campus up to 24 hours a week during regular terms, and IRCC treats remote work for an employer outside Canada differently from off-campus work in Canada. How your arrangement is classified matters.

These rules change, and this is not immigration advice. Confirm your own situation with Immigration, Refugees and Citizenship Canada before you sign.

Still looking? Join the talent network

If you have not found the role yet, InfraDev can help with that too. Our talent network has more than 1,000 Canadian professionals, and U.S. companies we work with send us job descriptions to share with it.

• Roles are announced to people in the relevant field.
• You are presented to a client only for roles you have said you want. Nobody browses the network.
• If you are hired, InfraDev employs you in Canada and you work with the U.S. team.

Join the talent network or see current roles.

Summary

• “We’re not set up in Canada” describes a payroll gap. A U.S. company does not need a Canadian entity to hire you.
• Say that a Canadian employer of record can employ you on the company’s behalf, and send the email above.
• Through an employer of record you are an employee in Canada: paid in Canadian dollars, with deductions at source, a T4 and provincial employment standards.
• A contractor pays both halves of CPP, up to $8,460.90 in 2026, and has no statutory vacation, holidays or notice.
• Through InfraDev, most hires start within 24–48 hours once terms are agreed.
• Work permit and study permit holders should confirm their conditions with IRCC first.

Sources

• CRA: T4001 Employers’ Guide, Payroll Deductions and Remittances (non-resident employers)
• CRA: Employment status, employee or self-employed and when to ask for a ruling
• CRA: CPP contribution rates, maximums and exemptions and EI premium rates and maximums
• CRA: the employee’s social insurance number, Form TD1 and distributing T4 slips
• CRA: When to register for and start charging the GST/HST
• Government of Canada: EI regular benefits, eligibility, EI benefits for self-employed people and the record of employment
• Ontario, Your guide to the Employment Standards Act: employee status, vacation, public holidays and termination of employment
• Québec, CNESST: annual vacation
• Alberta: vacation pay
• IRCC: open work permits, employer-specific work permits, changing jobs or employers and working off campus as a student

This article is general information, not legal, tax or immigration advice. Amounts are in Canadian dollars and are 2026 figures as published by each government in November 2026.