Payroll Guide for Recruitment Agencies in Toronto

The Toronto market has its own compliance requirements, client expectations, and competitive dynamics. This guide cuts through the generic content and focuses on what actually matters if you are building or running an agency in Toronto right now.

PAYE through your own payroll

Running PAYE payroll directly means deducting income tax and National Insurance from workers before paying them and paying employer NI on top. You must register as an employer with HMRC before making the first payment. For most Toronto agencies this is the simplest option for workers below the IR35 threshold.

Umbrella company arrangements

Umbrella companies employ workers on behalf of your agency, handling all PAYE obligations in exchange for a weekly margin per worker (typically £15–£30). This reduces your admin but requires careful due diligence — Toronto agencies have faced liability for non-compliant umbrella companies in their supply chain.

CIS for construction workers

The Construction Industry Scheme applies to most labour-only subcontractors on construction sites in Toronto. You must verify subcontractor status with HMRC, deduct CIS tax at either 20% or 30%, and file monthly returns. Oblivion exports CIS-compliant payroll data automatically.

Holiday pay

Temporary workers in Toronto accrue statutory holiday pay at 12.07% of earnings. You can roll it up into the hourly rate (if clearly stated in the contract) or accrue it and pay it on request. AWR requires equal holiday entitlement after 12 qualifying weeks — check your contracts are AWR-compliant.

Payroll software

For Toronto agencies running PAYE, common payroll systems include Sage Payroll, BrightPay, and MoneySoft. Oblivion exports payroll data in a format compatible with all three, eliminating manual re-entry of timesheet data into your payroll system and reducing errors that lead to worker payment disputes.

Manage your Toronto agency with Oblivion

The platform built for agencies just like yours — start free, no card needed.

Start Free →