When it comes time to expand their business, many American business leaders and owners look to the Great White North. Canada makes sense as your first international market. There are so many similarities between the two countries, success may seem like a guarantee.

Doing business in Canada can prove to be a stumbling block for expanding companies. Although Canadians have much in common with their neighbors to the south, there are also plenty of differences. That’s especially true regarding employment law and managing your employees.

If you plan to hire Canadians to staff your operations, keep these five differences in mind.

1. Payroll for Doing Business in Canada

Payroll is already confusing enough in the United States. When you step over the border into Canada, a whole new set of rules come into play.

At first glance, Canadian payroll may not seem too different than its US counterpart. You calculate how much you owe your employees, you take certain deductions, and you remit those to the Canada Revenue Agency.

Unfortunately it’s not that simple. Canadian law imposes different penalties, different payment schedules, and even different record-keeping obligations on employers. You must be aware of all those differences as you administer payroll.

2. Holidays and Vacation Pay Are Mandatory

Another major difference between employee compensation in the US and Canada is holiday and vacation pay. In the US, both of these are almost entirely optional. If you want to pay your workers for a holiday or give them two weeks of paid vacation, that’s your choice.

In Canada, both are mandatory. Certain holidays are considered statutory, which means employees must be given the day off and paid for the day.

Paid vacation is also non-optional. Employers are expected to set aside a certain amount, often equivalent to a percentage of an employee’s salary or average earnings. This is then used to fund an employee’s vacation entitlement.

Rates of pay for holidays and vacations, as well as the amount of time off, are set by the provinces. That means the rules vary from place to place. An employee in Quebec will be paid differently than one working in Ontario or BC.

3. Health Insurance Is Supplemental

The Affordable Care Act created an obligation for American employers to offer health insurance to their employees. Employers are still able to choose the plan they offer and the provider they work with. Health insurance can act as an incentive for hiring the right talent.

In Canada, the situation is quite different. Canadian employees still like employers who offer health insurance as part of their benefits, but the policies are considered supplemental. Most Canadians are covered by the publicly funded system, so their private insurance usually extends to medical expenses that the provincial programs don’t cover.

Your Canadian employees probably won’t be interested in hospital care or coverage for visiting the doctor. Instead, look for ways to offer them coverage for the care they need, such as dental visits, eye care, or prescription medications.

4. Paid and Unpaid Leave

Another difference US employers encounter when they’re doing business in Canada is the robust set of paid and unpaid leaves Canadian workers are entitled to. Although it varies by province, almost every Canadian employee is entitled to some form of paid or unpaid leave.

Parental leave, for example, is covered for up to 18 months by the federal Employment Insurance program.

5. At-Will Employment Does Not Exist

One of the most jarring differences for US employers operating in Canada is the relationship between employers and employees. In the US, employment is considered “at will.” Either the employer or employee can end it without concern.

The same is not true in Canada, where employers must provide adequate notice or compensation to employees upon termination.

These are just a handful of the differences you’ll find when you’re doing business in Canada. Working with a PEO can help you navigate these issues and help your business succeed north of the border.