Gig Workers in Canada vs. the US: Payment Expectations and Regulations
If your platform operates in both the US and Canada, or plans to expand, you can’t afford to treat your gig workforce as a one-size-fits-all model.
While both countries have thriving freelance and gig economies, their payment expectations and compliance requirements vary in important ways.
Here’s a side-by-side look at what to expect when paying gig workers in each country, and how to build a payout experience that supports both markets.
Payout Preferences: How Workers Want to Get Paid
United States
- Popular methods: Direct deposit (ACH), PayPal, prepaid cards
- Emerging demand: Instant payouts and earned wage access
- Mobile wallet adoption: Growing, but varies by worker type
- Currency: USD only
- Expectation: Fast access to earnings
Canada
- Popular methods: Interac e-Transfer, direct deposit, PayPal
- Local preference: Workers are highly accustomed to Interac, a fast, low-fee P2P payment network
- Mobile wallet usage: Increasing with adoption of fintech tools
- Currency: CAD (must support local currency disbursement)
- Expectation: Same-day or 1–2 day payments considered acceptable if fees are low
Compliance & Tax Requirements
US Gig Workers
- Form Required: W-9
- End-of-year filing: 1099-NEC (for independent contractors earning $600+)
- ID verification: Usually required during onboarding (SSN or EIN)
- Penalties for non-compliance: IRS fines, potential audits
- Regulation trends: States like California (AB5) are cracking down on worker classification
Canadian Gig Workers
- Form Required: Often a T4A slip must be issued by platforms hiring contractors
- Payer registration: You may need a Canadian Business Number (BN) to remit taxes
- CRA Compliance: The Canada Revenue Agency has strict withholding/tax reporting policies
- Worker classification: Still evolving, but the focus is on fair taxation and reporting
- Bilingual compliance: Quebec-based workers may require documentation in French
Currency & FX Considerations
One of the most overlooked differences? Currency conversion and associated fees.
- US to Canada payouts in USD: If not properly handled, workers may be forced to convert funds at retail FX rates, losing money in the process
- Preferred approach: Use a payment partner that supports CAD disbursements directly and displays earnings in the worker’s native currency
- Best practice: Show workers the exact amount they’ll receive in local currency, with fees disclosed up front
What This Means for Your Platform
If your platform operates in both the US and Canada, you need to:
- Support local payout methods (Interac, ACH, etc.)
- Automate W-9, T4A, and W-8BEN form collection based on user location
- Offer multi-currency options with clear FX conversion rates
- Ensure your payout system complies with CRA and IRS requirements
- Provide bilingual support or documentation for Canadian users (especially Quebec)
Lead with Confidence
Your gig workers expect fast, fair, and frictionless payments, no matter what side of the border they’re on.
To grow across North America, your payout infrastructure must be compliant, flexible, and localized. i-payout helps you build a payment experience that meets the unique needs of US and Canadian freelancers alike, from form collection to currency support.
