Before you post a permanent job for a role that spikes every spring, you need to know what that hire costs in the eight months after the spike. Canadian employers lose more money to the wrong hiring model than to the wrong hire. A permanent employee on a seasonal workload is paid for idle months.
A temporary worker in a role that runs all year is paid a markup that never stops. The right model follows the shape of the work, not the habit of the company. Most businesses need both.
In this guide we take you through what each model costs in 2026 and where each one fits.
What Each Hiring Model Costs a Canadian Employer
The two models charge you in different shapes. Temporary staffing is an hourly bill rate with no fixed commitment. Permanent hiring is a salary plus everything the law attaches to it, plus the cost of finding the person.
The Cost of a Temporary Worker
For a temporary worker, the staffing agency is the employer. You pay a bill rate per hour worked, which is the worker’s wage plus a markup that in Canada typically runs from 25 to 50 percent for most roles. The markup covers the agency’s statutory costs as employer, its recruiting and payroll administration, and its margin. A $21 an hour warehouse worker at a 40 percent markup bills at $29.40.
You pay nothing when the worker is not working. No salary continues through a slow week, no benefits are enrolled, and no severance is owed when the assignment ends. Assignment employees have the same rights under Ontario’s Employment Standards Act as any other employee, and the agency is responsible for meeting them.
The Cost of a Permanent Employee
For a permanent employee, you carry the wage and every cost attached to it. In 2026 you match Canada Pension Plan contributions at 5.95 percent up to $74,600 and pay Employment Insurance at 2.282 percent up to $68,900. You pay vacation pay of at least 4 percent, nine public holidays and WSIB premiums for your classification.
Employer Health Tax applies once Ontario payroll passes the exemption. Benefits, if you offer them, add 5 to 15 percent more. None of it stops in a slow month.
You also pay to find the person. A staffing agency’s permanent placement fee is usually 15 to 25 percent of first-year salary. Recruiting in-house costs job board fees, screening time and the weeks the seat sits empty. When the employment ends, termination notice or pay in lieu under the ESA follows length of service.
The Same Role Under Both Models
Take a warehouse associate at $21 an hour, 40 hours a week, for a full year. As a temporary worker at a 40 percent markup, the cost is about $61,200. As a permanent employee, the wage is $43,680.
Statutory costs and vacation add roughly $6,000, and WSIB with a modest benefits plan adds about $3,500. A 20 percent placement fee adds $8,700 in year one. The first-year total is about $61,900.
The two are close in year one. In year two the permanent employee costs about $53,200 with no placement fee, and the temporary worker still costs $61,200. For a role that runs all year, every year, permanent wins from the second year. For a role that runs five months, the temporary worker costs about $25,500 and the permanent employee still costs $61,900.
Warehouse associate at $21 an hour | Temporary, 40 percent markup | Permanent, year one | Permanent, year two |
Full year, 2,080 hours | About $61,200 | About $61,900 | About $53,200 |
Five months, 867 hours | About $25,500 | About $61,900 | About $53,200 |
Cost when the work stops | Nothing | Salary continues, or termination pay | Salary continues, or termination pay |
If you want that comparison run on your own roles and hours, Next Employment will prepare it as part of a free consultation. Send the team your roles and expected hours. You will see both models priced side by side.
When Temporary Staffing Fits
Temporary staffing pays for itself when the work is uneven, uncertain or short. Four situations account for most of the temporary orders Canadian employers place. Each one is a case where a salary would be paid for idle time.
Seasonal and Peak Demand
A distribution centre that doubles its volume from October to December has work that permanent staff cannot fill efficiently. So does a food processor with a harvest window, or a landscaping company with an eight-month season. Temporary workers arrive when the volume does and leave when it goes. You pay the markup for five months rather than a salary for twelve.
Coverage for Absence
A maternity leave, a long-term disability or an unexpected resignation leaves a seat empty for a known or unknown period. A temporary worker holds the seat without a permanent commitment. The assignment ends when the employee returns.
Projects and Contracts With an End Date
A plant retooling, a warehouse move or a six-month contract you have won creates work with a finish line. Hiring permanently for it means layoffs at the end. Temporary staffing matches the headcount to the contract.
Testing a Role or a Person
If you are not sure the role is permanent, or not sure the candidate is right, a temporary assignment answers both questions on the job. In Ontario the agency can charge a conversion fee only within six months of the worker’s first day with you. Many agencies waive it after a set number of hours. After six months you can hire directly with no fee.
- Volume that rises and falls with the season or the order book
- Absences with a known return date
- Projects and contracts with a fixed end
- Roles you want to test before committing to a salary
When Permanent Hiring Fits
Permanent hiring pays for itself when the work is steady and the value of the person grows with time in the role. Three situations point to it. In each, the markup on a temporary worker buys flexibility you would not use.
Core Roles That Run All Year
A production supervisor, a dispatcher, a bookkeeper or a maintenance technician works every week of the year and knows more about your operation every month. For those roles, the markup on a temporary worker is money spent on flexibility you do not use. From the second year, the permanent employee is cheaper and better.
Roles Where Experience Compounds
Some roles are worth more in year three than in year one. A sales representative with a book of accounts builds value that a rotating temporary worker cannot. So does a machine operator who knows every quirk of the line, or a customer service lead who knows the regular callers. Turnover in those roles costs more than any markup.
Roles That Need Long-Term Commitment From the Worker
Skilled trades, licensed drivers and technical staff are scarce, and the best of them want permanent positions with benefits. A permanent offer reaches candidates a temporary assignment does not. The placement fee buys access to that pool.
Next Employment recruits for both models across manufacturing, warehousing, logistics, construction, food processing and office roles. The team will tell you which model fits a role before quoting either. Describe the role to the team and the recommendation comes with the price.
How to Decide Role by Role
The mistake most employers make is choosing one model for the whole company. The better approach is to sort every role by three questions. Each answer picks the model.
Does the Work Run All Year?
If the role has work 50 weeks a year at a steady level, permanent is cheaper from year two. If the role has work for five to eight months, temporary is cheaper every year. The same applies if the level swings by half between seasons.
Does Value Build With Tenure?
If the person is worth more in year three than in year one, permanent. If the role is the same on day 200 as on day one, temporary loses nothing to turnover. Flexibility is the gain.
How Sure Are You?
If you are not sure the volume will hold, the contract will renew or the candidate will fit, start temporary and convert. Temp-to-hire gives you a working interview. The conversion fee is smaller than the cost of a permanent hire that does not work out.
Question | Answer points to temporary | Answer points to permanent |
Does the work run all year? | No, or it swings by half | Yes, at a steady level |
Does value build with tenure? | No, the role is the same on day 200 | Yes, the person is worth more each year |
How sure are you? | Not sure of volume, contract or candidate | Sure of all three |
Sort Your Open Roles Into the Two Models This Week
List every open role and answer the three questions for each. Most Mississauga and GTA employers who do this find a mix, with the core roles permanent and the seasonal, project and coverage roles temporary. That mix is the cheapest structure, and it is rarely the one the company arrived at by habit.
Next Employment fills both sides of that list, with temporary crews for the peaks and permanent placements for the core, from the same account manager. Book a free consultation or call (226) 499-3900 with your list. The team will price each role under the model that fits it.
Frequently Asked Questions
Is temporary staffing always more expensive than hiring permanently?
Per hour worked, usually yes, because the bill rate includes the agency’s margin. Per year, it depends on how many hours the role actually needs. For a role with five months of work, temporary costs less than half of a permanent salary. For a role with 12 months of steady work, permanent is cheaper from the second year.
Do temporary workers have the same rights as my employees?
Yes. Under Ontario’s Employment Standards Act, assignment employees have the same rights as other employees, including minimum wage, vacation pay, public holidays and hours of work rules. The agency is responsible for meeting them as the employer, and you are responsible for a safe workplace under the Occupational Health and Safety Act.
Can I convert a temporary worker to permanent?
Yes. In Ontario the agency can charge a conversion fee only if you hire within six months of the worker’s first day with you, and it cannot restrict the hire. Many agencies waive the fee after a set number of hours. Ask for the conversion terms before the assignment begins.
What happens to a permanent employee when the work runs out?
You continue to pay them or you terminate the employment. Termination in Ontario requires notice or pay in lieu under the ESA, scaled to length of service, and severance pay applies in some cases. That cost is the reason permanent hiring fits steady work and temporary staffing fits uneven work.
