Payroll and Benefits Guide Canada – Ontario

Last updated: Apr 09, 2023

Canadian Dollar (CAD)
Employer Taxes
Payroll Frequency
Employee Costs
Toronto (State Capital)
Date Format
Fiscal Year
1 April - 31 March



Employer Payroll Contributions


Canada Pension Plan (CPP) (applied on salary between 3,500 CAD to 66,600 CAD)


Federal Employment insurance (EI) (applied on salary up to 61,500 CAD )


Workplace Safety Insurance


Health Tax


Total Employment Cost


Employee Payroll Contributions


Canada Pension Plan (CPP) (applied on salary between 3,500 CAD to 66,600 CAD)


Employment Insurance (EI) (applied on salary up to 61,500 CAD )

Ontario Health Premium (total remuneration)


Up to 200,000 CAD


200,000 CAD to 230,000 CAD


230,000 CAD to 260,000 CAD


260,000 CAD to 290,000 CAD


290,000 CAD to 320,000 CAD


320,000 CAD to 350,000 CAD


350,000 CAD to 380,000 CAD


380,000 CAD to 400,000 CAD


More than 400,000 CAD

7.28% + Health Premium

Total Employee Cost



Employee Income Tax



Up to 53,359.00 CAD


53,359.01 CAD to 106,717.00 CAD


106,717.01 CAD to 165,430.00 CAD


165,430.01 CAD to 235,675.00 CAD


235,675.00 CAD and over



Up to 49,231 CAD


49,231.01 CAD – 98,463.00 CAD


98,463.01 CAD – 150,000.00 CAD


150,000.00 CAD – 220,000.00 CAD


220,000.00 CAD and over

Employer taxes


Employee taxes


Minimum Wage


The standard hourly minimum wage in Ontario is 15.50 CAD.
The minimum wage rate set for employees of federally regulated organizations will be the current minimum wage rate specified in the jurisdiction in which the employee performs the work.




Payroll Cycle

An employer has 1 month to remit an employee’s first pay. After this, wages must be paid at regular intervals of no more than 16 days, or 1 month in case of managerial personnel. If pay day falls on a statutory holiday, the wages must be paid on the preceding working day.

13th Salary

There are no provisions in the law regarding 13th salaries.

Working Hours


Per the Employment Standards Labor Code, the maximum working hours shall not exceed 8 hours a day, 40 hours a week, with a maximum (inclusive of overtime) of 48 hours per week.


An employer must pay an employee overtime pay for overtime hours at an overtime rate that is at least 150% of the employee’s regular rate of pay or one hour of time off in lieu.

Working Week



Paid Time Off

In Ontario, employees are entitled to two consecutive weeks of annual leave after the first year of employment and three consecutive weeks of leave after five years of employment.

Employees are entitled to vacation pay of 4.00% of the regular salary rate of pay for the first five years of employment and 6.00% of the regular salary rate of pay after five years of employment.

Vacation Days
Public Holidays

Public Holidays

There are 9 public holidays in Ontario. Employees that work on a statutory/public holiday are paid 150% of the regular hourly salary rate of pay plus public holiday pay, or regular rate of salary for all the hours worked plus a substitute day off with public holiday pay. When public holidays fall on a weekend it is customary to give off in lieu either the previous working day or next working day.

Sick Days

The Canada Labour Code was updated with effect from December 1, 2022, to provide 10 days of paid sick leave to employees in the federally regulated private sector, (which is limited to specific industries)  There is a thirty day qualifying period for covered employees; therefore, on December 31, employees who have been continuously employed for at least 30 days will have access to their first three days of paid sick leave. As of February 1, 2023, employees will acquire a fourth day, and will continue to accumulate one day a month up to a maximum of 10 days per year.

Effective December 18, 2022, Canada’s Employment Insurance sickness benefits were extended from 15 weeks to 26 weeks. As such, qualified individuals who establish a new claim on or after December 18, 2022 will receive up to 26 weeks of Employment Insurance sickness benefits, paid at 55% of their average weekly insurance earnings, for up to a maximum of $650 per week in 2023.

Maternity Leave

Employees are entitled to up to 17 weeks of leave if the employee has completed at least one year of employment before the due date. Maternity leave may not begin before the 17th week preceding the expected delivery date and shall end not later than 18 weeks after. If the delivery occurs after the expected date, the employee is entitled to at least two additional weeks of maternity leave.

Special maternity leave may begin four weeks before the expected delivery date when there is a risk of termination of her pregnancy or a danger for the health of the mother or unborn child caused by the pregnancy. Two weeks’ notice and a medical certificate is required.

Employment insurance provides maternity and parental benefits to:

  • People who are away from work because they’re pregnant or have recently given birth
  • Parents who are away from work to care for their newborn or newly adopted child
  • Workers are entitled to 55% of their earnings for 15 weeks up to a maximum of CAD650 a week

Maternity benefits are only available to the person who is away from work because they’re pregnant or have recently given birth. They can’t be shared between parents.

The person receiving maternity benefits may also be entitled to parental benefits.

Maternity benefits can be followed by parental benefits. You may apply for both at once.

For further information visit the Government of Canada website.



Paternity Leave

Paternal leave falls under parental leave.

Parental Leave

Parents are entitled to up to 63 weeks of leave to care for a newborn or adopted child. The parental leave cannot begin before the week of birth or when the child is legally adopted.
The leave should begin no later than 78 weeks after the birth or adoption.

Employment insurance provides maternity and parental benefits to:

  • People who are away from work because they’re pregnant or have recently given birth
  • Parents who are away from work to care for their newborn or newly adopted child

The assistance details are as follows:

Benefit name Maximum weeks Benefit rate Weekly max
Standard parental Up to 40 weeks can be shared between parents, but one parent cannot receive more than 35 weeks of standard benefits 55% up to $650
Extended parental Up to 69 weeks can be shared between parents, but one parent cannot receive more than 61 weeks of extended benefits 33% up to $390

For further information visit the Government of Canada website.

Other Leave

In Ontario, employees are entitled to:

  • 2 days of mandatory leave for the bereavement of a family member
  • Approximately 8 weeks of leave for compassionate care leave
  • Up to 3 days of unpaid leave for family responsibility leave
  • Up to 28 weeks per year of unpaid leave for Family Medical leave.
  • Up to 37 weeks of leave in the case of a critical illness
  • Up to 104 weeks in the event of the death of an employee’s child, or in the case that the child has disappeared.
  • All employers must provide their full-time, regularly employed employees, job-protected, unpaid leave for their duty as jurors or as a witness in a case, responding to a subpoena, or acting as a plaintiff or defendant in the courts. Employees must provide a copy of the jury summons to the employer as evidence of the requirement.
    • Reservist Leave regulations require employers to provide up to 20 days of unpaid leave each calendar year for annual training for reservists once they have completed at least 26 consecutive weeks of service with the same employer. An employee may take reservist leave for the following reasons:
      • Deployment to Canadian forces operation outside Canada
      • Deployment to Canadian forces operation inside Canada that is assisting with an emergency or the aftermath of an emergency
      • Annual training, including related travel time, for up to 20 days in a calendar year
      • Other operations set out as such in the Employment Standards Regulation by the minister


Termination Process

The termination process is standard in Ontario, Canada. It is based on termination reasons within the General Labor Law, unless an employer can provide sufficient cause for dismissal without notice (i.e., due to misconduct).

Notice Period

In general, notice periods in Ontario are stipulated within the employment contract or collective agreement and is linked to the reason for termination and the employee’s length of service:

  • Up to 2 years of employment: 1 weeks’ notice
  • 2-4 years of employment: 2 weeks’ notice
  • 4-6 years of employment: 4 weeks’ notice
  • 6-8 years of employment: 5 weeks’ notice
  • 8-10 years of employment: 6 weeks’ notice
  • 10+ years of employment: 8 weeks’ notice

Severance Pay

To be eligible for severance pay, an employee must have completed at least five years of employment, or the company has a payroll of over 2.5 million CAD per year or have terminated over 50 employees in the past six months due to all or part of the company closing to receive severance payments. The severance pay calculation is based on one week’s regular salary rate per year of employment.

Probation Period

Probation period in Ontario for a permanent employee is generally a minimum of 3 months.

Common Benefits


Cell Phone, internet allowance, and car allowance.

Supplementary health care/dental plan – typically covers costs of items or care that is not covered by Canada’s universal healthcare system such as prescription drugs or vision ware.

Private pension contribution of the employer (2-6 % of base salary).



The Government of Canada operates the Temporary Foreign Worker Program to enable foreign citizens to apply to work in Canada for a set period. The program covers all job roles and knowledge levels, and it can be used when a qualified Canadian citizen or permanent resident is not available or suitable for the role. There are federal (Government of Canada) immigration programs and provincial programs (Government of Ontario) in place in Ontario.



Canadian Federal GST is charged at 5%. Ontario PST is 8%, resulting in a combined GST and PST rate of 13.00%.

Stay up to date on payroll & employment law changes

Version History

May 23, 2022
Payroll contributions and personal income tax rates have been updated.
January 30, 2022
Minimum wage increased to $15.00 CAD per hour.
Payroll contributions and personal income tax rates have been updated.
January 1, 2021
Canada Pension Plan contributions for the employee and employer contribution rates increased to 5.45%.
October 1, 2020
The general minimum wage raised by 25 cents, bringing the new rate to $14.25 an hour.

Questions & Answers

Notify of
Newest Most Voted
Inline Feedbacks
View all comments
Walter C.
Walter C.
2 years ago

Are employees who work on Sundays or in a late shift entitled to higher pay for those hours?

Alex Margolin
Alex Margolin
2 years ago
Reply to  Walter C.

Hi Walter, thanks for your question.

There is no law that requires you to pay more to employees who work on Sundays or late at night.

1 year ago

how much insurance normally does the employer pay annually to its employee?

Emily Kuhnert
Emily Kuhnert
1 year ago
Reply to  erez

Hi Erez, thank you for your question. Are you referring to private health insurance or something else?

1 year ago
Reply to  Emily Kuhnert

Yes private one. Like for instance what employer pays in the US but this time in canada

Emily Kuhnert
Emily Kuhnert
1 year ago
Reply to  Erez

This really varies based on multiple factors, including what kind of private insurance this covers (i.e. dental, dependents, etc.), job title, and more.

Dave Patriarche
Dave Patriarche
1 year ago
Reply to  erez

generally about $3,500 to $5,500 for a typical life, LTD, health and dental plan.

1 year ago

My employees (Ontario business) were paid stat hours for Christmas, Boxing Day and New Years Day even though we closed for the first week of January (when we would normally have been open) giving everyone time off and I understand that we could have skipped paying the stats since we gave a day off in lieu of said stat holiday so now my question is regarding Family Day. Because we paid for three stats when we didn’t need to, am I required to pay FD stat or can I explain that the stats paid over Christmas were a bonus basically? And an error on my part? (Also, FD falls on a Monday and we are always closed on Mondays). If anyone can assist me with this thank you in advance.

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Catherine

Based on the info provided, the day off in lieu (substitute holiday) would be if they had to work on the stat and were paid regular wages but given another day off in lieu to avoid paying time and a half. They will still receive stat pay for the day off in lieu and this agreement would need to be in writing and agreed upon by the employee. I believe these workers had a week off however this wasn’t paid. They would still be entitled to stat pay. As long as they worked their regularly scheduled shift before and after the stat holiday, which it sounds like they did.

Substitute holiday
A substitute holiday is an additional day off work that replaces a public holiday. Employees are entitled to be paid public holiday pay for a substitute holiday.
The substitute holiday must be scheduled no later than three months after the public holiday for which it was earned, or, if the employee has agreed to the substitute day off electronically or in writing, up to 12 months after the public holiday.
A substitute holiday must be documented in writing, with the public holiday being substituted, the date of the substitute holiday, and the date the statement was given to the employee. This statement must be provided to the employee before the public holiday.

1 year ago

Is there a requirement to verify right to work in Canada (similar to an I-9 in the US?) If so, what are the documentation requirements?

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Amelia

Employers must ask workers to provide their Social Insurance Number (SIN) in order for them to work.

5 months ago

How do we include RRSP contributions as an employer?

Download this guide to read later

Payroll and Benefits Guide in Canada – Ontario

Download Free Guide

See how Papaya can help you automate your global payroll or EoR whilst staying 100% compliant with local labor laws

The information provided in the Papaya Global Web site is provided for informational purposes only. The materials are general in nature; they are not offered as advice on a particular matter and should not be relied on as such. Use of this Web site does not constitute a legal contract or consulting relationship between Papaya Global and any person or entity. Although every reasonable effort is made to present current and accurate information, Papaya Global makes no guarantees of any kind. Papaya Global reserves the right to change the content of this site at any time without prior notice. Papaya Global is not responsible for any third party material that can be accessed through this Web site. The materials contained on this Web site are the copyrighted property of Papaya Global unless a separate copyright notice is placed on the material. Papaya Global grants each user a non-exclusive, non-transferable license to access and download, display and print one copy of the content of this Web site on a single computer solely for internal, business use, provided that the user does not modify the site content in any way and that all copyright and other notices displayed on the site content are retained. Other reproduction, distribution, republication and re-transmission of materials contained within this Web site require Papaya Global’s prior permission.
Download this guide to read later

Payroll and Benefits Guide
in Canada – Ontario

What’s covered in this guide:

  • Employer/employee contributions
  • Minimum wage
  • Working hours
  • Visa requirements

And more...

Download free guide
All questions are answered by our in-house compliance department working in conjunction with our local in-country partner for this specific country

Public Holidays Calendar

Canada – Ontario 2023
Day Date Holiday Notes
Sunday Jan-1 New Year’s Day
Monday Feb-20 Family Day
Friday Apr-7 Good Friday
Monday May-22 Victoria Day
Saturday Jul-1 Canada Day
Monday Aug-7 Civic Holiday
Monday Sep-4 Labour Day
Monday Oct-9 Thanksgiving
Monday Dec-25 Christmas Day
Tuesday Dec-26 Boxing Day