Payroll and Benefits Guide Canada – Ontario
Last updated: May 23, 2022
Contributions
Employer
Employer Payroll Contributions
| 7.91% + 1.37 CAD for every 100 CAD | Total Employment Cost |
| 5.70% | Canada Pension Plan (CPP) |
| 2.21% | Employment Insurance (EI) premiums |
| 1.37 CAD for every 100 CAD | Workers Compensation contribution (WSIB insurance, assigns a schedule rate based on the products produced, the services provided, and the processes, technology, or materials used. The premium for Schedule 1 is an average rate of 1.37 CAD for every 100 CAD of insurable payroll in 2022) |
Employee
Employee Payroll Contributions
| 5.70% | Canada Pension Plan (CPP) Maximum pensionable earnings 64,900 CAD Annual basic exemption 3,500.00 CAD Maximum contributory earnings 58,100.00 CAD Maximum employer & employee contribution 3,499.85 CAD |
| 1.58% | Employment Insurance (Maximum annual insurable earnings of 60,300.00 CAD, maximum annual employee premium 952.74 CAD |
Ontario Health Premium
| 7.28% + Health Premium | Total Employee Cost |
| 0.98% | Up to 200,000 CAD |
| 1.101% | 200,000 CAD to 230,000 CAD |
| 1.223% | 230,000 CAD to 260,000 CAD |
| 1.344% | 260,000 CAD to 290,000 CAD |
| 1.465% | 290,000 CAD to 320,000 CAD |
| 1.586% | 320,000 CAD to 350,000 CAD |
| 1.708% | 350,000 CAD to 380,000 CAD |
| 1.829% | 380,000 CAD to 400,000 CAD |
| 1.95% | More than 400,000 CAD |
Employee
Employee Income Tax
Federal:
| 15.00% | up to 50,197.00 CAD |
| 20.50% | 50,197.01 CAD to 100,392.00 CAD |
| 26.00% | 100,392.01 CAD to 155,625.00 CAD |
| 29.00% | 155,625.01 CAD to 221,708.00 CAD |
| 33.00% | 221,708.00 CAD and over |
Ontario:
| 5.05% | Up to 46,226 CAD |
| 9.15% | 46,226.01 CAD – 92,454.00 CAD |
| 11.16% | 92,454.01 CAD – 150,000.00 CAD |
| 12.16% | 150,000.00 CAD – 220,000.00 CAD |
| 13.16% | 220,000.00 CAD and over |
Employee Income Tax
Ontario Basic Personal Amount
| 5.05% | 2022 Tax Rate |
| 11,141 CAD | 2022 Personal Amount |
Federal Basic Personal Amount
| 15% | 2022 Tax Rate |
| 14,398 CAD | 2022 Personal Amount See the federal tax rates page for information on the enhanced federal personal amount, which increases the marginal tax rates for taxable incomes in the second highest federal tax bracket |
Employer taxes
Employee taxes
Minimum Wage
General
The minimum wage in Ontario is $15.00 CAD per hour. (Potential increase due October 2022)
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. CAD
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
In Ontario, pay cycles occur monthly, semi-monthly, bi-weekly, and hourly. For monthly paid employees, they must receive their pay within ten consecutive days from the end of the pay period.
13th Salary
There are no provisions in the law regarding 13th salaries.
Working Hours
General
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.
Overtime
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
Monday-Friday
Leave
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.
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.
Sick Days
Eligible employees who have worked for the same employee for at least three consecutive months are entitled to up to 3 days of unpaid leave per year due to a personal illness, injury, or medical emergency.
Maternity Leave
Employees are entitled to up to 17 weeks of unpaid 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.
PAID MATERNITY LEAVE (DAYS)
Paternity Leave
Paternal leave falls under parental leave.
Parental Leave
Parents are entitled to up to 63 weeks of unpaid 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.
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
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
General
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).
VISA
VISA
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.
VAT
General
Canadian Federal GST is charged at 5%. Ontario PST is 8%, resulting in a combined GST and PST rate of 13.00%.
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Questions & Answers
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Payroll and Benefits Guide
in Canada – Ontario
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Day | Date | Holiday | Notes |
|---|---|---|---|
| Thursday | Feb-23 | Family Day | |
| Tuesday | Jul-4 | Good Friday | |
| Saturday | Jan-7 | Canada Day | |
| Sunday | Apr-9 | Labour Day | |
| Sunday | Apr-9 | Christmas Day | |
| Thursday | Feb-23 | Christmas Day | |
| Thursday | Feb-23 | Boxing Day |
Are employees who work on Sundays or in a late shift entitled to higher pay for those hours?
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.
how much insurance normally does the employer pay annually to its employee?
Hi Erez, thank you for your question. Are you referring to private health insurance or something else?
Yes private one. Like for instance what employer pays in the US but this time in canada
This really varies based on multiple factors, including what kind of private insurance this covers (i.e. dental, dependents, etc.), job title, and more.
generally about $3,500 to $5,500 for a typical life, LTD, health and dental plan.
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.
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.
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?
Employers must ask workers to provide their Social Insurance Number (SIN) in order for them to work.