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Payroll and benefits guide

Canada

CapitalOttawa
Fiscal Year1 January - 31 December
Date Formatyyyy-mm-dd
CurrencyCAD (Canadian Dollar)
Payroll FrequencyBi-weekly
Employer Taxes8.23% + provincial costs
Employee Costs7.58% + CPP2

Overview

Languages
English, French
Income tax
14% – 33% (federal)
VAT
5%
Reduced rates: 0%. Goods and Services Tax (GST). Harmonized Sales Tax (HST) of 13%–15% applies in participating provinces, and some provinces add their own sales tax

Contributions

Employer

5.95%
Canada Pension Plan (CPP)On earnings from CAD 3,500 to CAD 74,600; maximum CAD 4,230.45/year (2026)
4%
Second additional CPP (CPP2)On earnings from CAD 74,600 to CAD 85,000; maximum CAD 416/year (2026)
2.282%
Employment Insurance (EI)1.4 times the employee rate; maximum CAD 1,572.30/year on insurable earnings up to CAD 68,900 (2026)
Varies
Provincial employer costsWorkers' compensation in every province, plus employer health tax in some provinces, such as Ontario and British Columbia
8.23% + provincial costs
Total employer costFederal figures outside Quebec, excluding CPP2

Employee

5.95%
Canada Pension Plan (CPP)Maximum CAD 4,230.45/year (2026)
4%
Second additional CPP (CPP2)On earnings from CAD 74,600 to CAD 85,000; maximum CAD 416/year (2026)
1.63%
Employment Insurance (EI)Maximum CAD 1,123.07/year (2026); 1.30% in Quebec
7.58% + CPP2
Total employee costFederal figures outside Quebec. Quebec uses the Quebec Pension Plan (QPP) and the Quebec Parental Insurance Plan (QPIP)

Authority Payments

Authority Payment
Canada Revenue Agency (CRA)
Paid To
Federal and provincial income tax withheld, CPP, and EI (employer and employee shares)
Due Date
By the 15th of the following month for regular remitters; larger employers remit more often
Method
Online banking, CRA My Business Account, or a financial institution
Authority Payment
Canada Revenue Agency (CRA)
Paid To
T4 slips and the T4 summary
Due Date
By the last day of February for the previous year
Method
Electronic filing
Authority Payment
Revenu Québec
Paid To
Quebec income tax, QPP, QPIP, and the health services fund for Quebec employees
Due Date
Generally by the 15th of the following month
Method
Online filing and payment

Minimum Wage & Working Hours

Minimum wage
CAD 18.15 / Hourly
Federal rate for federally regulated sectors, effective 1 April 2026. Provinces set their own rates, for example CAD 15.00 in Alberta, CAD 17.95 in Ontario (from 1 October 2026), and CAD 18.25 in British Columbia (from 1 June 2026)
Standard working hours
8 hours per day, 40 hours per week (federal)
Provincial thresholds vary, from 40 to 48 hours a week
Overtime
At least 1.5 times the regular rate

Leave

  • Annual leave2–4 weeksFederal: 2 weeks (4% vacation pay) after 1 year, 3 weeks (6%) after 5 years, and 4 weeks (8%) after 10 years. Provincial rules vary
  • Sick leave10 paid days per yearFederal medical leave with pay; provincial entitlements vary widely
  • Maternity leaveUp to 17 weeksFederal job-protected leave. EI pays up to 15 weeks of benefits to eligible employees
  • Parental leaveUp to 63 weeksFederal job-protected leave. EI pays standard (35 weeks) or extended (61 weeks) benefits, with extra weeks when parents share
  • Public holidays10 daysFederal general holidays; provinces set their own lists

Termination

Probation period
Usually 3 months; no statutory notice is required in the first 3 months under federal rules
Notice period
Federal: 2 weeks after 3 months of service; from 3 years, 1 week per completed year, up to 8 weeks
Severance pay
Federal: the greater of 2 days' wages per completed year of service or 5 days' wages, after 12 months
13th salary
Not mandatory
Notes
Provincial standards differ, and courts can award longer reasonable notice under common law

Benefits

  • Extended health and dental insuranceCommon

    Tops up public provincial health coverage; expected for most professional roles

  • Group retirement savings plan (RRSP) matchCommon

    A common way to supplement the CPP

  • Workers' compensation coverageMandatory

    Provincial workplace injury insurance funded by employer premiums

Visas & Work Permits

  • Employer-specific work permit with an LMIA

    Requirements
    A Labour Market Impact Assessment (LMIA) showing no Canadian worker is available

    Processing times vary by stream and country

  • Global Talent Stream

    Requirements
    An LMIA under the stream for in-demand tech and other high-skill roles

    Targets faster processing than standard LMIA routes

  • Intra-company transfer

    Requirements
    At least 1 year with a related company abroad in an executive, managerial, or specialized role

    LMIA-exempt

FAQ

Sources

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