Payroll and Benefits Guide - Canada - Ontario

Canada - Ontario
null

Currency

Canadian Dollar (CAD)
null

Capital

Toronto (State Capital)

null

Employer Taxes

11.852%

null

Date Format

yyyy/mm/dd
null

Fiscal Year

1 April – 31 March

Fun Facts

Ontario is the most populous province in Canada, with over 14 million residents, and it is home to the country’s largest city, Toronto.

Ontario comes from the Iroquois word “Kanadario,” meaning “sparkling water” or “beautiful lake”.

Toronto, the capital city of Ontario, is a vibrant multicultural metropolis and the financial center of Canada.

Ontario is home to the largest freshwater lake in the world, Lake Superior.

Niagara Falls is one of the most iconic natural attractions in Ontario.

Ontario is home to the longest street in the world, Yonge Street.

Canada-Ontario

Contributions

Employee Payroll Tax

Canada Pension Plan (CPP)5.95%
Employment Insurance1.63%

Employer Payroll Tax

Canada Pension Plan (CPP)5.95%
Federal Employment insurance (maximum annual employer premium 61,500.00 CAD (EI) premiums2.282%
Workplace Safety Insurance1.67%
Health Tax1.95%

Payroll

Payroll Cycle

The first payment due to an employee must be made within one month. Wages must therefore be paid on a regular basis at intervals of no longer than 16 days, or one month in the case of supervisory staff. The salaries must be paid on the working day before pay day if it falls on a legal holiday.

13th Salary

The law makes no mention of thirteenth salary.

Work Hours and Week

The maximum working hours are 8 hours per day, 40 hours per week, with a maximum (with overtime) of 48 hours per week, as stated in the Employment Standards Labor Code.

Overtime

Employers are required to give their workers at least 150% of their usual hourly rate as overtime pay for all overtime hours worked, or one hour of paid time off.
Canada-Ontario

Leave

Paid Time Off

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

In the first five years of employment and after five years of employment, employees are entitled to vacation pay at the rate of 4.00% of the regular wage rate of pay.

Public Holidays

There are 21 In Ontario, there are 9 federal holidays. holidays.

Sick Days

There is a thirty day qualifying period for covered employees, so on December 31, employees who have been continuously employed for at least 30 days will be able to access their first three days of paid sick leave. The Canada Labour Code was updated with effect from December 1, 2022, to provide ten days of paid sick leave to employees in the federally regulated private sector (which is limited to specific industries). Employees will start accruing a fourth day on February 1, 2023, and they will keep doing so at a rate of one day each month, up to a total of 10 days per year.

Canada’s Employment Insurance sickness benefits were increased from 15 to 26 weeks starting on December 18, 2022. As a result, eligible persons who file a new claim on or after December 18, 2022, will be entitled to up to 26 weeks of Employment Insurance illness benefits, paid at a rate equal to 55% of their average weekly insurance earnings, with a weekly maximum of $650 in 2023.

Maternity Leave

If an employee has worked for the company for at least a year prior to the due date, they are eligible to up to 17 weeks of leave. Maternity leave must start no earlier than the 17th week before the anticipated due date and must terminate no later than 18 weeks later. The worker is entitled to at least two more weeks of maternity leave if the delivery happens after the anticipated date.

When there is a chance that the pregnancy will end prematurely or when the pregnancy poses a risk to the mother’s or the unborn child’s health, special maternity leave may start four weeks before the due date. A medical certificate and two weeks’ notice are necessary.

Maternity and parenting benefits are provided by employment insurance to:

  • Those who are absent from work due to being pregnant or having just given birth
  • The parents of a newborn or recently adopted kid who are absent from work
  • For 15 weeks, employees are entitled to 55% of their earnings, up to a weekly maximum of CAD 650.

Only those who are absent from work due to being pregnant or having just given birth are eligible for maternity benefits. They are not transferable between parents.

Parental benefits may also be available to the person receiving maternity benefits.

Parental benefits may come after maternity benefits. Both applications can be made at once.

Paternity Leave

Parental leave includes paternity leave.

Parental Leave

For the purpose of caring for a newborn or adopted child, parents are entitled to up to 63 weeks of leave. Before the week of the baby’s birth or after the child is formally adopted, the parental leave cannot start.

No later than 78 weeks after the birth or adoption, the leave should start.

Maternity and parenting benefits are provided by employment insurance to:

  • Those who are absent from work due to being pregnant or having just given birth
  • The parents of a newborn or recently adopted kid who are absent from work

Termination

Termination Process

Ontario, Canada’s termination procedure is standard. It is based on grounds for termination under the General Labor Law, unless an employer can show that there is good cause for immediate termination (for example, due to misconduct).

Notice Period

In Ontario, notice periods are typically outlined in the employment contract or collective agreement and are related to the reason for termination and the length of the employee’s service:

  • After two years of employment, provide one week’s notice.
  • 2 weeks of notice after 2-4 years of employment
  • 4 weeks of notice after 4-6 years of employment
  • 5 weeks of notice after 6–8 years of service
  • 6 weeks’ notice after 8 to 10 years of service
  • 8 weeks of notice after 10 years of service

Severance Pay

Employees must have worked for the firm for at least five years in order to be eligible for severance compensation. Additionally, the company’s payroll must exceed 2.5 million Canadian dollars annually, and more than 50 employees must have been let go in the previous six months as a result of the company’s closing entirely or in part. The formula for calculating severance pay uses the usual weekly wage rate for each year of work.

Probation Period

Probation Period

In Ontario, the minimum probationary term for a permanent job is typically three months.

Immigration

The Temporary Foreign Worker Program is run by the Canadian government and enables foreign nationals to apply to work in Canada for a specific amount of time. The program is offered when a qualified Canadian citizen or permanent resident is not available or not the right fit for the role, and it covers all employment roles and expertise levels. In Ontario, there are both federal (run by the Government of Canada) and provincial (run by the Government of Ontario) immigration programs.

VAT

GST is assessed at 5% in Canada. The PST rate in Ontario is 8%, making the total GST plus PST rate 13.00%.