Canadian Employer Rates and Thresholds 2026

Employers match the employee's Canada Pension Plan contribution. In 2026 the employer pays 5.95% on earnings between the C$3,500 basic exemption and the C$74,600 year's maximum pensionable earnings, a maximum of C$4,230.45.

The second contribution, CPP2, is 4% on earnings between C$74,600 and the C$85,000 second ceiling, a maximum of C$416.00. Both are matched by the employee.

Employers deduct CPP contributions from employees aged 18 to 69 in pensionable employment and contribute an equal amount, and deduct EI premiums and contribute 1.4 times the employee premium. For employees whose province of employment is Quebec, the employer deducts QPP contributions instead of CPP, and reduced EI premiums plus Québec Parental Insurance Plan premiums.

The employee pays EI premiums of 1.63% of insurable earnings in 2026, and the employer pays 1.4 times that: 2.282% on insurable earnings up to C$68,900, a maximum of C$1,572.30 per employee. Lower rates apply in Quebec, where employers also pay Québec Parental Insurance Plan premiums.

From 1 January 2027 the employee rate rises to 1.64% on insurable earnings up to C$70,800, so the employer maximum rises to C$1,625.57.

CPP, CPP2 and EI all stop at annual ceilings, so they cost less as a share of higher salaries. Employer amounts for 2026, outside Quebec:

Outside Quebec, four provinces charge an employer health or education payroll tax, based on the employer's total payroll in the province. An Employer of Record's payroll is usually above every exemption, so through an EOR you'll normally pay the top rate. Quebec's Health Services Fund contribution is set separately and isn't shown.

Each province and territory sets its own general minimum wage. The federal rate applies to federally regulated sectors such as banking, telecoms and interprovincial transport, and if the province's rate is higher, the higher rate applies.

Each province runs its own workers' compensation board, with premiums set by industry. In Ontario, WSIB premiums are charged per C$100 of insurable earnings up to C$121,700 in 2026; the average rate is C$1.23, and office and professional classes are much lower.

• At least 2 weeks of vacation time after each 12-month vacation entitlement year, and 3 weeks once the employee has 5 or more years of employment. Vacation pay is at least 4% of gross wages (6% with 5 or more years) and is earned from the first hour worked, even if the employee leaves before completing a year. Employers may set an alternative entitlement year (such as the calendar year), with pro-rated vacation for the stub period before it.
• 9 public holidays a year: New Year's Day, Family Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Christmas Day and Boxing Day. Qualifying employees, however recently hired, take the day off with public holiday pay (regular wages and vacation pay from the previous four work weeks, divided by 20), or can agree in writing to work it for premium pay or a substitute day off. Easter Monday, the August Civic Holiday and Remembrance Day are not required.
• Up to 3 days of unpaid, job-protected sick leave each calendar year for personal illness, injury or medical emergency, once the employee has worked for the employer for at least 2 consecutive weeks. Since 28 October 2024, employers cannot require a medical note for this leave.

• Up to 8 hours a day (or the established regular workday, if longer) and 48 hours a week. Either limit can be exceeded only by an electronic or written agreement, made after the employer gives the employee the Ministry's hours of work and overtime information sheet; the employee can cancel it with 2 weeks' written notice. Employees must get at least 11 consecutive hours off each day, 8 hours between shifts, and 24 consecutive hours off each week (or 48 in every two weeks). An agreement to work longer hours doesn't remove the obligation to pay overtime.
• 1.5× the regular rate for hours over 44 in a work week, including for employees on a fixed salary (the salary covers hours up to 44). By written or electronic agreement, overtime can be banked as 1.5 hours of paid time off per overtime hour, taken within 3 months (or 12 months if agreed); unused banked time is paid out when employment ends. Managers and supervisors whose work is managerial or supervisory are exempt, and some other job categories are exempt or have a higher threshold (Ontario's special rule tool lists them).

After 3 months' continuous employment, written notice or pay in lieu: 1 week (under 1 year), 2 weeks (1 to under 3 years), then 1 week per year of service up to 8 weeks (8 years or more). During the notice period the employer cannot cut pay or change terms, must keep up benefit plan contributions, and must pay at least regular wages for a regular work week. Special rules apply when 50 or more employees are terminated within four weeks. Common-law reasonable notice can be much longer unless the contract validly limits it.

• Severance pay: Owed when employment is severed and the employee has worked for the employer for 5 or more years (all time with the employer counts, continuous or not), if the employer has a global payroll of at least C$2.5 million or severed 50 or more employees in six months because all or part of the business permanently closed. The amount is regular wages for a regular work week times completed years of service plus completed months of an incomplete year ÷ 12, up to 26 weeks. Notice weeks, worked or paid in lieu, count toward service. It is on top of termination notice, and an employee who resigns with 2 weeks' written notice during the statutory notice period keeps the right to it.