Cost to Hire an Employee in Canada (2026)

• Gross salary, usually paid monthly.
• Employer costs of about 9.4% at a CA$85,000 salary: CA$8,029 a year, of which the largest is canada Pension Plan (CPP).
• An EOR fee, if you hire without your own entity. The providers in our Canada guide publish starting prices of US$199–699 per employee per month.

Mandatory employer costs at a CA$85,000 salary (mid-level professional). Employee contributions and income tax come out of gross pay and aren't included.

Contribution ceilings mean employer costs can be a smaller share of higher salaries. Figures exclude the EOR fee.

• Employer CPP: 5.95% of earnings between C$3,500 and C$74,600 (2026)
• Employer CPP2: 4% of earnings between C$74,600 and C$85,000 (2026)
• Employer EI: 2.282% (1.4× the 1.63% employee rate) up to C$68,900 (2026)
• Ontario Employer Health Tax: 1.95% where total Ontario payroll is over C$400,000
• Minimum wage: Set by each province (and federally for federal sectors)
• Paid vacation (Ontario): 2 weeks a year, 3 weeks from 5 years; 4% / 6% vacation pay
• Public holidays (Ontario): 9 paid public holidays a year

• Group health and dental benefits (optional) (CA$3,000 / year): Extended health and dental plans are expected for professional roles in Canada; an estimate, priced by insurer and cover.
• Retirement savings match (optional) (4% of gross): Group RRSP or pension matching is common but not required; 3–5% of salary is typical.
• Figures are for an employee outside Quebec. In Quebec the employer pays QPP instead of CPP, lower EI, Quebec Parental Insurance Plan premiums, the Health Services Fund, the CNESST labour standards levy and workforce training contributions, so get a Quebec-specific quote.
• CPP, CPP2 and EI stop once annual earnings reach their ceilings, so employer contributions are a smaller share of higher salaries.
• Employee CPP and EI contributions and income tax are deducted from the employee's pay and are not employer costs.
• Vacation pay (at least 4% of earnings in Ontario, 6% after five years) is paid as part of wages, not on top of salary.
• Termination can add significant cost: statutory notice and, in Ontario, severance pay for longer-serving employees, plus any common-law notice the contract doesn't exclude.

Without your own entity in Canada, an Employer of Record can employ your hire for a monthly fee. The alternative is setting up your own Canadian corporation. See the comparison in our Canada guide and EOR vs local entity.