The minimum wage varies across provinces and territories in Canada. Below are the current minimum hourly wages for general labor:
Overtime pay is generally mandatory, except for certain managerial roles. Usually, overtime is compensated at 150% of the regular salary, and employees can work up to 8 hours per week beyond the standard working hours. The standard working hours vary by province and typically amount to around 40 hours per week, from Monday to Friday.
Mandatory benefits for Canadian employees include contributions towards Public Health Insurance, Employment Insurance, Workers' Compensation, Registered Retirement Savings Plan, and Pension Plan. Since Canada has a publicly funded healthcare system, there is no obligation for employers to provide health insurance. However, depending on the industry, private health insurance may be offered as a perk by employers.
To read more about these benefits, download the Canada Hiring Guide.
While there is no legal requirement for employers to offer bonuses to employees in Canada, many companies choose to provide annual or performance-based bonuses as part of their compensation package.
In Canada, employers typically process payroll twice a month, and many companies prefer the following schedule:
Individual taxes in Canada vary based on the individual's location. Federal individual tax rates are progressive and calculated as follows (as per 2023):
Additionally, Provincial and territorial tax rates are also applied.
In Canada, the provincial tax system functions in tandem with the federal tax system. Each province and territory independently establishes its own tax rates and brackets. While the federal government is responsible for collecting personal income taxes in most regions, each area sets its distinct rates and brackets, leading to varied tax burdens across the country. Quebec uniquely manages its own personal income tax collection. These provincial taxes are utilized to fund regional services and infrastructure and typically feature a progressive rate structure, akin to the federal approach.
Read more about Provincial Taxes and taxes for Non-Residents here.
In Canada, an employee agreement should contain essential details such as the employee's name, address, job role, a clear job description with measurable duties, start date, compensation, vacation entitlements, benefits, and a termination clause. The contracts must be written in either English or French and can also be bilingual.
Probation periods are not obligatory, and there is no set minimum period. However, the maximum probation period allowed is 90 days.
The notice period required for termination can vary depending on the Employment Standards Act of each province.
As an employee working for a federally regulated employer, you must be provided annual vacation and general holidays.
Annual Vacation Entitlement: Federally regulated employees are entitled to Annual Vacation Entitlement.
General Holiday Entitlement: As an employee working for a federally regulated employer, you are entitled to a day off with pay for the following 10 days, which are called general holidays:
Read more about the structure of Annual Vacation entitlement and the General Holidays here.
Here are the major leave types in Canada:
Read more about these leaves here.
In the event of termination without cause, termination pay is provided to the employee. On the other hand, severance pay is granted when there is a mutual separation agreement or when an employee completes a minimum of 12 consecutive months of employment. In federally regulated jurisdictions, eligible employees receive the greater of 2 days' wages per year of service or 5 days' wages as severance pay. The severance pay rates differ based on specific provincial regulations.
To work in Canada, individuals typically need a work permit and a visa. There are two main types of work permits:
The requirements for obtaining a work permit usually include a job offer from a Canadian employer and a Labour Market Impact Assessment (LMIA) if required. Some work permits, like those under the International Experience Canada program, have different criteria. In addition to the work permit, individuals from certain countries may need a visitor visa or an Electronic Travel Authorization (eTA) to enter Canada. The specific requirements can vary based on the individual's nationality, occupation, and intended duration of stay in Canada.