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Canada
Know everything about hiring and compliance in Canada.
The minimum wage varies across provinces and territories in Canada. Below are the current minimum hourly wages for general labor:
- Alberta: $15.00
- British Columbia: $15.65
- Manitoba: $14.15
- New Brunswick: $14.75
- Newfoundland and Labrador: $14.50 (scheduled to increase to $15.00 by October 2023)
- Northwest Territories: $15.20
- Nova Scotia: $14.50 (scheduled to increase to $15.00 by April 2024)
- Nunavut: $16.00
- Ontario: $15.50
- Prince Edward Island: $14.50 (scheduled to increase to $15.00 by October 2023)
- Quebec: $14.25
- Saskatchewan: $13.00 (scheduled to increase to $15.00 by October 2024)
- Yukon: $16.77
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.
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:
1st payroll cycle (1st to 15th):
Payroll cut-off date: 4th of each month
Payment date: 15th day of each month
2nd payroll cycle (15th to last day):
Payroll cut-off date: 20th of each month
Payment date: last day of each month
Individual taxes in Canada vary based on the individual's location. Federal individual tax rates are progressive and calculated as follows:
Income up to $53,359: 15% tax
Income above $53,359 and up to $106,717: 20.5% tax
Income above $106,717 and up to $165,430: 26.0% tax
Income above $165,430 and up to $235,675: 29.0% tax
Income above $235,675: 33% tax
Additionally, Provincial and territorial tax rates are also applied. You can find the specific rates for each province and territory from the appropriate authorities.
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.
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.
Frequently asked questions
What are the mandatory employee benefits in Canada?
The mandatory benefits for employees in Canada include contributions towards the Public Health Insurance, Employment Insurance, Workers Compensation, Registered Retirement Saving Plan, and Pension Plan.
Are employers required to provide a bonus to employees in Canada?
There is no legal requirement for employers to provide a bonus to employees in Canada. However, many companies offer annual or performance-based bonuses as part of their compensation package.
What is the maternity leave policy in Canada?
In Canada, female employees are entitled to maternity leave of up to 15 weeks. The leave can start as early as 12 weeks before the expected date of birth and can end as late as 17 weeks after the actual date of birth. The employee will receive 55% of their average salary during this period, and the government will be responsible for this pay. The max salary payment is $638 CAD per week. The employee can extend leave through parental leave.
What are the public holidays observed in Canada?
The public holidays observed in Canada include New Year, Canada Day, Christmas, Good Friday and Labor Day.
How many sick leave days are employees entitled to in Canada?
The number of sick leave days can vary depending on the province where the company is located.
What are the legal requirements for terminating an employee in Canada?
Termination of employees can be complex. There is no at-will termination in Canada for the employer, outside the probation period, and termination must be done for just cause. Compliant terminations include: - When an employee voluntarily resigns - Through a mutual agreement between the employer and employee - Due to employee misconduct, breach of responsibilities, or unexplained absences from work - Refusal by an employee to perform job duties as assigned in agreement - Upon the expiration of the employment contract
How long is the notice period typically in Canada?
The notice period in Canada can vary as per the province's ESA (Employment Standards Act).
What documents are typically required during the employee onboarding process in Canada?
Compliance documents required at the time of onboarding: - Federal personal tax credit returns - Personal tax credits return based on province of residence - Void cheque or direct deposit form - Physical proof of SIN - Passport / ID - Proof of employment eligibility In addition to the above, provinces might require additional documents as well.
What are the components included in the employer cost breakdown in Canada?
The monthly employer cost breakdown in Canada typically includes: - Pension Plan: Quebec (6.40%) and Rest of Canada (5.95%) - Quebec parental insurance plan: 0.69% - Workforce skills development and recognition fund (Quebec only): 1.0% - Employment health tax: 1.95% to 4.26% - Employment insurance: 2.28% - Workers compensation: 0.18% to 1.28% - Mandatory private health insurance: $124 to $420 CAD - Health and safety training: $9.22 CAD - Health insurance admin fee: $19.76 CAD Overall, an employer will have to pay 11.34% extra of the gross salary on compliance.
Can employers have a probation period for new hires in Canada?
Probation periods are not mandatory. There is no minimum probation period and the maximum probation period is 90 days.
