Overview

Capital
Toronto
Currency
Canadian Dollar
Date Format
yyyy-mm-dd

Taxes

Employer
1.6% - Employment Insurance
5.1% - Pension Fund
Employee
1.62% - Employment Insurance
5.1% - Pension Fund
5.15% - up to $43,906
9.15% - 43,906 - 87,813
11.16% - 87,813 - 150,000
12.16% - 150,000 - 220,000
13.16% - 220,000 and up
15% - up to $47,630
20.5% - $47,630 up-to $95,259
26% - $95,259 up-to $147,667
29% - $147,667 up-to $210,371
33% - $210,371

Minimum Wage

General

The minimum wage in Ontario is 14.00 CAD/hour.  As of June 1, 2020, the minimum wage will change to 14.60 CAD/hour

Working Hours

General

Full time work is considered 40 hours weekly and 8 hours daily.

Overtime

Overtime pay is paid for every hour after 44 hours weekly at a rate of at least 1.5 times regular wage rate. The maximum number of hours an employee can work is 48 hours a week unless agreed upon in writing by the employee and employer.     

Exemptions or Special Rules

In Ontario most employees are covered by the Employment Standard Act which provides minimum rights, responsibilities and standards for employees and employers in most workplaces.

These standards include: hours worked & overtime, minimum wage, employment termination, holidays, leave, severance pay, vacation, tips & gratuity.

However, certain industries and jobs are not completely covered by the Employment Standard act. These employees who are not covered by all parts are known as “exemptions”. Employees can also be covered by special rules that change how the act applies to them.Before hiring an employee it’s important to know if their job places them under the full Employment standard act, exemptions, or special rule changes. By not properly determining your employee’s status and classifying them correctly, can lead to regulation issues and payroll complications.

For instance, a main payroll issue that can arise is overtime pay.The ministry of labour in Ontario requires that employees receive overtime unless their job description fits the criteria as exempt from overtime provisions. So if you believed your employee was exempt, but is in fact not, you would then be obligated to pay them 1.5 times the regular rate or 1.5 hours of vacation for each hour of work exceeding the weekly 44 hours in addition to their usual pay. They will also be required to fill in time-sheets for attendance by the hour and paid bi-weekly.

Other employment standards differ depending on job or industry, so in order to avoid complications see the full list of jobs that have exemptions and special rules applied to them. As well as industries and jobs that are not covered by the Employment Standards Act.

VAT

General

13% Harmonized Sales Tax (HST)

Mandatory Benefits

Pension Fund

The Canada Pension Plan (CPP) is 10.2% split equally between employee and your employer. It is a 9.9% for the base, or original CPP, and 0.3% for the CPP enhancement which began to be phased in on January 1, 2019.

Payroll

Payroll Cycle

Salaries are paid bi weekly, bi-monthly or monthly. The paydays are decided between the employee and employer.

Termination

Termination Process

If an employee has been employed for at least 3 months, the employer is obligated to provide the employee with a written notice of termination or termination pay.

There are some circumstances where the employer is not obligated to give notice (and are not eligible for severance pay):

  • Misconduct, disobedience, or neglect on part of the employer
  • For temporary layoff
  • Employees who have been employed f or less than 3 months
  • An employee who declines an offer an alternative position

The employer is not obligated to provide a reason for termination.  

 

Advance Notice

The employee is obligated to give at least 2 weeks’ notice. 

The length of the notice period that the employer is obliged to depends on how long the employee has been employed:

 

Length of employment

Notice Period

Less than 1 year

1 week

1-3 years

2 weeks

3-4 years

3 weeks

4-5 years

4 weeks

5-6 years

5 weeks

6-7 years

6 weeks

7-8 years

7 weeks

8+ years

8 weeks

Severance Pay

Severance pay is the employees regular work week wage multiplied by the sum of the number of completed years of employment and the number of completed months, divided by 12 for a year that is not completed. A max of 26 weeks severance pay is given.

 

Termination Pay

If worker does not receive adequate notice of their termination, they are to receive pay in lie.