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Ontario offers competitive business climate
Basic costs for Ontario's employers
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A Guide to Employer Benefit Costs
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| Canada Pension Plan (CPP) |
* to maximum premium of US$1,868.12/year (2007)
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4.95% |
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4.95% |
| Employment Insurance Commission |
* to maximum premium of US$946**/year (2007)
** Unless a reduced premium rate applies
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2.52%** |
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2.52%** |
| Workplace Safety and Insurance Board |
| * Varies (depends on industry and # of employees) |
Rate for Motor Vehicle Assembly Operations (2007)
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2.76% |
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2.76% |
Employer's Health Tax (EHT)
Applied to eligible payroll over US$375,520
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1.95% |
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1.95% |
Vacation
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(2 weeks) |
4.00% |
(3 weeks) |
6.00% |
Paid Public Holidays
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(8 days) |
3.20% |
(11 days) |
4.40% |
Pension Contribution
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N/A |
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5-6% |
| Group Insurance |
* Life, Health, Sickness, Dental, Vision, Physical/Mental Fitness
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N/A |
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4-7% |
| TOTAL |
19.4% |
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31.6-35.6% |
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Source: Canada Revenue Agency; Workplace Safety and Insurance Board; Employment Standards Branch, Ministry of Labour; Ministry of Finance; Statistics Canada; AON Consulting (3/2007)
NOTES:
Common Practice of Employers for group insurance varies by industry sector.
Canada Pension Plan (CPP)
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The calculation of contributions is based upon earnings. |
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An employer is required to withhold and remit an amount on the employee’s behalf based upon a percentage of the employee’s contributory earnings up to an annual maximum. |
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Maximum annual contributory earnings for 2007: US$41,025.56. |
Source: Canada Revenue Agency (3/2007)
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Employment Insurance
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The calculation of contributions is based upon a percentage of insurable earnings. |
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An employer is required to withhold and remit an amount on the employee’s behalf based upon a percentage of the employee’s insurable earnings up to an annual maximum. |
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Maximum annual insurable earnings for 2007: US$37,552.00. |
Source: Canada Revenue Agency (3/2007)
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Workplace Safety and Insurance Board (WSIB)
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The calculation of the amount the employer must contribute is based upon the employer’s industry and the amount of payroll. |
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Based upon the industry that an employer is in, an employer will be assigned a certain premium rate, which is the dollar value that must be contributed per US$93.88 of payroll. |
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The 2007 average premium rate is US$2.12 for every US$94 of insurable earnings. |
Source: Workplace Safety and Insurance Board (3/2007)
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Employer Health Tax
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The amount of tax payable by an employer for the year is equal to the “taxable total Ontario remuneration” paid by the employer, multiplied by a particular rate based on the total annual Ontario remuneration. |
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The "taxable total Ontario remuneration" is the amount by which the total Ontario remuneration paid by the employer during the year exceeds the employer’s exemption amount for the year. For the year 2007 the exemption amount is US$375,520.00. |
Source: Employer's Health Tax Office, Ministry of Finance (3/2007)
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Vacation Pay
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When employees are on annual vacation, the employer pays them at least 4% of the wages they earned during the 12 months the vacation was earned. |
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Vacation pay is calculated only on an employee’s earned wages during those 12 months unless you have a better vacation plan than the minimum standard in the Act. |
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If a worker's employment ends before they take their vacation, you must pay them all of their vacation pay no later than seven (7) days after their employment ends. |
Source: Ministry of Labour (2/2006)
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Public Holidays
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The purpose of a public holiday is to provide employees with a paid day off.
Ontario has eight paid public holidays -
- New Year's Day
- Good Friday
- Victoria Day
- Canada Day
- Labour Day
- Thanksgiving Day
- Christmas Day
- Boxing Day (December 26th)
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If you have employees who qualify for paid public holidays, they are entitled to these days off and you are required to pay them for the day. |
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Common Practice (11 days) assumes the industry allows the following as Public Holidays, however these are not required under the Employment Standards Act.
- Easter Sunday
- Easter Monday
- First Monday in August
- Remembrance Day (not typically included)
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Source: Ministry of Labour (2/2006)
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