Most Canadian employees are covered by the employment standards law of the province or territory where they work. Federally regulated industries, such as banking, telecoms and interprovincial transport, follow the Canada Labour Code instead. This guide uses the federal rules and national payroll deductions as its baseline.
The figures below are the Canada Labour Code minimums for federally regulated employers. Provinces and territories set their own minimums, which are often similar but not identical, so always check the rules where each employee works.
After 1 year of service, with 4% vacation pay. Rises to 3 weeks (6%) after 5 years and 4 weeks (8%) after 10 years.
Earned after 30 days of service (3 days), then 1 day a month. Unused days carry over up to 10 days.
Job-protected unpaid leave. Income is replaced through Employment Insurance (EI) maternity benefits.
Available to each parent, up to 71 weeks in total when shared. Must be taken within 78 weeks of the birth or adoption.
Employers do not have to pay wages during maternity or parental leave. Eligible parents receive EI benefits instead: 15 weeks of maternity benefits, then either standard parental benefits (up to 40 weeks shared, at 55% of average insurable earnings) or extended parental benefits (up to 69 weeks shared, at 33%). There is no separate paternity leave; fathers and partners use parental leave. Quebec runs its own Quebec Parental Insurance Plan (QPIP) in place of EI parental benefits.
Set up each leave type in IceHrm with its own accrual, carry forward and approval rules, and use separate leave groups when staff in different provinces have different entitlements. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
The federal minimum wage is adjusted on 1 April each year in line with inflation. Each province and territory also sets its own minimum wage, and employers must pay whichever rate is higher.
From 1 April 2026, for federally regulated employers. Provincial rates apply to everyone else.
Under the Canada Labour Code, with a general maximum of 48 hours a week.
Time and a half for hours beyond the standard hours. Some provinces use a 44-hour weekly threshold instead.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so daily and weekly overtime thresholds reflect what was actually worked. Time & attendance →
Canadians pay federal income tax plus provincial or territorial income tax, based on where they live on 31 December. Employers withhold both from every pay and remit them to the Canada Revenue Agency (CRA); Quebec residents file a separate provincial return with Revenu Québec.
| Taxable income | Federal rate |
|---|---|
| C$0 – C$58,523 | 14% |
| C$58,523 – C$117,045 | 20.5% |
| C$117,045 – C$181,440 | 26% |
| C$181,440 – C$258,482 | 29% |
| Over C$258,482 | 33% |
Employers match employee pension contributions and pay a higher share of EI premiums. Provinces add workers’ compensation premiums and, in some provinces, a payroll or health tax.
| Contribution | Employer | Employee |
|---|---|---|
| Canada Pension Plan (CPP) | 5.95% | 5.95% |
| Second additional CPP (CPP2) | 4% | 4% |
| Employment Insurance (EI) | 2.282% | 1.63% |
Build Canadian pay the way you already structure it, with your own salary components, deductions and formula columns, such as CPP and EI contribution columns. Want to know how well IceHrm handles payroll calculations for Canada? Contact us or see Payroll →
Canadian employment is not “at will”. Unless there is just cause, an employer must give statutory notice or pay in lieu, and courts may award longer “reasonable notice” under common law (outside Quebec) unless a valid contract clause limits it to the statutory minimum.
| Continuous service | Notice |
|---|---|
| 3 months to less than 3 years | 2 weeks |
| 3 years | 3 weeks |
| 4 years | 4 weeks |
| 5 years | 5 weeks |
| 6 years | 6 weeks |
| 7 years | 7 weeks |
| 8 years or more | 8 weeks |
Federally regulated employees with at least 12 months of continuous service are also owed severance pay: the greater of 2 days’ regular wages per completed year of service, or 5 days’ wages. Among the provinces, only Ontario has a comparable statutory severance entitlement, for larger employers.
Final pay includes outstanding wages and vacation pay. Employers must also issue a Record of Employment (ROE) to Service Canada so the employee can apply for EI.
Federally regulated employees get 10 general holidays with pay. Provinces and territories set their own lists, which usually include New Year’s Day, Good Friday, Canada Day, Labour Day and Christmas Day plus local days such as Family Day or Saint-Jean-Baptiste Day.
This is the Canada Labour Code list. Several days on it, such as Remembrance Day and Boxing Day, are not statutory holidays in every province.
Leave groups give each provincial office its own holiday calendar, so a team split across Ontario, Quebec and British Columbia gets the right days off automatically. Holiday calendars →
Written contracts are not required by law but are standard practice, and a clear termination clause is the main way to limit common law notice. A contract can never provide less than the applicable employment standards. In Quebec, contracts must be available in French.
Employment standards laws do not create a formal probation period, but statutory notice usually only applies after about 3 months of service, so many employers use a 3 month probation. Longer probation periods must be set out in the contract.
Send offer letters and contracts for e-signing, store TD1 forms and work permits on the employee’s record, and track onboarding with task lists so nothing is missed on day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Canada, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Canada? Talk to us.
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