HR Software for Canada
Leave Policy
Maternity Leave
Pregnant employees are entitled to 15 weeks of paid vacation. The leave can start as early as 12 weeks before the expected date of birth and last up to 17 weeks after the actual date of birth. The worker receives 55% of her average salary during this period and the government is responsible for this salary. The maximum salary payment is $638 per week.
The employee can extend the vacation by taking parental leave.
Paternity Leave
In Canada, there is no specific statutory paternity leave separate from parental leave.
Parental Leave
In Canada there are two options for parental leave, normal parental leave or extended parental leave. The CRA is responsible for paying for this leave.
| Benefit | Leave | Payment (% of salary) | Weekly Maximum |
|---|---|---|---|
| Standard parental | Up to 40 weeks, divided between both parents, with one parent not being able to receive more than 35 weeks of standard benefits | 55% | Up to 638 CAD |
| Extended parental | Up to 69 weeks split between both parents, but one parent cannot receive more than 61 weeks of extended benefits | 33% | Up to 383 CAD |
Parental leave cannot be extended.
Sick Leave
The entitlement to sick leave can vary depending on the federal state.
Pay & Tax
Minimum Wage Requirements
On April 1, 2022, the federal minimum wage will increase from $15.00 to $15.55 per hour. Those working in provinces or territories where the general minimum wage is higher will continue to receive the higher rate.
The minimum wage in Canada varies by province/territory.
Please refer to the relevant information for current wages:
Provinces
- Newfoundland and Labrador
- Prince Edward Island
- Nova Scotia
- New Brunswick
- Quebec
- Ontario
- Manitoba
- Saskatchewan
- Alberta
- British Columbia
Territories
- Nunavut
- Northwest Territories
- Yukon Territory
Individual Income Tax
Individuals pay federal taxes as well as provincial taxes depending on where they reside. Federal income tax ranges from 15% to 33%. Income tax is calculated according to a progressive rate.
| Income (Portion) | Tax Rate |
|---|---|
| Taxable income up to $53,359, plus | 15% |
| Taxable income over $53,359 up to $106,717, plus | 20.5% |
| Taxable income over $106,717 up to $165,430, plus | 26% |
| Taxable income over $165,430 up to $235,675, plus | 29% |
| Taxable income over $235,675, plus | 33% |
For provincial and territorial tax rates, see Canada Revenue Agency and Revenu Quebec.
Payroll Cost
Employer costs are roughly estimated at 8.23% to 14.63%, depending on the province in which the employee resides.
These are the employer costs for Ontario:
- Quebec Pension Plan (Quebec only) – 6.40%
- Quebec Parental Insurance Plan (Québec only) – 0.69%
- WSDRF – Workforce Skills Development and Recognition Fund (Québec only) – 1.0%
- Canada Pension Plan (excluding Quebec) – 5.95%
- Occupational Health Tax – 1.95% – 4.26% depending on the provincial government
- Employment insurance – 2.28%
- Worker’s Compensation – 0.18%-1.28% depending on the provincial government
- Mandatory private health insurance – CA$124-CA$420
- Health insurance administration fee – USD 15
Optional costs:
If employees are offered the optional retirement plan, the following monthly fees apply:
- Optional retirement plan service fee: USD 10
- Additional service fee for employer contribution to employee’s optional retirement plan (if applicable): $15
Overtime Pay & Maximum Hours
The standard working hours are 8 hours per day and 40 hours per week. Standard working hours are Monday to Friday. There are specific requirements depending on the federal state and industry. Pay for overtime is generally mandatory. Certain positions and professions are exempt from the overtime regulation, e.g. Employees with management tasks. The exemptions are complex and depend on the province in which the employee works. Hours worked outside of normal working hours are considered overtime. Employees can work a maximum of 8 hours of overtime per week. For hours beyond this, employees receive 150% of their salary.
Termination
Termination Requirements
Dismissals must take into account complex rules and the regulations of the country in which an employee is employed. Off-boarding is always carried out by the employer with the main participants. It may include ad hoc fees as well as required or recommended steps for specific termination cases.
Terminations in Canada can be very complex. Outside the probationary period, the employer in Canada cannot terminate at his own discretion and the termination must be for good cause.
Compliant terminations are:
- Voluntary by the employee
- By mutual agreement
- Unilaterally by the employer due to:
1. Probationary period
2. A material breach of the terms of this Agreement
3. Wrongdoing
4. Commitment of a competitive act by the employee
5. Refusal of the employee to perform the duties assigned to him by the contract - When the contract expires
Notice Period
The legal minimum notice periods for termination by the employee/employer vary depending on the province (Employment Standards Act). Our contracts have been drafted with this in mind and contain language designed to protect the customer if they wish to terminate an employment contract.
Severance for Employees
In Canada, severance pay is paid when an employee is terminated without cause, and severance pay is paid when an amicable separation is agreed or when an employee has been employed for at least 12 consecutive months.
At the federal level, eligible employees receive the greater of 2 days’ wages per year of service or 5 days’ wages. Severance payments vary depending on the federal state.
In order to protect you from unforeseen financial risks arising from the termination of the employment relationship, IceHrm applies a severance pay provision in all employment contracts in this country. IceHrm has extensive expertise in managing litigation risk around the world and our severance provision calculation is based on prevailing common law or statutory requirements and best local practices. If your employee resigns or is not entitled to severance pay, you will receive a refund of any unused amounts.
Statutory Time Off
Paid Time Off
Vacation pay varies by province in Canada. In general, employers in Canada are required to provide full-time employees with at least 15 vacation days per year. The vacation entitlement of part-time employees is credited proportionately to the 15 vacation days per year. These are the minimum legal requirements, but the common practice of employers in Canada is to provide 21 days of vacation.
Public Holidays
In Canada, public holidays depend on the province in which the employee is located. There are both national and province-wide holidays. Nationwide public holidays include:
- New Year
- Good Friday
- Canada Day
- Labor Day
- Christmas Day
Onboarding
Onboarding
Employees cannot sign the contract on the day they start work. Onboarding takes 1 working day after signing the SOW.
Additional Info
Employment Contract Details
Contracts must be written in English or French and can be bilingual. They must be in writing and signed by both parties.
A contract must contain:
- Name of the employee
- Employee’s address
- Role in the job
- Job description (with measurable tasks)
- Date of start of work
- Remuneration
- Vacation
- Services
- Completion
Probation Period
Probationary periods are not mandatory. There is no minimum probation period. The maximum duration of the probationary period is 90 days (3 months).