Canada – Ontario
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Introduction
General Overview & Economic Facts
- Ontario is one of the thirteen provinces in the western Canada and is located on the continent of North America
- It spans an area of 1,076,395 km2 (415,598 mi2) and has a population of approximately 2.6 million
- Tourism is a major contributor of Ontario’s economy especially in the warmer seasons. The province is also a leading manufacturer for the country
- Canada’s economy ranks 9th by nominal GDP (2021) and 15th by PPP (2020)
- Canada ranks fairly high in terms of human development with a ranking of 16 on the HDI
Why Employ In Canada – Ontario?
- The main exports from Ontario include motor vehicle parts, electrical and mechanical machinery and precious metals
- 11.14% of Canada’s population is between the ages of 15 and 24 years, with 39.81% of the population being between the ages of 25 and 54. Canada has a fairly youthful population, making it a favourable country to employ young, energetic employees
Overview Of The Labour Law
- Employment relationships in Canada are governed by statutes, the common law and employment agreements
- The main source of labour law in Canada is the Canada Labour Code
- The labour regulations cover matter such as working hours, overtime, leaves, vacation and public holidays, minimum wage, termination procedures and severance payments
- Labor law in the Canada protects both employers and employees
Fun Country Facts
- Ontario was home to a WWII spy school
- The longest skating rink in the world is in Ontario
- The Diefenbunker bunker is the world’s largest escape room
Why Use Playroll Services For Canada – Ontario?
- Employing in Ontario requires companies to have their own legal entity in the country as well as managing payroll, employee benefits, taxes and legal compliance. This can get quite complicated, especially with the complexity of employment laws in Ontario.
- With Playroll’s Employer of Record services, your team will be employed by our established legal entities in each country
- We will take care of payroll, employee benefits, taxes, legal compliance and provide ongoing employee support, so that you can focus on growing your team
Employer Contributions
These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Unemployment Insurance (EI)
2.212%
Calculated on a maximum salary CAD 60,300 per annum
Canada Pension Plan (CPP)
5.70%
Before taking basic pay exemption into account. Calculated on a minimum salary of CAD 3,500.00 and a maximum salary of CAD 64,900.00 per annum
Ontario Health Premium (OHP)
Employers can pay their employees’ health premium by increasing their salaries, or reimbursing the employees for the premium that needs to be paid
Employer’s Health Tax (EHT)
0.98%
Minimum payroll of CAD 200,000.01 and a maximum payroll of CAD 230,000.00 per annum
1.10%
Minimum payroll of CAD 230,000.01 and a maximum payroll of CAD 260,000.00 per annum
1.22%
Minimum payroll of CAD 260,000.01 and a maximum payroll of CAD 290,000.00 per annum
1.34%
Minimum payroll of CAD 290,000.01 and a maximum payroll of CAD 320,000.00 per annum
1.47%
Minimum payroll of CAD 320,000.01 and a maximum payroll of CAD 350,000.00 per annum
1.59%
Minimum payroll of CAD 350,000.01 and a maximum payroll of CAD 380,000.00 per annum
1.71%
Minimum payroll of CAD 380,000.01 and a maximum payroll of CAD 400,000.00 per annum
1.83%
Minimum payroll of 400,000.01 per annum
1.95%
Employee Contributions
These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Employment Insurance (EI)
1.58%
Calculated on a maximum salary CAD 60,300.00 per annum
Canada Pension Plan (CPP)
5.70%
Before taking basic pay exemption into account. Calculated on a minimum salary of CAD 3,500.00 and a maximum salary of CAD 64,900.00 per annum
Ontario Health Premium (OHP)
Minimum taxable income of CAD 0.00 and a maximum payroll of CAD 20,000.00 per annum
0.00%
Minimum taxable income of CAD 20,000.01 and a maximum payroll of CAD 36,000.00 per annum
6% on income greater than CAD20,000 to a maximum of CAD300
Minimum taxable income of CAD 36,000.01 and a maximum payroll of CAD 48,000.00 per annum
CAD300 + 6% on income greater than CAD36,000 to a maximum of CAD450
Minimum taxable income of CAD 48,000.01 and a maximum payroll of CAD 72,000.00 per annum
CAD450 + 25% on income greater than CAD48,000 to a maximum of CAD600
Minimum taxable income of CAD 72,000.01 and a maximum payroll of CAD 200,000.00 per annum
CAD600 + 25% on income greater than CAD72,000 to a maximum of CAD750
Minimum taxable income of 200,000.01 per annum
CAD750 + 25% on income greater than CAD200,000 to a maximum of CAD900
Minimum taxable income of CAD 0.00 and a maximum payroll of CAD 20,000.00 per annum
0.00%
Minimum taxable income of CAD 20,000.01 and a maximum payroll of CAD 36,000.00 per annum
6.00% on income greater than CAD 20,000.00 to a maximum of CAD 300.00
Minimum taxable income of CAD 36,000.01 and a maximum payroll of CAD 48,000.00 per annum
CAD 300.00 + 6.00% on income greater than CAD 36,000.00 to a maximum of CAD 450.00
Minimum taxable income of CAD 48,000.01 and a maximum payroll of CAD 72,000.00 per annum
CAD 450.00 + 25.00% on income greater than CAD 48,000.00 to a maximum of CAD 600.00
Minimum taxable income of CAD 72,000.01 and a maximum payroll of CAD 200,000.00 per annum
CAD 600.00 + 25.00% on income greater than CAD 72,000.00 to a maximum of CAD 750.00
Minimum taxable income of 200,000.01 per annum
CAD 750.00 + 25.00% on income greater than CAD 200,000.00 to a maximum of CAD 900.00
Income Tax
Income Tax is ‘Pay As You Earn’
Calculated on taxable income
Federal income tax brackets per annum
0.00 – 50,197.00
15.00%
50,197.01 – 100,392.00
20.55%
100,392.01- 155,625.00
26.00%
155,625.01- 221,708.00
29.00%
221,708.01 or more
33.00%
State income tax brackets per annum
0.00 – 46,226.00
5.05%
46,226.00- 92,454.00
9.15%
92,454.01 – 150,000.00
11.16%
150,000.01 – 220,000.00
12.16%
220.000.01 or more
13.16%
Employment Terms
General
Minimum Wage
- General minimum wage- CAD 15.00 per hour
Working Hours
- Maximum of 8 hours per pay and 44 hours per week
- Minimum meal interval of 30 minutes after 5 or more hours of work
- Typical working hours are 09h00 to 17h00, Monday to Friday
Overtime
- Maximum of 4 hours per day
Notice Period
- Employed between 0 and 1 year- 1 week’s notice
- Employed between 1 and 3 years- 2 weeks’ notice
- Employed between 3 and 4 years- 3 weeks’ notice
- Employed between 4 and 5 years- 4 weeks’ notice
- Employed between 5 and 6 years- 5 weeks’ notice
- Employed between 6 and 7 years- 6 weeks’ notice
- Employed between 7 and 8 years- 7 weeks’ notice
- Employed for 8 or more years- 8 weeks’ notice
Severance Pay
- Maximum of 26 weeks
- Employees are not entitled to severance pay if they are employed for less than 3 months
- Severance pay is calculated by multiplying the employee’s regular wages for a regular work week by the sum of:
– The number of completed years of employment
– The number of completed months of employment divided by 12 for a year that is not completed
Probation Period
- There is no statutory probation period
- It is common to have a probation period of 3 months
Bonus
- There is no statutory bonus
Public Holidays
Public holidays 2022
- January 1st – New Year’s Day
- February 21st – Ontario Family Day
- April 15th – Good Friday
- May 23rd – Victoria Day
- July 1st – Canada Day
- September 5th – Labour Day
- October 10th – Thanksgiving Day
- December 25th – Christmas Day
- December 26th – Boxing Day
Leave
Paid Leave / Vacation Days
- Paid leave
- Paid by employer
- Employed between 1 and 5 years- 2 weeks
- Employed for 5 or more years- 3 weeks
Sick Leave
- Unpaid leave
- 3 days
Maternity Leave
- Unpaid leave
- 17 weeks
Paternity Leave
- Part of parental leave
Parental Leave
- Unpaid leave
- If mother has taken maternity leave- 61 weeks
- Other parents who have not taken maternity leave- 62 weeks
Family Responsibility Leave
- Unpaid leave
- 3 days per year
Family Caregiver Leave
- Unpaid leave
- 8 days per family memeber
Adoption Leave
- Part of parental leave
Family Medical Leave
- Unpaid leave
- 28 weeks per year
Critical Illness or Injury Leave
- Unpaid leave
- Critical illness or injury of child- 37 weeks
- Family member- 17 weeks
Bereavement Leave
- Unpaid leave
- 2 days
Crime-related Child Death or Disappearance Leave
- Unpaid leave
- 104 weeks
Domestic or Sexual Violence Leave
- Partially paid leave
- Paid by employer
- Minimum of 10 days, maximum of 15 weeks