Question 1

What is the true cost of hiring an employee in Canada?

Accepted Answer

The true cost of an employee is typically 20-40% above their salary. Mandatory costs include: CPP employer contributions (5.95% up to maximum), EI employer premiums (1.66x employee rate), and provincial payroll taxes (varies by province). Additional costs include benefits, vacation pay, and workers compensation insurance.

Question 2

What is the CPP employer contribution rate for 2026?

Accepted Answer

In 2026, employers pay 5.95% of employee earnings between $3,500 and $73,200 for CPP contributions. The maximum employer contribution is approximately $4,150 per employee per year.

Question 3

What is Ontario EHT (Employer Health Tax)?

Accepted Answer

Ontario EHT is a payroll tax of up to 1.95% paid by employers on total Ontario payroll exceeding the exemption threshold. Small businesses with payroll under $1 million are exempt. Other provinces have similar payroll taxes: Manitoba has a 2.43% levy, Quebec has a Health Services Fund contribution.

Question 4

How much should I budget for employee benefits in Canada?

Accepted Answer

Typical benefit costs range from 5-15% of salary. Basic benefits (health/dental) cost $150-300/month per employee. More comprehensive packages including life insurance, disability, and RRSP matching can cost 10-15% of salary or more.

Contribution	Rate	Maximum	Notes
CPP (Employer)	5.95%	~$4,150	On earnings $3,500-$73,200
EI (Employer)	2.38%	~$1,564	1.4x employee rate, max insurable $65,700
Ontario EHT	1.95%	No max	Exempt if total payroll under $1M
Quebec HSF	4.25%	No max	Health Services Fund (replaces EHT)

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