Employer of Record in Canada: what one employee really costs

Questions people ask before booking a demo

How much do statutory employer contributions add to a salary in Ontario, Canada?

Five lines: CPP at 5.95% on earnings between the $3,500 basic exemption and the $74,600 ceiling, CPP2 at 4% on earnings between $74,600 and $85,000, EI at 2.282% (1.4 times the 1.63% employee rate) up to $68,900, Ontario EHT at 1.95% of all pay, and WSIB at $0.18 per $100 up to $121,700 for professional and technical work. On a CAD 70,000 salary they add about 10%; at this page's example of US$70,000 (about CAD 98,000) they add about 8.5%, because CPP, CPP2 and EI stop growing at their ceilings.

Does an EOR qualify for the Ontario Employer Health Tax exemption?

No. The $1,000,000 Ontario EHT exemption is restricted to eligible employers whose total Ontario payroll across associated entities is under $5,000,000. Because an EOR provider's total payroll across all client employees far exceeds this threshold, the top EHT rate of 1.95% applies from the first dollar of salary.

Is vacation pay an additional cost on top of annual salary in Canada?

No. Under the Ontario Employment Standards Act, employees are entitled to a minimum of 4% vacation pay (equivalent to 2 weeks). For full-time salaried employees, vacation is taken as paid time off included within their annual gross salary, so it does not represent an extra payroll cost.