Employing in Canada
The federal minimum wage in Canada is set at $17.75 per hour in 2025, however, this may be higher in different provinces or territories across the country. If this is the case, the higher minimum wage rate will apply.
If employees are not paid on an hourly basis and receive a salary instead, they must receive at least the equivalent of the minimum wage.
Tax rates for individuals also vary between provinces and territories, however this is calculated in the same way as federal income tax.
Federal income tax rates for 2025 are:
- 15% on the portion of taxable income that is $57,375 or less, plus
- 20.5% on the portion of taxable income over $57,375 up to $114,750, plus
- 26% on the portion of taxable income over $114,750 up to $117,882, plus
- 29% on the portion of taxable income over $177,882 up to $253, 414, plus
- 33% on the portion of taxable income over $253,414
Canada has a state pension system and a mandatory retirement savings plan (the ‘Canada Pension Plan’) for all working residents over the age of 18. The required contributions are split 50/50 between the employer and employee.
In addition, employers can choose to offer a ‘Registered Pension Plan’ to their employees, to which both the employer and employee make contributions.
In Canada, an employee’s standard hours of work are 8 hours (in a period of 24 consecutive hours) and 40 hours in a week.
Employees are entitled to one full day of rest each week, which usually falls on a Sunday. There are exemptions for certain classes of employee. For more information on working in Canada, please contact us.
Employees in Canada receive an annual vacation entitlement starting at 2 weeks of vacation per year, which increases with length of service with the same employer. Vacation pay is calculated as a percentage of an employee’s earnings, depending on how long the vacation is.
Canada has 10 days per year which are classed as general holidays. Employees are entitled to these days off with full pay.
There are several other types of paid and unpaid leave employees can receive including (but not limited to) leave for maternity related matters, parental, compassionate care, personal, court or jury duty, medical and bereavement.
Termination of employment in Canada is governed by the Canada Labour Code. Employers must provide notice to all employees; exact timeframes vary by province. Severance pay is not mandatory but is required in certain provinces.
Speak with one of our specialists to ensure you adhere to labour law.
