The Canada Pension Plan (or Québec Pension Plan) that is described under both Employer Contributions and Employee Contributions contributions is a mandatory social security benefit that employers and employees must contribute towards.
Employers and employees must contribute 5.45% of the employee’s taxable salary towards the benefit, capped at CAD$3,166.45 yearly. In Quebec, the contribution rate is 5.9%, capped at CAD$3,427.90.
Employment Insurance (EI) is part of the Canadian social security program that employers and employees must contribute towards. Employers contribute 2.212% of the employee’s taxable salary, capped at CAD$1,245.36. Employees contribute 1.58%, capped at CAD$889.54.
In Quebec, the employer’s contribution rate is 1.652%, capped at CAD$930.08 annually, and the employee’s contribution is 1.18%, capped at CAD$664.34 annually.
The EI contributions fund the unemployment benefits and employees’ leaves related to illness, maternity, paternity and parental leave, and compassionate care leave. The benefits pay is 55% of the employee’s average insurable weekly earnings, capped at CAD$595 weekly.
Depending on the reason for the benefit, the employee’s entitlement ranges from 14 to 45 weeks.
Most provinces/territories require companies in certain industries to register with the provincial/territorial workers’ compensation insurance.
The insurance protects businesses from workers’ lawsuits, no-fault insurance, lost earnings, health care related to injuries at work, and supports return to work. The requirements and premiums related to the insurance depend on the company’s industry and the work environment.
Several industries are exempt from the mandatory workers’ compensation insurance. In Ontario, for example, engineers, private health care practices such as doctors and chiropractors, private daycares, travel agencies, photographers, and taxidermists are exempt. However, it’s important to remember that industries that are exempt in one province/territory may not be exempt in another and vice versa.
Non-mandatory benefits, as the name suggests, are offered by employers at their discretion. However, if the company decides to offer a benefit, they must ensure they comply with the rules against discrimination when extending the benefits and the benefit contribution to employees, their dependents, beneficiaries, or survivors. The grounds for that include but are not limited to age, sex, religion, or marital status of the employee.
Benefits can, however, vary among employees without being discriminatory if they are based on tenure, occupation, management level, and hours worked.
Some benefits trigger benefit-in-kind taxation for employees, as the Canadian Revenue Agency considers them part of the employee’s income. The following are taxable benefits:
Canada has high-quality free, public health care available for all residents. But it is common for companies to provide employees and their families with extended health care as a supplement. That often covers more affordable prescription drugs, hospital, paramedical practitioners, coverage abroad, dental care, and eye exams. Many employers elect to pay 100% of the benefit’s premium; alternatively, there is often a co-pay arrangement between the employer and employee.
The supplementary pension is a common benefit in Canada, where employers often contribute at least 50% of the pension premium. It can take various forms such as group Registered Retirement Savings Plan (RRSP), Canadian Savings Bonds, or Pension Plan.
The most common retirement benefit is the RRSP, where employers match the employees’ contributions (usually capped at 3% of the base salary).
Some employers give above the statutory minimum days off to their employees annually, often three to four weeks of paid vacation. Some go further by also giving up to an additional week of paid sick leave or personal emergency leave.
Some companies give employees above statutory maternity and parental leaves, where they top up the government paid leave to 75%–100% for three to four months.
Some employers also provide employees with a breastfeeding or pumping room for privacy.
Employers often have different approaches to what’s included in wellness benefits, but these benefits tend to involve a gym membership either on-site for bigger companies or subsidised/discounted for smaller employers.
Another approach is to offer more flexibility to employees by creating allowances that are 100% funded by employers and that are allocated to wellness outside gym memberships and can range from yoga, Pilates, and digital and mental wellness to other classes and sports. This is known in Canada as health care spending, and the Canada Revenue Agency (CRA) dictates which expenses are eligible for the program.
Some companies provide employees with health coaching and health risk assessments. Programs vary and can help those suffering from a high cholesterol level, back and neck pain, stress, depression, diabetes, and musculoskeletal conditions.
Employers often provide employees with online employee assistance programmes (EAP) and virtual care. The virtual care is a 24/7 health tool, using which employees can access and talk to a doctor, nutritionist, naturopath, and mental health specialist.
Some employers provide employees with learning and career opportunities that range from trainings and workshops to paid educational programs.
More and more employers in Canada are offering various flexible workplace arrangements to their employees. Flexibility often involves workplace flexibility (the option of full-time working from home or a hybrid arrangement) and/or flexible work hours (with mandatory core hours as part of reduced or compressed workweeks).
Some employers cover employee transportation costs to and from work — often in the form of paid travel passes for the public transportation, a transportation allowance, or even a company car for high-level employees.
There are various insurance levels that employers choose to give employees in Canada. From short-term to long-term disability insurance to disability and death insurance. Many employers provide group plans at discounted rates for employees, which are often paid by employees and not employers.
Companies often give employees annual incentives in the form of cash bonuses in Canada, some as high as 100% bonus pays, depending on the performance and role. There are no restrictions or guidelines on the type or size of bonuses that can be awarded to employees, but they trigger additional taxes for employees.
Another alternative popular with tech start-ups is Employee Stock Option Plans, especially for the executive level employees.