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Employer Cost Calculator

2025
Employee Details
$
Cost Summary

Total Employer Cost

$84,828.36

Base Salary

$75,000.00

Overhead

13.10%

above base salary

Cost Breakdown
Base Salary$75,000.00
CPP/QPP Employer Contribution$4,246.45
EI Employer Premium (1.4x employee)$1,572.30
WCB (est. 1.5%)$1,125.00
Vacation Pay (2 weeks)$2,884.62
Total Employer Cost$84,828.36
Monthly Cost$7,069.03
Cost Per Hour (2,080 hrs)$40.78
Cost by Province
Ontario$84,828.36
Quebec$88,333.40
British Columbia$84,828.36
Alberta$84,828.36
Saskatchewan$84,828.36
Manitoba$86,478.36
Nova Scotia$84,828.36
New Brunswick$84,828.36
Prince Edward Island$84,828.36
Newfoundland & Labrador$84,828.36
Yukon$84,828.36
Northwest Territories$84,828.36
Nunavut$84,828.36
More Information
Frequently Asked Questions
Canadian employers must contribute to CPP (or QPP in Quebec), Employment Insurance (EI), and workers' compensation (WCB/WSIB). For CPP, employers match the employee contribution at 5.95% of pensionable earnings above $3,500, up to the maximum. For EI, employers pay 1.4 times the employee premium rate. Quebec employers also pay QPIP (Quebec Parental Insurance Plan). Some provinces have additional payroll taxes such as Ontario's Employer Health Tax.
The employer EI premium is 1.4 times the employee rate. For 2025, the employee rate is 1.64% of insurable earnings up to $65,700, making the employee maximum $1,077.48. The employer maximum is therefore $1,508.47 (1.4 x $1,077.48). In Quebec, the EI rate is reduced to 1.312% because QPIP covers parental benefits. Employers can apply for a reduced EI rate if they offer a qualifying short-term disability plan.
Ontario: Employer Health Tax (EHT) at up to 1.95% on payroll above $1 million exemption. Manitoba: Health and Education Levy at 2.20% on total payroll above $2.25 million. Quebec: Health Services Fund (HSF) at ~4.13% of payroll (rate varies by sector and payroll size). Newfoundland & Labrador: Health and Post-Secondary Education Tax at 2% on payroll above $2 million. British Columbia and other provinces do not have additional employer payroll taxes.
Workers' Compensation Board (WCB/WSIB) premiums vary dramatically by industry classification and the employer's claims history. Rates can range from under 0.50% for low-risk office work to over 10% for high-risk industries like mining, forestry, or construction. The average rate across all industries is approximately 1.5%. Each province has its own WCB system with different rate structures. This calculator uses a 1.5% estimate; contact your provincial WCB for your specific rate.
Federal and most provincial employment standards require a minimum of 2 weeks (4%) vacation pay after one year of employment. Saskatchewan provides 3 weeks after one year. After longer periods of service, some provinces mandate additional vacation: 3 weeks after 5-10 years in many provinces. Vacation pay is calculated as a percentage of gross earnings (4% for 2 weeks, 6% for 3 weeks). Employers may offer more generous vacation than the statutory minimum.
Quebec employers face unique obligations compared to the rest of Canada. Instead of CPP, they contribute to the Quebec Pension Plan (QPP) at a slightly higher rate (6.4% vs 5.95%). They pay QPIP (Quebec Parental Insurance Plan) at 0.692% of insurable earnings. The EI rate is reduced since QPIP covers parental benefits. Quebec also charges the Health Services Fund (HSF) at approximately 4.13%, and has its own workers' compensation system (CNESST). Total employer costs in Quebec tend to be among the highest in Canada.
Total employer cost = Base Salary + CPP/QPP employer contribution + EI employer premium + QPIP (if Quebec) + WCB premium + Provincial payroll tax (if applicable) + Vacation pay + Any benefits (dental, health, pension). Mandatory statutory contributions typically add 12-20% above the base salary, depending on the province and salary level. The overhead percentage decreases at higher salaries because CPP and EI have maximum contribution limits.

CRA-Aligned: Uses 2025 CPP, EI, and provincial contribution rates. WCB is estimated at 1.5% average; actual rates vary by industry and province. Consult your provincial WCB and a payroll professional for exact figures.

Understanding Employer Costs in Canada

The true cost of hiring an employee beyond their gross salary

What does an employee really cost beyond their salary?

An employee earning $60,000 in salary typically costs the employer around $68,000 to $75,000 in total. On top of the gross salary, employers must pay their share of CPP (about $3,568), EI (about $2,508 at 1.4x the employee rate), Workers Compensation premiums, vacation pay, and often benefits like health and dental insurance.

How much is the employer CPP contribution?

Employers must match the employee CPP contribution dollar for dollar. For 2025, the employer pays 5.95% of the employee's pensionable earnings between $3,500 and $71,300, plus 4% on earnings between $71,300 and $81,200 (CPP2). The maximum employer CPP/CPP2 contribution is about $4,430 per employee per year.

How is the employer EI premium calculated?

Employers pay 1.4 times the employee EI premium rate. For 2025, the employee rate is 1.64%, so the employer rate is 2.296%. On maximum insurable earnings of $65,700, the employer pays up to $1,508 per employee per year. This is one of the largest mandatory payroll costs after CPP.

What is Workers Compensation insurance?

Workers Compensation (WCB/WSIB) protects employees who are injured on the job. Employers pay premiums based on their industry classification and payroll size. Rates vary hugely — from under $1 per $100 of payroll for office workers to over $10 per $100 for high-risk industries like construction or mining. Employers in most provinces are required to carry this coverage.

What about vacation pay?

By law, employers must provide a minimum of two weeks paid vacation per year (4% of earnings), increasing to three weeks (6%) after five or six years in most provinces. On a $60,000 salary, that is $2,400 to $3,600 in vacation pay. Some provinces require more — Saskatchewan requires three weeks from the start, and some require four weeks after longer service.

Are employee benefits tax-deductible for the employer?

Yes. Most employer-paid benefits are deductible business expenses, including CPP, EI, Workers Compensation, group health and dental insurance, group life insurance, and contributions to a registered pension plan. These deductions reduce the corporation's taxable income. However, the employer must remit payroll deductions to the CRA by the required due dates to avoid penalties.

What payroll taxes apply in Quebec?

Quebec employers face additional costs. Instead of federal EI for parental benefits, they pay into the Quebec Parental Insurance Plan (QPIP). They also pay QPP instead of CPP at a slightly higher rate, plus a Health Services Fund contribution (1.65% to 4.26% depending on payroll size) and a contribution to workforce training (1% of payroll if over $2 million).

CRA-Aligned: Based on 2025 CRA rates and thresholds. For personal advice, speak to a qualified accountant or tax professional.

Disclaimer: This calculator provides estimates based on current CRA rates and thresholds for the 2025 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant before making financial decisions. Read our terms

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