What payroll taxes do employers pay in Canada?

Canadian employers pay CPP contributions (matching employee rate of 5.95%), EI premiums (1.4× employee rate), and may pay provincial payroll taxes like Quebec QPIP, and Ontario/Manitoba/Quebec employer health taxes.

How much does it cost to employ someone in Canada?

Employer costs add approximately 7-15% on top of salary depending on province. This includes CPP match (~5.95%), EI premium (~4.1%), and possible provincial health taxes (0.98-4.26%).

What is the CPP contribution rate for 2025?

For 2025, the CPP contribution rate is 5.95% for both employees and employers on earnings between the basic exemption ($3,500) and YMPE ($71,300), plus an enhanced 4% on earnings up to YAMPE ($81,200).

Payroll Tax Calculator Canada 2026 | Employer Costs Guide

Employer Payroll Costs Summary

Contribution	Employer Rate	2025 Maximum
CPP	5.95%	~$4,034
CPP2 (enhanced)	4%	~$396
EI	~4.1%	~$1,335
Provincial Health Tax	0-4.26%	Varies
QPIP (Quebec)	0.692%	~$500

CPP Contributions

2025 CPP Rates

Component	Rate	Maximum
Basic exemption	-	$3,500
YMPE	-	$71,300
CPP rate (employer)	5.95%	$4,034.10
YAMPE	-	$81,200
CPP2 rate (employer)	4%	$396

CPP Calculation

Step	Formula
CPP earnings	Salary - $3,500 (to YMPE)
CPP contribution	Earnings × 5.95%
CPP2 earnings	Earnings between YMPE and YAMPE
CPP2 contribution	CPP2 earnings × 4%

Example ($75,000 Salary)

Item	Amount
CPP earnings	$71,300 - $3,500 = $67,800
CPP contribution	$67,800 × 5.95% = $4,034
CPP2 earnings	$75,000 - $71,300 = $3,700
CPP2 contribution	$3,700 × 4% = $148
Total CPP (employer)	$4,182

EI Premiums

2025 EI Rates

Item	Value
Employee rate	1.64% (outside Quebec)
Employer rate	Employee × 1.4 = 2.30%
Maximum insurable earnings	$65,700
Max employee premium	$1,077.48
Max employer premium	$1,508.47

Quebec EI Rates

Item	Value
Employee rate	1.31%
Employer rate	1.31% × 1.4 = 1.83%

Example ($75,000 Salary)

Item	Amount
Insurable earnings	$65,700 (capped)
Employer premium	$65,700 × 2.30% = $1,508

Quebec-Specific Deductions

QPIP (Quebec Parental Insurance)

Party	Rate	Maximum Earnings
Employee	0.494%	$98,000
Employer	0.692%	$98,000

Example

Item	Amount
QPIP earnings	$75,000
Employer QPIP	$75,000 × 0.692% = $519

Provincial Health Taxes

Ontario Employer Health Tax (EHT)

Payroll Size	Rate
$0 - $490,000	0.98% (exemption for small)
$490,001 - $980,000	1.101% - 1.829%
Over $980,000	1.95%

Employers remit payroll taxes — CPP, EI, and income tax withholdings — to the CRA on a schedule based on total annual remittances. Eligible employers with <$5M payroll get exemption on first $490K.

Quebec Health Services Fund (HSF)

Payroll Size	Rate
$0 - $1M	1.25% - 4.26%
$1M - $7M	Graduated
Over $7M	Up to 4.26%

Manitoba Health and Education Levy

Payroll Size	Rate
$0 - $2.25M	Exempt
$2.25M - $4.5M	4.3% on excess
Over $4.5M	2.15%

BC Employer Health Tax

Payroll Size	Rate
$0 - $500,000	Exempt
$500,001 - $1.5M	2.925% on excess
Over $1.5M	1.95%

Total Employer Cost Calculator

Example: $75,000 Employee (Ontario)

Item	Amount
Salary	$75,000.00
CPP (employer)	$4,034.10
CPP2 (employer)	$148.00
EI (employer)	$1,508.47
EHT (if applicable)	$735.00
Total Employer Cost	$81,425.57
Overhead %	8.6%

Example: $75,000 Employee (Quebec)

Item	Amount
Salary	$75,000.00
QPP (employer)	$4,034.10
QPP2 (employer)	$148.00
EI (employer)	$1,208.00
QPIP (employer)	$519.00
HSF	$937.50
Total Employer Cost	$81,846.60
Overhead %	9.1%

Employer Cost by Salary

Ontario (Small Employer)

Salary	CPP+CPP2	EI	Total Overhead	%
$50,000	$2,764	$1,150	$3,914	7.8%
$75,000	$4,182	$1,508	$5,690	7.6%
$100,000	$4,430	$1,508	$5,938	5.9%
$150,000	$4,430	$1,508	$5,938	4.0%

Excludes EHT for small employers.

With EHT (Larger Employer)

Salary	CPP+CPP2	EI	EHT	Total	%
$50,000	$2,764	$1,150	$975	$4,889	9.8%
$75,000	$4,182	$1,508	$1,463	$7,153	9.5%
$100,000	$4,430	$1,508	$1,950	$7,888	7.9%

WSIB/WCB Premiums

Workers’ Compensation

Province	Rate Range
Ontario (WSIB)	$0.14 - $15+ per $100 payroll
BC (WorkSafeBC)	$0.15 - $10+ per $100
Alberta (WCB)	$0.15 - $8+ per $100

Rates vary by industry classification.

Example (Office Work)

Item	Rate
Typical office rate	$0.20 per $100
$75,000 salary	$150/year

Vacation Pay

Minimum Requirements

Province	Minimum	After Years
Ontario	4%	0-5 years
Ontario	6%	5+ years
BC	4%	0-5 years
BC	6%	5+ years
Alberta	4%	0-5 years
Alberta	6%	5+ years

Vacation Pay Cost

Salary	4% Vacation	6% Vacation
$50,000	$2,000	$3,000
$75,000	$3,000	$4,500
$100,000	$4,000	$6,000

True Cost of an Employee

All-In Cost Example ($75,000)

Item	Amount
Base salary	$75,000
CPP/QPP (employer)	$4,182
EI (employer)	$1,508
Provincial health tax	$735
WSIB/WCB	$150
Vacation pay (4%)	$3,000
Benefits (estimated)	$3,000
Total Cost	$87,575
Overhead	16.8%

Payroll Calendar

Key Dates

Date	Action
15th (monthly)	Remit payroll deductions
End of February	T4/T4A slips to employees
End of February	T4 Summary to CRA
Year-end	True-up premiums

Remittance Frequency

Employer Type	Frequency
Small (<$25K remittances)	Quarterly
Regular	Monthly
Large (>$50K)	Twice monthly
Very large	Weekly

Payroll Tax Calculator Canada 2026 | Employer Costs Guide

Employer Payroll Costs Summary

CPP Contributions

2025 CPP Rates

CPP Calculation

Example ($75,000 Salary)

EI Premiums

2025 EI Rates

Quebec EI Rates

Example ($75,000 Salary)

Quebec-Specific Deductions

QPIP (Quebec Parental Insurance)

Example

Provincial Health Taxes

Ontario Employer Health Tax (EHT)

Quebec Health Services Fund (HSF)

Manitoba Health and Education Levy

BC Employer Health Tax

Total Employer Cost Calculator

Example: $75,000 Employee (Ontario)

Example: $75,000 Employee (Quebec)

Employer Cost by Salary

Ontario (Small Employer)

With EHT (Larger Employer)

WSIB/WCB Premiums

Workers’ Compensation

Example (Office Work)

Vacation Pay

Minimum Requirements

Vacation Pay Cost

True Cost of an Employee

All-In Cost Example ($75,000)

Payroll Calendar

Key Dates

Remittance Frequency

Related Resources