All About Offering Employee Benefits in Canada
Hire and attract the best talent in Canada with the information you need to offer a competitive benefits package and stay compliant.
Required Benefits in Canada
If you want to hire in Canada but don’t know which benefits to offer, here’s an overview of required and additional benefits. For a more nuanced understanding, Justworks EOR can help you access competitive, localized employee benefits to hire more successfully while avoiding compliance headaches.
Pension Plan Contributions
Employers and employees contribute to an employee’s Canadian Pension Plan (CPP) which covers workers across Canada, except Quebec. The CPP is a social insurance program that provides retirement savings or basic income to the contributor or their family members in the event of disability or death. Employers deduct equivalent CPP contributions from an employee’s paycheck until the maximum amount of contributions is hit for the year.
Employment Insurance Contributions
Employment insurance (EI) contributions are mandatory deductions from an eligible employee’s earnings. The EI is a federal program that offers temporary financial relief to Canadians during periods of unemployment, illness, or caregiving responsibilities until they can find work or new sources of income. Both employees and employers must contribute to EI. Employees’ EI contributions are deducted from their paychecks. Employers must contribute 1.4 times the amount deducted from employees, and then remit the total.
Medicare
Canada's Medicare system is publicly funded, meaning healthcare is paid for through federal and provincial taxes. This program is a statutory benefit that ensures all Canadians can access essential medical services regardless of income. While national standards are set by the federal government, provinces and territories handle the administration of healthcare services, leading to some regional variation. All residents receive a Medicare card for free healthcare in their province.
Time Off
Paid time off requirements vary by province or territory. Generally, the federal minimum allows employees to get at least two weeks of paid vacation time after one year of employment, three weeks after five years, and four weeks after ten years. Aside from paid vacation, protected leave also includes statutory holidays, medical leave, maternity and parental paternity leave, and other forms of personal leave.
Offer Competitive Benefits in Canada
Improve your chances of hiring and retaining star talent with additional employee benefits. Generally, Canadian employees value PTO, comprehensive healthcare, financial planning, and flexible working arrangements.
Employer-Sponsored Health Benefits
Offering additional healthcare options can give you a more competitive edge when hiring. Canadian Medicare plans usually don't cover dental, vision, or paramedical services like massage therapy or chiropractic care. You may want to include them as a part of an opt-in plan, in addition to greater coverage that includes prescriptions, short-term disability, long-term disability, and critical illness care.
Spending Accounts
Flexible spending accounts (FSAs), like Health Spending Accounts (HSAs) and Lifestyle Spending Accounts (LSAs), offer employees savings on healthcare and wellness expenses. HSAs cover medical or dental costs not included in insurance plans with unused funds rolling over. LSAs or Wellness Spending Accounts reimburse additional expenses not typically covered like gym memberships and counseling.
Employee Assistance Programs
Employment assistance programs (EAPs) are designed to support employee well-being with free, 24/7 confidential services for personal or work-related issues. Employers can choose how much to fund these programs and what services should be offered.
Wellness Programs
In Canada, employers commonly offer wellness programs to support employees’ physical and mental health to enhance productivity and reduce healthcare costs. This can include guidance on stress reduction, weight loss, and dietary/nutrition education.
Life Insurance
While not required, employers typically include life insurance. Employers usually opt for a group life insurance policy including term life insurance where coverage varies based on an employee’s salary. Employers often cover the premiums for basic insurance and can choose to allow employees to buy more coverage at employees’ expense.
Flexible/Unlimited PTO
PTO or vacation time can be quite flexible in Canada. For example, an employee may swap a nationally recognized PTO public holiday for a different day that suits their schedule better upon approval. Employers usually offer more PTO after a few years of service. Some employers offer unlimited PTO allowing employees more flexibility to take as much time off as needed, within reason.
Fringe Benefits
Employers often offer extra benefits, known as "perks" or "fringe benefits," in addition to regular pay. These perks enhance the overall compensation package and help attract, retain, and motivate employees. They commonly include transportation benefits, employee discounts, stock options, meal stipends, and professional development opportunities.
Ready to Offer Benefits in Canada?
Justworks EOR makes building your global team seamless by helping you get access to benefits that can help you attract top talent in Canada. Save yourself the time and hassle of international hiring today.
