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Employer Payroll Obligations in Canada

Canadian employers bear significant costs beyond the salary shown on an offer letter. Federal law requires employers to match employee CPP contributions dollar for dollar and pay EI premiums at 1.4 times the employee rate. For a worker earning $65,000 in 2026, employer CPP contributions total approximately $3,800 and employer EI costs around $1,600. Add statutory vacation pay (minimum 4% of gross earnings in most provinces), workers’ compensation premiums (WSIB, WorkSafeBC, CNESST, etc.), and typical health/dental benefits, and the true cost of an employee is typically 25–40% above base salary.

Payroll remittances must be submitted to the CRA according to a schedule determined by average monthly withholdings. Small employers (under $3,000 per month in source deductions) remit quarterly, regular remitters by the 15th of the following month, and large employers (over $25,000 in average monthly withholdings) must remit up to four times per month. Late remittances attract penalties of 3% for 1–3 days late, escalating to 10% for seven or more days, plus daily compound interest. T4 slips must be filed by the last day of February for the preceding calendar year.

Employer Cost Breakdown on a $65,000 Salary (2026)

Employers must also navigate provincial payroll taxes in Ontario (EHT), Quebec (HSF), British Columbia (EHT), Manitoba (HEL), and Newfoundland (HAPSET). These add 0.98–4.26% to payroll costs depending on the province and total payroll size. Accurate payroll management through dedicated software or a payroll service provider is essential — errors in source deductions or late filings can result in CRA audits, penalties, and director liability, where company directors become personally responsible for unremitted payroll taxes.