Canada Payroll Requirements
What is the Minimum Wage in Canada?
Effective April 1, 2025, the minimum wage is $17.75 CAD per hour for federally regulated workers in Canada.
Each province or territory provides its own complexities and challenges with staying current on minimum hourly wage rates. Along with the above federal guidance, there are additional considerations such as those for tipped employees, students, or those with job-specific rates.
See the minimum wage requirements for each Canadian province or territory on Canada.ca.
Pay Frequency
The laws surrounding the frequency of payments to employees in Canada varies depending on business type, salary vs hourly, and whether they are in the public or private sector.
However, like in the United States, Canadian companies typically pay their employees bi-weekly (26), semi-monthly or fortnightly (24), monthly (12), and weekly (52). When creating pay schedules in Canada, employers should consider funding of payroll accounts typically require a minimum of two business days prior to payment day to employees to ensure timely remittance of tax liabilities and employee net pay.
There are some provincial laws, such as in British Columbia, that require companies to pay their employees at least semi-monthly.
Overtime Laws
Overtime in Canada for federally regulated employees must be paid 1.5x their regular rate of pay for more than 8 hours worked in a day or for hours worked exceeding 40 hours in the established work week.
Requirements and regulations for overtime qualification vary widely from province to province. There are also several exemptions and nuances to be aware of including, but not limited to managerial and professional exemptions, a worker’s right to refuse overtime, and concepts such as averaging agreements or time-banking. Employers should be aware of the complex nature of overtime calculations and confirm with each provincial jurisdiction in which they hire employees.
Termination Policies
Under the Canada Labour Code, employers must provide either at least two weeks’ written notice to the employee or pay the employee wages in lieu of the notice period for any termination without cause. For employees with three (3) or more years of service, the notice period increases by one (1) week per year, up to a maximum of eight (8) weeks or payment in lieu of notice.
If the employee has 12 or more consecutive months of service, severance is required. The amount due to the employee must be paid within 7 days or no later than the next pay date.
Payroll Taxes
Employers must file payroll with the Canada Revenue Agency (CRA), Revenue Quebec (if applicable), as well as federal and provincial taxes. At the end of each year, employers must send reporting to the CRA including:
- T4 Slips (Statement of Remuneration)
- T4 Summary
- T4 Slips and Summary
- RL-1 Slips (Releve 1)
- RL-1 Summary
- RL-2 and RL-3 (if applicable)
Employers should check and update outstanding entries to payroll (manual and void/canceled checks), balance the T4/RL-1 report to the payroll register and validate the earnings and deductions, and validate social insurance numbers and pensionable earnings.
Other employer requirements include:
- Complete and submit summaries and reports to Revenue Quebec (RQ)
- CNESST Commission des norms, de l’equire, de la sante dt de la securite du travail
- Workers Safety and Compensation Board - Reporting and Filing
- Declaration des activites de formation (only for Quebec employers who pay WSDRF)
- File employer health tax returns, workers compensation/CSST annual return, RQ Annual summary reports
