True cost of employment in Canada.
Employer cost on top of salary
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CPP (5.95%)
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CPP2 (4%)
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EI (1.4× ee)
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The salary is never the real cost
When a business offers someone $80,000, that figure is not what the hire actually costs. On top of every salary, Canadian employers must pay their own mandatory payroll contributions to CPP and EI. The employer matches the employee’s CPP base contribution at 5.95 percent and the CPP2 contribution at 4 percent dollar for dollar. EI is not matched evenly: employers pay 1.4 times the employee’s rate, so where the worker pays 1.64 percent, the company pays 2.296 percent on insurable earnings up to the $64,500 ceiling. This calculator adds those three statutory costs to the salary so you can see the true cost of employment before any benefits or overhead.
Budgeting an $80,000 hire for 2026
Take an $80,000 salary. CPP costs the employer 5.95 percent of pensionable earnings, the salary minus the $3,500 exemption, capped at $71,300, which is $4,034. CPP2 applies at 4 percent to the band between $71,300 and the $80,000 salary, since that is below the second ceiling of $81,200, adding $348. EI is 1.64 percent times 1.4 on the $64,500 insurable cap, which is $1,481. Together the employer owes $5,863 on top of the wage.
| Employer contribution | Base | Rate | Cost |
|---|
The bar below puts the base salary against the loaded cost, with the statutory add-on stacked on top so you can see the wedge the employer absorbs.
The costs this tool does not yet count
CPP and EI are only the federal floor. Several provincial levies stack on top and can add another 2 to 7 percent depending on where you operate. Ontario charges an Employer Health Tax that kicks in above a payroll exemption, with a top rate of 1.95 percent, and British Columbia runs a similar Employer Health Tax above its own threshold. Almost every province also requires workers' compensation coverage, WSIB in Ontario, whose premium varies sharply by industry, from a fraction of a percent for office work to several percent for construction. Add vacation pay accruals, statutory holidays, and any benefits or pension match, and the all-in cost of an $80,000 employee can comfortably reach the low $90,000s.
Who needs this and a Quebec caveat
This is for small-business owners pricing a new role, founders modelling burn rate, and anyone comparing the cost of an employee against an independent contractor. That last comparison is where the tool earns its keep: a contractor invoices a flat rate and the payer owes no CPP, EI, or health levy, which is exactly why misclassifying a real employee as a contractor draws CRA scrutiny and back-assessments. If the CRA recharacterizes a contractor as an employee, the employer can be assessed for the unremitted CPP and EI, including the worker’s share, plus penalties and interest, so the apparent saving can reverse sharply. One important caveat for Quebec employers, the numbers shift. Quebec uses the Quebec Pension Plan at a higher rate, a different provincial EI rate, the Quebec Parental Insurance Plan, and contributions to provincial funds like the health services fund, so a Quebec payroll should be modelled separately through Revenu Quebec rather than read off this estimate.
A practical budgeting habit is to add a loading percentage to every salary you plan, rather than costing roles at the bare wage. Even before benefits, the statutory CPP and EI alone add several percent, and once a provincial health tax, workers' compensation, and vacation accrual are layered in, a useful planning rule is to assume the fully loaded cost runs roughly 10 to 20 percent above the salary, higher in hazardous industries. Pricing your services or your hiring plan off the loaded number, not the wage, keeps margins honest.
Why does the employer pay more EI than the employee?
By statute the employer EI rate is set at 1.4 times the employee rate. The policy logic is that employers, who control hiring and layoffs, should carry a larger share of the insurance that funds benefits when those layoffs happen. So on the same insurable earnings the company pays 2.296 percent against the worker’s 1.64 percent.
Can a small employer get any EI relief?
Yes. Smaller employers whose total EI premiums fall under an annual threshold can qualify for the Small Business Job Credit or the current premium reduction for employers offering qualifying short-term disability plans, which lowers the 1.4 multiplier. The relief is modest and rule-bound, so check your eligibility with the CRA, but it is real money for a tight payroll.