How it's calculated
An employee costs more than their salary. Every Canadian employer pays its own share of three federal contributions on each pay:Canada Revenue Agency
| Contribution (2026) | Employer pays | Employer maximum per employee |
|---|---|---|
| CPP | matches the employee: 5.95% | $4,230.45 |
| CPP2 | matches the employee: 4% | $416.00 |
| EI | 1.4 × the employee premium | $1,572.30 |
In Quebec, QPP at 6.3% (up to $4,479.30) replaces CPP, EI is lower (employer maximum $1,253.98), and the employer also pays QPIP at 0.602% (up to $620.06).
Five provinces add an employer health or payroll tax, and Quebec has two more employer charges. Most are worked out on the employer's total payroll in the province, so enter that as well as the salary:
| Province | 2026 rule |
|---|---|
| Ontario EHT | 0.98% to 1.95%, the rate set by payroll before the exemption; eligible employers deduct $1,000,000, which needs payroll under $5,000,000 (or a registered charity) |
| B.C. EHT | none up to $1,000,000; 5.85% of the amount above it up to $1,500,000; then 1.95% of all payroll |
| Manitoba HE Levy | none up to $2,500,000; 4.3% of the amount above it up to $5,000,000; then 2.15% of all payroll |
| Newfoundland and Labrador HAPSET | 2% of payroll above $2,000,000 |
| Quebec Health Services Fund | 1.65% of all wages for payrolls of $1,000,000 or less (1.25% in the primary and manufacturing sectors), rising on a sliding scale to 4.26% from $7,800,000 |
| Quebec labour standards contribution | 0.06% of each employee's pay, up to $103,000 per employee |
| Quebec training 1% rule (WSDRF) | payrolls over $2,000,000 must spend 1% of total payroll on eligible training or pay the shortfall to the Workforce Skills Development and Recognition Fund |
Sources: Ontario Ministry of Finance,Ontario Ministry of Finance Government of B.C.,Government of British Columbia Manitoba Finance,Manitoba Finance Newfoundland and Labrador Department of FinanceGovernment of Newfoundland and Labrador and Revenu Québec.Revenu QuébecRevenu QuébecRevenu Québec
The Northwest Territories and Nunavut charge a 2% payroll tax too, but the employee pays it and the employer only withholds it, so it is not an employer cost and is not added here. Alberta, Saskatchewan, New Brunswick, Nova Scotia, Prince Edward Island and Yukon have no provincial employer tax in this calculator.
The formula
- Employer CPP (or QPP) and CPP2 (or QPP2) = the employee's amounts, worked out per pay and capped at the yearly maximum.
- Employer EI = 1.4 × the employee's EI premium on each pay, capped at the employer maximum.
- Provincial tax on the whole payroll = the province's rule above, applied to total payroll (never less than this salary).
- This employee's share = provincial tax on the whole payroll × salary ÷ total payroll. The Quebec training 1% rule is shared the same way.
- Quebec labour standards contribution = 0.06% × this salary, up to $103,000. It is worked out per employee, so no sharing is needed.
- Workers' compensation = your rate per $100 × salary (up to the maximum assessable earnings you enter) ÷ 100.
- Total cost = salary + employer CPP/QPP + CPP2/QPP2 + EI + QPIP + provincial tax share + workers' compensation + other costs.
Why a pro-rata share? The provincial taxes are charged on the employer's payroll as a whole, not per person, so there is no official per-employee figure. Spreading the tax in proportion to salary gives each employee the employer's average rate, and the shares add up to exactly the tax the employer pays. The notes under the result also show the marginal figure: how much the tax changes when this salary is added to the rest of the payroll. That can be much higher near a threshold (for example, the first dollar above B.C.'s exemption starts the 5.85% notch rate), which matters when you are deciding whether to hire.
Worked example
| Line | Year | Month |
|---|---|---|
| Gross salary | $60,000.00 | $5,000.00 |
| Employer CPP | $3,361.80 | $280.15 |
| Employer CPP2 | $0.00 | $0.00 |
| Employer EI | $1,369.42 | $114.12 |
| Ontario Employer Health Tax (share) | $270.00 | $22.50 |
| Total cost | $65,001.22 | $5,416.77 |
The employer pays Ontario EHT of 1.95% × ($1,300,000 − $1,000,000) = $5,850 on its whole payroll, as in Ontario's own example. This employee's share is $5,850 × 60,000 ÷ 1,300,000 = $270.00. With a payroll of $1 million or less the same employee would cost $64,731, because the exemption covers the whole payroll.
In Quebec, the same salary costs $66,039 with a $1 million payroll: QPP, the Quebec EI rate, QPIP, the Health Services Fund at 1.65% of the salary and the labour standards contribution at 0.06%. The training 1% rule does not apply, because the payroll is not over $2,000,000.
Assumptions and limitations
- One full year, one province, even pay. Employer CPP and EI are worked out per pay, as payroll does. Part-year operation (which reduces the exemptions in B.C. and Manitoba) is not modelled.
- No associated employers. Groups of associated corporations share one exemption in Ontario, B.C., Manitoba and Newfoundland and Labrador, and Quebec counts their wages together for the Health Services Fund rate. Enter the group's payroll, or in Ontario choose not to claim the exemption, to see the effect.
- Quebec Health Services Fund. Between $1 million and $7.8 million of payroll the rate follows Revenu Québec's 2026 sliding scale (for services and construction, 1.2662% + 0.3838% × payroll in millions) and is not rounded. The temporary 2026–2027 holiday for agriculture, forestry and fishing employers and the 4.26% rate for public-sector employers are not modelled.
- Quebec training 1% rule. The calculator counts the full 1% of payroll, because the employer pays it either as eligible training spending or as a contribution to the fund. Employers holding a training initiative quality certificate pay no contribution.
- Quebec labour standards contribution. Religious institutions, charities that assist people in need directly and free of charge, and federally regulated businesses (such as banks and airports) are exempt; the calculator still adds it. CNESST health and safety premiums are not included: enter your CNESST rate as workers' compensation.
- Not included: benefits, vacation pay beyond salary and pension plans, unless you enter them under other costs.
- Workers' compensation premiums depend on the province's board and your industry. Enter your own rate and, if your board caps assessable earnings, its 2026 maximum.