Disclaimer Statutory rates use 2026 estimates and vary by province/state, industry, and payroll size. Verify current rates with the CRA, your provincial EHT rules, and your WSIB/WCB classification. Not payroll, tax, or legal advice.
Budgeting a hire at the advertised salary is the most common — and most expensive — payroll mistake small businesses make. The statutory contributions alone add a five-figure sum to most professional salaries, before benefits, equipment, or a desk. This calculator itemizes every layer so the number you budget is the number the hire actually costs.
The true cost of an employee is the gross salary plus every mandatory employer contribution, plus benefits, plus the overhead of giving that person a desk, tools, and administration. Across Canada, a fully-burdened employee typically costs 1.2× to 1.4× base salary — and the rule of thumb rises toward 1.5× once rich benefits or high workers' compensation classes are involved. This calculator itemizes each component so you can quote projects, price services, and compare hiring against contractors or automation with real numbers.
For a Canadian employer in 2026, the mandatory burden on top of salary includes: CPP — the employer matches 5.95% of pensionable earnings between the $3,500 exemption and the first earnings ceiling (~$71,300), plus 4% CPP2 on earnings up to the second ceiling (~$81,200), a maximum employer cost of roughly $4,430; EI — the employer pays 1.4× the employee premium of 1.64% on insurable earnings up to ~$65,700, about $1,509 maximum; vacation pay — a statutory minimum of 4% (rising to 6% after five years of service in several provinces); employer health taxes — Ontario EHT at 1.95% (with an exemption for smaller private employers), BC EHT up to 1.95%, and Quebec's Health Services Fund up to 4.26%; and workers' compensation — WSIB/WCB premiums that range from about 0.2% for office work to 8%+ for high-risk construction classes.
Take a CA$70,000 salary in Ontario office work: employer CPP ≈ CA$3,956, EI ≈ CA$1,509, vacation pay at 4% = CA$2,800, EHT at 1.95% = CA$1,365, WSIB at 1.5% = CA$1,050 — about CA$10,680 of statutory burden (15.3% of salary). Add CA$4,800 in benefits and CA$3,600 in overhead and the true annual cost is roughly CA$89,100, or about CA$47/hour over 1,880 productive hours — a 1.27× burden multiplier before any bonus.
Dividing by 2,080 nominal hours understates hourly cost. After 10 statutory holidays, 2–4 weeks of vacation, and average sick time, most full-time employees deliver 1,800–1,900 productive hours. Using productive hours is what makes the hourly figure safe to plug into pricing, break-even analysis, and staffing models.
The burdened hourly figure is the floor under every pricing decision. Professional service firms typically bill 2.5×–3× burdened hourly cost to cover non-billable time, management, and profit — an employee costing CA$47/hour needs to bill around CA$120–CA$140/hour before the firm earns a healthy margin. The same figure decides make-versus-buy questions: a task consuming 10 hours a week of a burdened CA$45/hour employee costs about CA$23,400 a year, which is the honest benchmark to compare against software, outsourcing, or AI automation quotes. Finally, remember the first-year additions this calculator holds constant: recruiting fees (often 15–25% of salary through an agency), onboarding drag of one to three months at reduced productivity, and equipment. Loading those in, a first-year hire commonly costs 1.4×–1.6× salary even when the steady-state multiplier is 1.25×–1.3×.
Rates in this tool are national estimates; your exact burden depends on province/state, industry classification, payroll size, and benefit design. Talk to a payroll provider or accountant before budgeting a hire above six figures, when operating in multiple jurisdictions, or when misclassification risk (employee vs. contractor) is in play — reclassification assessments routinely include back premiums and penalties. Comparing a hire against process automation instead? See our customer acquisition cost calculator, browse our legal and business wizards, or talk to LexScale.ai about AI intake that replaces repetitive staff work.
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