How do Canadian and American payroll taxes compare?

US & CA Tax

The structure of Canadian payroll taxes is similar to US payroll taxes in categories and costs. Canadian payroll taxes include a 4.95% pension contribution similar to social security (known as CPP in Canada), a 2.282% unemployment insurance premium (known as EI in Canada), a 0.20-0.80% workers compensation insurance premium (varies by province) and a universal healthcare tax (similar to Medicare) to subsidize Canada’s universal healthcare system.

This typically adds 9-10% to the worker’s salary, not including the mandatory statutory holiday pay and vacation time that must be given to employee status workers

Leave A Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

  • Suite 306, 73 Simcoe Street Toronto, Ontario M5J 1W9 Canada
  • 1-866-382-7244