Business Owner FAQ – Employee Benefits in Canada

What employee benefits are required by law in Canada?

There are only three Federally mandated benefits that must be arranged for all employees in Canada:

Visit the above links for official government information and instructions on how to set up each of these programs.

What are the major types of employee benefits in Canada?

Beyond the mandated benefits mentioned above, there are a number of benefits an employer may choose to offer in order to reward key employees or recruit new hires:

  • Group Insurance
  • Group Retirement Savings (employer matches contributions to an RRSP or DPSP)
  • Health Spending Account or Wellness Account
  • Vacation time
  • Continuing Education
  • Work from home allowances
  • Paid meals
  • Vehicle allowances

Do part time employees get group insurance benefits?

Many employers are concerned about benefits for part time employees, particularly in industries with high turnover or seasonality. As a rule of thumb, insurance companies mandate that employees must work a minimum of twenty hours per week to be eligible for benefits.

From the employer perspective, that leaves a large gap between the forty hours a week that would traditionally be considered full time employment. This requires a policy created at the business level to help ensure fairness for all employees while being mindful that a benefits plan should reward people in return for commitment and contribution to the company. Part time employees churning off the benefits plan is a cost that is easy to avoid with a bit of planning. 

Most typically we see the following: 

  • A mandatory waiting period added to the benefits plan: In this case, employees must work for a minimum period before they are eligible to join the plan. Most typically the period is 3-6 months. This helps ensure that those using the plan are invested in the company for the long term and you will not have short term employees negatively affecting your usage rates to drive up the cost at renewal.
  • A division of employees by some definable rank: Much like longer tenured employees will receive a salary increase, you are able to create “classes” of employee benefits to ensure your best people receive a package in line with their contribution to your company.  This can be completely unique to your business, but the two most typical class splits are:

Hourly vs. Salaried employees

Management vs. Other employees

Between these two policies you should be able to mitigate most of the risk that part time employees may cause a benefits plan. 

How much do group insurance benefits cost an employer in Canada?

An insured benefits package varies in cost between provinces and depends on the demographic of the group – the key price levers being number of employees, average age and the number of single versus family plans. 

As a rough rule of thumb you can expect an employee benefits package in Canada to cost in the range of 5% of your monthly payroll.

Next Benefits has built a system leveraging these quick data points to make it as simple as possible for a small business to create a hypothetical benefits package, customize through a few standard options and order a custom quote if necessary. 

Visit our Benefits IQ online quote tool to see the cost of an employee benefits package in Ontario, British Columbia, Alberta, Ontario or Manitoba. 

https://nextbenefitsinc.com/quote

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