A Complete Guide to Work Benefits in Canada

Work benefits play a crucial role in supporting employees’ health, financial security, and work-life balance. While not all employers offer the same benefits, those with comprehensive packages are more likely to attract and retain talent while fostering a healthier, more satisfied workforce. 

Both employers and employees should understand workplace employee benefits to make informed decisions about compensation and policies. This complete guide explores the types of employee benefits in Canada, from mandatory and employer-sponsored benefits to voluntary options. Whether you’re an employer structuring an attractive benefits package or an employee looking to understand what you’re entitled to, this guide has you covered. 

What Are Employee Benefits? 

Company benefits are perks or compensations that organizations offer employees besides their base salaries. These job benefits enhance employee well-being, improve the work experience, and offer financial support, all of which employees consider when evaluating companies. 

Work benefits include mandatory company benefits Canada government requires and voluntary benefits businesses may offer as part of their compensation packages. Let’s explore what these Canada employee benefits include below.

Employment Insurance (EI)

Employment Insurance (EI) is a federally managed program that provides temporary financial assistance to individuals who are unemployed for various reasons. Both employers and employees contribute to the EI fund.

Who can access coverage under Employment Insurance?

EI benefits are available to individuals in the following situations:

• Parental leave
• Job loss through no fault of their own
• Compassionate care leave 
• Illness or injury 

To qualify, you must have worked a minimum number of hours, which varies by Economic Region. Check the required hours here. Service Canada administers the EI program, and recipients must continue to meet eligibility requirements while receiving benefits. 

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Canada Pension Plan (CPP)

The Canadian Pension Plan (CPP) provides retirement, disability, and survivor benefits to eligible contributors and their families. As a mandatory employee benefits Canada companies offer for most employees, contributions are shared equally between employers and employees. 

Eligibility for CPP Benefits

• You must be at least 60 years old to start receiving CPP Benefits.
• Benefits are paid at a reduced rate until you reach 65.

Employees and employers each contribute just under 6% of the employee's annual salary to CPP, up to a capped amount that changes annually. You can review the latest CPP contribution rates here. 

Workers Compensation Insurance

Workers' compensation insurance is not part of mandatory employee benefits in Canada, but certain industries are required to carry this coverage. Each province has its own workplace compensation board. In Ontario, the companies required to have workers’ compensation insurance are listed in the Workplace Safety and Insurance Act. 

Benefits of Workers' Compensation Insurance

• Medical coverage for injured employees
• Wage replacement during recovery 
• Rehabilitation services to support return to work 

Businesses required to carry workers’ compensation insurance but fail to register may face penalties, investigations, and legal charges. For industries where workers compensation insurance isn’t mandatory, they should consider Employment Insurance to fill the gap and protect their employees. 

Paid Vacation and Statutory Holidays

Employees in Canada are entitled to a minimum amount of vacation pay and statutory holidays, as determined by federal and provincial laws. As part of the mandatory employee benefits Ontario companies offer, employees receive both vacation time and vacation pay. 

Vacation Time vs. Vacation Pay

Though often used interchangeably, these terms refer to different concepts: Vacation Time is the amount of time off an employee is entitled to annually. Vacation pay refers to the compensation for the time they’ve taken off work. You can calculate the amount of vacation pay you’re entitled to using the Vacation Pay Calculator. 

Statutory Holidays in Canada (2025)

While statutory holidays vary by province, the following are recognized nationwide:

• New Year’s Day—Wednesday, January 1, 2025
• Good Friday— Friday, April 18, 2025
• Victoria Day—Monday, May 19, 2025
• Canada Day—Tuesday, July 1, 2025
• Civic Holiday—Monday, August 4, 2025 (excluding Quebec)
• Labour Day—Monday, September 1, 2025
• Thanksgiving Day—Monday, October 13, 2025
• Remembrance Day—Tuesday, November 11, 2025
• Christmas Day—Thursday, December 25, 2025
• Boxing Day—Friday, December 26, 2025

Most employers must provide time off with pay for statutory holidays. If you’re required to work on a statutory holiday, you’ll typically receive 1.5 times your regular pay (overtime pay). 

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Extended Health, Life and Disability Insurance

Health benefits provide coverage beyond provincial health care. This may include prescription, dental care, vision care, and even certain paramedical services like physiotherapy, chiropractic care and massage therapy, to name a few. Some employers may cover the extended health insurance in full or require employees to contribute through deductions in their payroll. 

Life and Disability insurance provides a certain level of security to employees and their families if there is a sudden case of illness, injury or death. There are three levels of coverage: 

• Life Insurance: A one-time lump sum payment is made to the beneficiary should the employee pass away. The value of the policy is generally the one-year salary of the employee.
• Short-Term Disability Insurance: Temporary Income Replacement when an employee is unable to work due to a medical condition
  
  
• Long-Term Disability Insurance: Provides income replacement for an extended period when an employee is unable to return to work due to a disability 

It’s important to review the coverages provided, as some benefits packages only cover some, but not all, extended insurances. 

Registered Retirement Savings Plan (RRSP) 

Registered Retirement Savings Plans (RRSP) supplement the Canadian Pension Plan, helping employees build additional financial security for retirement. It also offers tax benefits for contributors. The Canada Revenue Agency regulates these plans, as funds are typically invested in mutual funds, bonds or stocks. 

Some employers may offer different retirement benefits, such as pensions or deferred profit-sharing plans. If you’re an employer, competitive retirement benefits can enhance employee retention, as job seekers often consider benefits packages when evaluating potential employers. Ensuring employees feel supported in their retirement planning can lead to greater job satisfaction and long-term loyalty.

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Wellness and Fitness Programs 

Employee benefits extend beyond basic health insurance or retirement savings. Wellness programs can now be included. Some employers may subsidize certain aspects of a wellness program or provide employees with healthcare spending accounts. The most common wellness employee benefits examples are: 

• Subsidized gym memberships
• Mental health coverage 
• On-site fitness classes 
• Healthy workplace initiatives 
• Health coaching 

Including these programs not only boosts employee satisfaction and promotes a healthy work-life balance, but also delivers measurable benefits. Businesses that implemented wellness programs saw a 72% reduction in healthcare costs and up to 19% decrease in absenteeism. 

Flexible Work Arrangements

Offering employees flexibility in their work arrangements empowers them to manage their schedules, leading to a better work-life balance. Studies show that over 30% of employees have left a job due to a lack of flexibility, while 80% say they would be more loyal to an employer that provides a flexible work environment. 

These flexible work arrangements can be:

• Remote work options
• Flexible hours 
• Compressed workweeks 

Giving employees the freedom to set their work environment and schedule reduces stress and boosts productivity, creating a more engaged and satisfied workforce. 

Educational Assistance and Professional Development

A highly skilled workforce benefits both employees and employers. Companies that invest in their employees’ education see higher retention rates and a more capable, motivated team. Offering financial support for professional growth fosters employee loyalty and enhanced workplace expertise. 

Educational assistance programs may include: 

• Tuition reimbursement 
• Certification courses 
• Workshops for professional development 

Supporting continuous learning not only strengthens employees’ skills but also contributes to long-term business success.

Alternate Perks and Discounts

The ceiling is never the limit when it comes to providing benefits to your employees. Many companies think outside the box to provide additional perks. Some common perks are: 

• Discounts on phone bills, travel or retail
• Free lunches or in-office snacks 
• Company events, like retreats 

These perks are put in place to encourage employees to participate and build the organization’s culture. In addition, it’s a way for employees to consider an employee’s income and provide them with some savings in their day-to-day life. 

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Build the Best Employee Benefits Program with KASE Insurance

Beyond the legislated requirement to provide employee benefits, offering employee benefits plays a pivotal role in your team’s overall well-being, job satisfaction and financial security.  

It’s important to understand the various types of benefits available and make the most informed decision when building your benefits package. When you’ve put together a thoughtful and well-structured employee benefits program, you can attract top talent and foster an environment of positivity and retention. 

But where do you start? How do you know what is right for your business size and type? If you’re looking to build the perfect employee benefits package, KASE Insurance is the team for you. 

As a leader in providing customized insurance options, we specialize in aligning your business goals with your employees' needs. Whether you’re looking for extended health benefits or retirement savings plans, our expert benefits broker team will guide you through each step of the way. 

Contact us to build a work benefits package to keep your current workforce healthy and motivated while encouraging top talent to apply.