Other taxes relevant to companies in Canada

[aburaihan66]

When a company hires employees in Canada, it must make certain mandatory payroll-related contributions. These contributions fund essential programs, such as Employment Insurance and the Canada Pension Plan. The main ones are:

Employment Insurance (EI) contributions : employers pay 1.4% of each employee's annual earnings, up to a maximum limit of CAD 1,403 (US$1,039). This insurance allows employees to ecuador phone number library receive temporary income in the event of unemployment or parental leave.
Canada Pension Plan (CPP) contributions : Employers contribute 5.95% of each employee's annual earnings, up to a maximum of CAD$3,166 ($2,342) per employee. These contributions ensure retirement and other pension-related benefits.
Let's look at a practical case to understand it better :

A company with 10 employees, each earning CAD$60,000 ($44,460) per year, will have the following tax obligations:

Employment Insurance (EI) : 1.4% on CAD$60,000 equals CAD$840 ($622) per employee. Multiplied by 10 employees, this amounts to CAD$8,400 ($6,220).
Canada Pension Plan (CPP) : 5.95% on CAD $60,000 equals CAD $3,166 ($2,342) per employee, for a total of CAD $31,660 ($23,420) for the 10 employees.
In total, the company will have to pay CAD$40,060 ($29,640) annually in payroll taxes.

In addition to the main taxes, companies in Canada may be subject to the following taxes.