This article is about Justworks EOR (Employer of Record). What product am I using?
Public Health Coverage
In Canada, employers are not required to offer private health insurance. Instead, healthcare is funded and administered by the public system.
Canada’s healthcare system is:
- Universal: Every citizen and permanent resident is covered.
- Publicly funded: Services are paid through taxes.
- Decentralized: Each province and territory administers its own health plan, but receives support from the federal government.
Public health plans typically cover:
- Doctor visits
- Hospital care
- Medically necessary procedures
Prescription drugs, dental and vision care, and mental health services are excluded or only partially covered under the public system.
Supplemental Health Coverage
To attract and retain top talent, many Canadian employers—including Justworks—offer supplemental health insurance. Justworks partners with Sun Life to provide access to additional coverage, which may include:
- Prescription medication
- Dental and vision care
- Mental health services
- Paramedical services (e.g., physiotherapy, chiropractic care)
Statutory Insurance Benefits
Beyond public healthcare, employers are not required to provide other insurance benefits. However, they must contribute to federally mandated programs like Employment Insurance (EI) and the Canada Pension Plan (CPP).
Employment Insurance (EI)
EI provides income support for:
- Job loss (involuntary)
- Illness or injury
- Parental or compassionate leave
EI is a mandatory payroll deduction along with CPP contributions.
2024 EI Rates:
| Type | Amount |
|---|---|
| Max Insurable Earnings | $63,200 |
| Employee Contribution Rate | 1.66% |
| Employer Contribution Rate | 2.324% (1.4x rate) |
| Max Employee Premium | $1,049.12 |
| Max Employer Premium | $1,468.77 |
2025 EI Rates:
| Type | Amount |
|---|---|
| Max Insurable Earnings | $65,500 |
| Employee Contribution Rate | 1.64% |
| Employer Contribution Rate | 2.296% |
| Max Employee Premium | $1,077.48 |
Special Situations:
- New Hires: Employers must deduct EI even if a new employee already met their annual maximum elsewhere.
- Mergers/Acquisitions: Successor employers may count previous EI deductions if there’s a legal transfer of employment.
- Mid-year Job Changes: EI contributions continue until the annual cap is reached.
Workers’ Compensation
Each province operates its own workers’ compensation board. Justworks handles registration and premiums for eligible employees. Coverage includes:
- Work-related injury or illness
- Medical benefits
- Wage-loss replacement
Canada Pension Plan (CPP)
CPP contributions are mandatory:
- 5.95% paid by both employer and employee
- 2025 maximum employee contribution: $4,034.10
- Deducted automatically from pay
Life Insurance (Optional)
Justworks offers group life insurance in Canada through Sun Life. There are two primary types:
-
Term Life Insurance
- Lower cost
- Fixed term coverage
- Can help cover short-term debts, income loss, or funeral expenses
-
Permanent Life Insurance
- Lifetime coverage with higher premiums
- Builds cash value over time
- Offers flexibility and investment growth
Supplemental life insurance is not required by law, but it's a valued perk that helps protect employees and their families.
Employer Retirement Plans (Optional)
Some roles may include Group RRSPs for long-term savings. These are optional and will vary by position.
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.