Spotlight on Canada – A guide to implementing employee benefits technology

Many of our customers are implementing employee benefits technology in Canada, a country celebrated for its vast landscapes and multicultural cities. With a diverse and highly skilled workforce, Canada offers a unique environment for companies looking to attract and retain top talent – and comprehensive and innovative benefits packages can help employers win over the best people.

Delivering employee benefits in a bilingual country

When rolling out employee benefits in Canada, organisations must consider its diversity of language. For those companies with offices in Quebec, legislation requires communication in both English and French. As a result, organisations use platforms like OneHub to deliver benefits information in both languages. Employers enhance accessibility and inclusivity by offering dual-language options – helping employees fully understand and engage with their benefits, while ensuring compliance with local regulations.

An overview of the employee benefits landscape

Mandatory benefits

Employers are required to provide several mandatory benefits, ensuring employees can access essential protections and support. These include:

Pension plan contributions: Employers must contribute to the Canada Pension Plan (CPP) or the Quebec Pension Plan (QPP), depending on the province. These plans provide retirement, disability, and survivor benefits for employees. Employers and employees pay half of the contributions each; the total contribution is 5.95% of pensionable salary for the CPP, or 6.40% for the QPP. Since January 2024, employees and employers have started contributing an additional 4% to both CPP and QPP of pensionable salary. Pensionable salary for additional contribution purposes is based on the employee’s earnings between the year’s maximum pensionable earnings (YMPE) and the year’s additional maximum pensionable earnings (YAMPE). For 2024, the YMPE and YAMPE are equal to CAD 68,500 and CAD 73,200, respectively.

Employment Insurance (EI) contributions: Employers are required to contribute to Employment Insurance, which provides temporary financial assistance to unemployed workers, new parents, and those who are sick or caring for a seriously ill family member. Employees contribute 1.66% of their insurable earnings (1.32% in Quebec), with employers contributing 1.4 times the employee contribution.

Core benefits in Canada

In addition to the above mandatory benefits, many employers offer:

Retirement plan options: A registered pension plan (RPP) can be fully or part funded – and is common in almost all companies. Similar to 401K pensions in the US, Canada has an equivalent called RRSPs (Registered Retirement Savings Plans). These are individual retirement plans, which are easier to manage from a governance perspective. In addition, many employers provide other options like Deferred Profit-Sharing Plans (DPSPs), Tax-Free Savings Accounts (TFSAs), and Registered Retirement Savings Plan (RRSPs). Employer matching contributions typically range from 1% to 7%, with 3% to 7% being more common.

Supplementary health insurance: Most employers provide supplementary health insurance to cover costs for employees and their dependents, complementing Canada’s publicly funded healthcare system. This is to cover services not included in the public system, such as optical care and prescription drugs.

Dental insurance: Employers typically fund the cost for dental insurance, which covers diagnostic and preventative treatment.

Life and disability insurance: These are common benefits provided by employers. Life insurance tends to be 2 x annual salary and offered by almost all employers. Short-term and long-term disability is also typically offered by employers and provides a salary continuation of 66.7% of an employee’s annual salary in the event of a disability.

Other popular benefits in Canada

In addition to the above core and mandatory benefits, Canadian employers are increasingly offering a variety of popular and emerging benefits to attract and retain the very best talent.

Wellness benefits and allowances: Many employers now offer mental health support, Employee Assistance Programs (EAPs) and wellness benefits. Increasingly, employers are recognising the importance of supporting employees’ physical and mental health, using their benefits platform to communicate a growing range of resources and support available to their people. Employees can log into their benefits platform to understand and access resources, help lines for mental health, support for families around care and early years, as well as health assessments and vision benefits.

Employers are increasingly offering wellbeing allowances instead of gym memberships – giving employees greater flexibility and choice in managing their wellbeing. These allowances are often used in conjunction with/linked with flexible spending accounts, which employees can use to supplement their core benefits.

Flexible savings accounts: Employees use flexible savings accounts to contribute towards medical expenses not covered by their insurance plans, or where the company doesn’t offer private medical insurance. Sometimes employers will also contribute to this, depending on the rest of their offering.

Childcare and support: A growing number of our customers are offering emergency childcare benefits. Some employers are also providing discounted nursery places, especially those who want to be above-market for their benefit offering.

Car/transportation allowances: Car and transportation allowances are a common benefit provided by Canadian employers, especially at senior level. These allowances can be structured in various ways, including fixed monthly payments or reimbursements based on mileage. And in larger cities, discounted season tickets are very common.

Key considerations for implementing employee benefits in Canada

When rolling out employee benefits in Canada, there are several important factors to consider…

1. Offering flexibility in benefits

Employers are using allowances to introduce the greater flexibility that employees are increasingly asking for. Indeed, 48% of global employees say they want more flexibility in the benefits they choose.

With the move towards more hybrid working environments, tech allowances are growing in popularity, as well as the use of commuter allowances to encourage employees to come in for office days and team days. Lunch allowances and discount portals are also gaining popularity as employers look to help employees combat rising daily living costs.

Our customers are increasingly offering greater flexibility across retirement, life and disability benefits, as well as medical and dental insurance. Companies and employees can usually flex these benefits up or down – or add additional cover (at their own expense).

2. Bringing all your benefits together in one place

With such a wide range of advice and information on employee benefits offered by companies, it can be hard for employees to find these resources if they’re spread across disparate systems. Forward-thinking companies are increasingly consolidating their resources on a benefits platform and using benefits tech to effectively communicate the value of everything they do for their people – across wellbeing, benefits, communications, culture and recognition.

3. Global consistency for international employers 

International organisations with people in various locations across the globe can find it difficult to provide a consistent benefits experience – especially as local benefits options vary significantly. However, many companies are turning to global employee benefits technology to provide a unified benefits experience, regardless of where employees are based; 49% of organisations say the main reason they’re implementing benefits tech is to provide a globally consistent employee benefits experience.

4. Communicating in local language

One way to achieve this is by implementing employee benefits technology that allows you to change the language of your benefits platform to suit each employee. By providing benefits information in local languages, all your employees will understand the true extent of their benefits offering.

Three future trends in Canadian employee benefits

The landscape of employee benefits in Canada is continually evolving. Here are some of the key trends to watch:

1. Increased focus on mental health

Companies are expanding their mental health support offerings as awareness of mental health issues grows, and employees are increasingly looking to their employers for resources, help and advice.

2. Sustainability and ESG

Companies are increasingly aligning benefits with their environmental, social, and governance (ESG) goals. This often includes offering benefits that promote sustainability, such as incentives for using public transportation or purchasing electric vehicles.

3. Delivering personalised experiences 

With 45% of employees demanding more personalisation in benefits, employers in Canada are offering increasingly personalised benefits packages that allow employees to choose the benefits that best meet their individual needs.

To learn more about how a global benefits platform can help you deliver a seamless employee experience in Canada, and around the globe, download ‘Your guide to global benefits tech’, or speak to one of our benefits experts.