Hourly vs salary — what's actually different

The cash math is the same: hourly × hours = salary. The legal and benefits picture is very different. Salaried employees in Canada usually get paid leave (vacation, sick), employer-paid health insurance, RRSP matching, and (in most provinces) protection from being asked to work unpaid overtime. Hourly workers get paid for every hour worked but typically miss most of those benefits unless their employer chooses to extend them.

For employees, a $30/hr hourly rate at 40 hrs × 52 wks ($62,400/year) is not the same compensation as a $62,400 salary — the salary usually includes 2–4 weeks of paid vacation, meaning the salaried worker is effectively earning closer to $32–$33/hr for actual hours worked.

How vacation pay factors in

Most Canadian provinces require employers to pay 4% vacation pay on top of regular wages for the first 5 years of employment, rising to 6% after. For hourly workers paid by the cheque, that 4% is usually rolled into your hourly rate (you just don't get paid time off). For salaried workers, vacation pay is built into the annual salary — you get the same paycheque while you're away.

Saskatchewan starts at 6% (3 weeks). Quebec uses 4% (2 weeks) rising to 6% after 3 years. The federal labour code matches Quebec's structure for federally regulated employees.

Self-employment and contractor rates

If you're going independent, you typically need to charge 1.3× to 1.5× your equivalent hourly rate to cover what an employer was paying behind the scenes. A T4 employee earning $30/hr is also costing the employer roughly $4–6/hr in CPP, EI, vacation pay, and benefits — costs you now absorb yourself.

Contractors also need to set aside 25–35% of every invoice for taxes (since you don't have payroll deductions) and budget for HST/GST remittance once you cross $30,000 in revenue. Use our income tax calculator to size your tax setaside accurately.

Statutory holiday pay

Canada has 5–10 statutory holidays per year depending on province. Hourly workers who don't work the holiday usually still get a stat pay payment based on average earnings; those who work the holiday get the stat pay plus 1.5× their hourly rate for hours worked. Salaried workers get the day off without a pay change. See our stat pay calculator for the per-province formulas.

Canadian Minimum Wage by Province (2026)

Minimum wages in Canada vary by province and are updated periodically. Here are the current rates:

These are approximate values. Some provinces have different rates for students, liquor servers, or specific industries.