Tools · Ontario

What an hour costs, and what to charge for it.

Pay rate is the smallest part of the bill. This adds the employer side — CPP, EI, workplace insurance, vacation pay, public holiday accrual and health tax — and works backwards from the margin you actually want.

The assignment

Pay rate Dollars per hour, before deductions. Hours per week Used for the weekly and annual figures only. Vacation pay Per cent. 4% under five years of employment, 6% at five or more. Public holiday accrual Per cent. An accrual you choose, not a statutory rate — see the note below. WSIB rate Dollars per $100 of insurable earnings. Default is code 001281, the administrative and clerical class for temporary employment agencies. Employer Health Tax Per cent. Zero if your Ontario payroll is under the $1,000,000 exemption. Target gross margin Per cent of the bill rate. Or: a bill rate you have been quoted Leave empty to use the target margin above.

This calculator needs JavaScript to add up. The formula and a worked example are below, and they are the whole of it — there is nothing hidden in the arithmetic.

What it costs you

CPP at 5.95% —

EI at 2.282% — 1.63% × 1.4

WSIB —

Vacation pay —

Holiday accrual —

Health tax —

Employer burden — On top of every hour

True cost per hour —

Bill rate —

Gross margin —

Margin per week —

Margin per year — 52 weeks, one worker

Read this before you quote on it

Two of these percentages are not really percentages.

CPP and EI both stop. For a worker who stays all year at a decent rate, the burden falls after the ceiling — so this figure is conservative rather than exact.

CPP has a basic exemption and a ceiling. The first $3,500 of annual earnings is exempt, and contributions stop once pensionable earnings reach $74,600 — a maximum of $4,230.45 each from employer and employee in 2026. Applying 5.95% to every hour slightly overstates the cost of a worker who will cross that ceiling and slightly understates nothing, which is the direction you want an estimate to err in when you are quoting.

EI stops too, at $68,900 of insurable earnings for 2026. The employer pays 1.4 times the employee premium, which is why the figure above is 2.282% rather than 1.63%.

The holiday accrual is your decision, not a rate. Ontario has nine public holidays and the Act does not express them as a percentage. 3.5% is roughly nine days against a working year; agencies that mostly run short assignments often carry less, and agencies with long placements carry more. Whatever you choose, the actual entitlement is calculated per holiday from the four weeks before it.

WSIB is per client, not per agency. A temporary employment agency is classified in the rate classes of the clients it supplies, so most agencies carry several rates at once and split insurable earnings between them. This calculator takes one rate; put in the rate for the client you are quoting.

Where these numbers come from

Every figure below is the 2026 published rate.

CPP: 5.95% employer and employee each, on earnings between $3,500 and $74,600. Maximum $4,230.45 each. Canada Revenue Agency
EI: Employee 1.63%, employer 1.4× that = 2.282%, on insurable earnings to $68,900. Canada Revenue Agency
Employer Health Tax: Ontario. Eligible private employers get a $1,000,000 exemption, lost above $5,000,000 of payroll; the rate reaches 1.95% at the top of the scale. Government of Ontario
WSIB: Temporary employment agencies are classified in their clients' classes. Class 001281, for administrative and clerical supply, is $0.20 per $100. WSIB policy
Vacation pay: 4% under five years of employment, 6% at five or more. Payable each pay period only with the employee's written or electronic agreement, and shown separately on the wage statement. Employment Standards Act guide

Questions

About this calculation.

Is this a quote I can rely on?

No. It is arithmetic on the figures you typed, and it deliberately leaves out everything that is specific to your business: your own administrative cost, bad debt, the cost of carrying receivables for sixty days, statutory holiday timing, and whatever you have agreed with this particular client.

Treat it as the floor under a quote rather than the quote.

Why is my real margin always lower than this?

Usually three things. Overtime, which bills at time and a half but also costs you time and a half plus burden. Unbilled hours — travel, short shifts, a no-show you covered. And the gap between paying weekly and being paid in sixty days, which is not a cost in this calculation but is very much a cost in your bank account.

We pay some people by the shift, not the hour.

Convert to an hourly equivalent for this tool. Inside the product it does not need converting — pay rates attach to the work assignment, so one person can carry several rates and the hours find the right one.

Does Zawrix calculate this for real hours?

Yes, and that is the point of it. The same components appear on the invoice line — both rates, the overtime multiplier, the holiday multiplier and the night premium — so margin is a subtraction you can see before the invoice is sent rather than a number somebody works out at the end of the month. How billing works →

Stop quoting from memory.

See the same arithmetic run against a real week of your hours.

Request a demo