Updated on 1 August 2026

When your small business starts thriving, you may realize you must bring workers on board. But before posting those job ads, you need to know the cost to hire employees for your business. Assessing the cost of hiring staff involves more than just salaries and wages. Many direct and indirect staffing expenses, such as staff benefits, advertising, employment, and training, significantly increase employer costs. This article provides a guideline on the cost of recruiting and hiring an employee today.

What’s New in 2026?

• In 2026, several employment costs have changed for Canadian employers. The federal minimum wage increased to $18.15 per hour on April 1, 2026, although provincial and territorial minimum wages may differ.
• For 2026, the CPP maximum employer contribution outside Quebec is $4,230.45, with up to an additional $416 under CPP2. The maximum employer EI premium outside Quebec is $1,572.30 per employee.

What is the Cost of Hiring an Employee?

Employing workers needs preparation and planning, like building a solid, long-standing investment portfolio. Knowing the costs to hire employees will help you save money, time, and other resources. Here are some of the expected costs of hiring a new worker in Canada:

The Cost of Salaries and Wages in 2026

Signing a new employee will cost your business more than their salary and wages. And for your business to keep going, you need adequate sales to cover the additional expenses and salaries for the new employees. The federal minimum wage in Canada is $18.15 CAD per hour as of April 1, 2026. It applies to employees in federally regulated private-sector workplaces. If the applicable provincial or territorial minimum wage is higher, the higher rate applies. Recruiting and hiring qualified personnel is more expensive, especially if the job needs special skills or experience.

Even if you have an idea about the base salary of the fresh employee, you should consider all associated recruitment expenses, including:

• Core salary;
• Benefits such as pension or retirement contributions, health and dental benefits, vacation pay, sick leave benefits, and other employer-sponsored benefits, where applicable;
• Employer payroll costs such as CPP/CPP2 contributions (or QPP/QPP2 in Quebec), EI premiums, and applicable provincial payroll-related costs;
• Bonuses, both signing bonuses and yearly performance bonuses.

Employer CPP and EI Costs in 2026

For 2026, employers outside Quebec must account for both CPP and EI contributions when calculating the total cost of hiring an employee. The key contribution rates and limits are:

These payroll contributions increase the actual cost of hiring an employee beyond their base salary. Employers should include both CPP/CPP2 contributions and EI premiums when estimating their total employment costs for 2026.

Job Posting Fees

The best way for businesses to find potential candidates is by posting on virtual job boards. Most job seekers utilize these job boards when looking for advertised positions, so you should expect several applications. However, every job board has a unique payment scheme, and job posting costs can vary depending on the platform, type of listing, and promotional options selected. Some platforms also offer free job postings. For example, the Government of Canada’s Job Bank allows employers to advertise jobs for free.

You can utilize job boards such as:

• LinkedIn;
• SimplyHired;
• Job Bank;
• Indeed;
• Glassdoor.

Recruitment Team and Internal Human Resource Team

An external staffing team can help find potential candidates if your internal resources are limited. Handing over recruiting to third parties can help your business save time for existing workers. However, you will have to pay the cost to hire employees.

Depending on the recruiting company you choose, recruitment fees can vary based on the agency, industry, type and seniority of the position, and the hiring model. Some recruiters will charge higher fees for specialized or executive roles, increasing the cost of a new hire.

Your business may still need an internal human resources team of one or more professionals to handle in-house human resource responsibilities. They may also manage the recruiting or internal training and onboarding process. Human resources salaries and other expenses will vary depending on the position, experience level, location, and size of the business.

Background Checks and Security Clearances Costs

After finding a person you want to hire, you need to learn more about them before making your offer. That is why running background checks on new hires is essential. This can be a cost of recruiting and hiring, with the amount varying depending on the provider and the type and depth of screening required. You can verify their education and previous employers and, where appropriate and legally permitted, conduct criminal record checks. Certain positions, government contracts, or roles involving access to protected or classified information may also require security screening or clearance, which can involve additional time and costs.

Employee Onboarding and Job Training Costs

Onboarding a new hire takes time. Depending on the job role, the process may take one or several days. Your new personnel may not reach full productivity during this time.

In addition, the person handling the onboarding also loses the time they spend handling other company tasks. Onboarding expenses will vary based on the staff and supervisor’s salaries, as well as other costs such as equipment, software, administrative setup, and the time required for orientation.

Job training is another substantial cost of hiring a new employee in Canada. This expense will also take significant time, particularly when employing for roles that need specific compliance requirements or skills. Some workers may require weeks of training before they become fully productive. Your business may experience reduced productivity during this period, and you may also have to pay for training. Training costs can vary significantly depending on the industry, company size, job requirements, and type and duration of training provided.

Conclusion

Hiring new employees is a decision that should be taken seriously because it significantly impacts the company budget. Whether employees work remotely, on-site, or under a hybrid arrangement, the costs of employing staff will still remain. Fresh staff will still need equipment, training, and onboarding to assist them in settling into their job roles and set them up for success. However, not much work will be done without workers, and this may affect your business. Therefore, even though the cost of hiring a new employee in Canada can significantly affect your company budget, investing in the right personnel can provide a worthwhile return over time.

Frequently Asked Questions (FAQs)

How Much Does It Cost a Business To Hire a New Employee?

The cost of recruiting and hiring new employees involves more than the salary. You also need to factor in benefits and other compensation such as equity and the considerable time investment you use when employing. The time it takes to see a positive return on your investment and for a new employee to reach full productivity can vary significantly depending on the role, experience level, training requirements, and nature of the work.

How Can You Calculate the Cost of Hiring a New Employee?

To determine the cost of a new hire, you should consider more than just the salary paid. As an employer, you should look at the worker's base salary and benefits, including employer payroll costs such as CPP/CPP2 contributions and EI premiums, as well as the equipment they need to perform their core job. In addition, you should consider any costly training materials they will require and the loss of productivity your business may experience when the employee is being trained or learning. The truth is that even if you hire the most skilled employees, they need time to adjust to the new bosses and processes, which uses the company's money and time.

Is It Cheaper to Train Existing Employees or Hire a New One?

Based on the circumstances, it may be cheaper to train your current worker for the new role rather than hire a new employee. By training existing employees, you may avoid some recruitment, staffing, and relocation costs. In addition, your business may experience a minor dip in productivity as the employee integrates into their role. The difference in expenses will depend on the type of training needed and the employee's current and expected salary.

What Are the Basic Costs Involved in Hiring an Employee in Canada?

Basic costs include salary, benefits, employer payroll costs, and additional expenses such as recruitment, training, and onboarding.

How Much Does Recruitment Typically Cost?

Recruitment costs vary depending on the recruiting agency, job role, industry, seniority of the position, and hiring model. Specialized and executive roles may involve higher recruitment fees.

What Are the Costs Associated with Job Postings?

Job posting fees vary depending on the platform and type of listing. Some platforms offer free job postings, while others charge for listings, subscriptions, or promotional features.

What Are the Costs of Background Checks and Security Clearances?

Background check costs vary depending on the provider and the type and depth of screening required. Certain positions or roles involving access to protected or classified information may also require security screening or clearance, which can involve additional time and costs.

How Much Does Employee Onboarding and Training Cost?

Onboarding and training costs vary depending on the role, industry, company size, training requirements, equipment and software needs, and the amount of time required for the employee to reach full productivity.

Are There Any Ongoing Costs after Hiring an Employee?

Yes, ongoing costs include salaries, benefits, employer CPP/CPP2 contributions, EI premiums, applicable provincial payroll-related costs, vacation pay, and additional training or development programs.

How Do Benefits and Payroll Costs Affect the Cost of Hiring?

Benefits such as health insurance, pension or retirement contributions, paid leave, and other employer-sponsored benefits can increase the total cost of hiring an employee. Employers must also account for applicable payroll costs, including employer CPP/CPP2 contributions (or QPP/QPP2 in Quebec) and EI premiums.

What Is the Impact of Hiring Costs on Small Businesses?

Hiring costs can be substantial for small businesses, impacting their cash flow and requiring careful financial planning. Employers should consider both upfront recruitment expenses and ongoing employment costs when planning their budgets.

How Do Industries Vary in Terms of Hiring Costs?

Industries requiring specialized skills, extensive training, certifications, or security screening may incur higher hiring costs due to additional recruitment, training, and compliance requirements. Costs can also vary depending on the seniority and complexity of the position.

Can Technology Help Reduce Hiring Costs?

Yes, using automated recruitment tools and online training programs can help streamline the hiring process and reduce associated costs. These tools can also reduce the time spent on recruitment, onboarding, and other administrative tasks.