Ontario Minimum Wage 2021

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Ontario Minimum Wage 2021

Written by Corrina Murdoch
Fact-checked by Caitlin Wood

Updated June 2, 2021

Ontario Minimum Wage 2021

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Minimum Wage Ontario

Despite an ageing population, the labour force in Ontario continues to grow, meaning that, every day, young Canadians join the workforce. Since our largest province, and home to the Capitol, has 1.9 million youth, they will quickly make up a large portion of the labour market. Despite a socialized education system, many youths enter the workforce with little information on their rights and responsibilities. A key piece of knowledge, one that can prevent young workers from getting taken advantage of, is the legal minimum wage.

Learn more about Canada’s minimum wage.

What Is A Minimum Wage?

Let’s talk about the background of minimum wage, Ontario first introduced the legislation in 1918. Currently, there is a federal minimum wage that dictates the least amount a worker can be paid for an hour of time. While there are some exceptions to the rule, this applies regardless of whether you are a casual worker, full, or part-time. It applies to all forms of payment including commission, flat rate, hourly, salary, or otherwise compensated (ex: piece work).

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However, because of economic discrepancies between provinces, the minimum wage figure changes each time you cross a border. In Ontario, the current minimum wage is $14.25 per hour. While, historically, the minimum wage has increased in increments, each step forward took a lot of time (and wasn’t necessarily consistent with inflation). To address this, effective October 1, 2020, a rule went into effect where the rates are to be adjusted each subsequent year on the same day, April 1st.

Wondering how much you’ll be taxed? Check out the tax rates by province.

Ontario Minimum Wage Rates: October 1, 2020, To September 30, 2021

The current minimum wage in Ontario is $14.25 per hour. Per the Making Ontario Open for Business Act, legislation enacted to repeal multiple labour regulations imposed by the preceding government, the minimum wage is set to increase annually. The change is set to reflect the Ontario Consumer Price Index for the preceding year. The most recent increase of October 1, 2020, was by $0.25 per hour.  

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Exceptions To Ontario’s Minimum Wage

While there are quite a few rules without exceptions, Ontario’s minimum wage isn’t one of them. In fact, there are several exemptions to the minimum wage; so, before you agree to a work gig, make sure you are familiar with your rights. 

Student Minimum Wage

Youth ought to be particularly wary of this caveat. It means that students who are less than 18 years old and work fewer than 28 hours weekly have a minimum wage of $13.40 per hour. A recent increase brought it up from $13.15 hourly. This applies whether the student is working during break or while on holiday. The legal age to leave school in Ontario; which, while not necessarily advisable, is 18. In essence, this minimum wage rule means that if you are underage, you get a lower minimum wage.

Got a lot of student debt? Check out this student loan repayment assistance plan.

Liquor Servers Minimum Wage

To account for the tips offered to liquor servers, those working in this role get a minimum wage of $12.45 per hour. Like all the other minimum wage figures, it recently increased by $0.25. Since this is substantially lower than the standard minimum wage, be sure to know your NOC code (National Occupation Classification code). While all types of foodservice roles fall under similar NOC codes, bartenders are classed under rule 6512 while regular table waiting falls under 6513. Knowing the difference can be the difference of more than a dollar per hour. 

Do you have a low income? Check out these tax tips for low-income earners.

Hunting and Fishing Guides Minimum Wage

As opposed to an hourly payment approach, hunting and fishing professionals get paid based on the overall time invested in the project. If the worker spends fewer than five hours consecutively during a day, they get a flat rate of $71.30. If the hunting or fishing guide works for more than five hours (whether back-to-back) or separate, they receive a flat rate of $142.60. This equates to roughly ten hours, so if you get the job done in seven hours, it’s a profitable arrangement. However, if it takes you anywhere up to 23 hours, it is a heavy loss. Accordingly, keep in mind that this is a minimum wage, not a cap, and therefore is open to negotiation. 

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Wilderness Guides Minimum Wage

Wilderness guiding applies to a whole host of activities from taking you in a hot air balloon to sherpa-ing you up a mountainside. Economically similar to a hunting and fishing guide, these workers fall under the same NOC code, though there are restrictions in terms of age requirements. The flat rate is the same as the previous category, at $71.30 for fewer than five consecutive hours or $142.60 for more than five hours, spread out or not. However, these standards don’t apply to those under 18 who work fewer than 28 hours weekly. In that situation, the compensation is according to student minimum wages. 

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Homeworkers Wage

One of the examples of a higher minimum wage than the baseline provincial minimum wage is homeworkers — those who work out of their own home. The hourly minimum in this situation is $15.70. Since these are employees of a company who use their own infrastructure to perform work tasks, the extra accounts for the added wear and tear on equipment. From laptops to office chairs to dedicating a portion of the home as an office, it saves the company overhead costs, and the minimum wage compensates the worker. 

Do you use your home as an office? Then you can claim these home office expenses for taxes.

Commission Wage

Different than an hourly worker, this is a common situation for salespeople. A common phrase in the industry is “minimum wage against commission”. Basically, it means that you must be paid at least the minimum wage equivalent for your time. However, if you earn a commission that exceeds that amount the employer only has to pay you that sum. Essentially, it’s an either-or situation. For example: 

Jane works eight hours a day for four days out of the week. Jane makes a minimum wage of $14.25 per hour. Jane is a salesperson who gets $20 for every sale and is paid minimum wage against the commission. 

Week 1: Jane only made three sales and worked a full 32 hours. 

$20 x 3 sales = $60 (calculated according to commission)

$14.25 x 32 hours= $456.

This means Jane makes a weekly gross total of $456. 

Week 2: Jane made 40 sales and worked a full 32 hours. 

$20 x 40 sales= $800 (calculated according to commission). 

$14.25 x 32 hours= $456. 

Instead of the two sums getting added together, Jane takes home the $800 (before tax). 

Find out how commission wages work in Alberta.

The 3-Hour Rule

Knowing this rule is essential to ensuring you get the largest paycheque possible. It applies to staff who usually work more than three hours in a shift. If workers are called into work for fewer than three hours, they must be paid for a full three hours. There are two approaches to payment and the worker is entitled to the higher of the two: 

  1. Regular pay rate: The worker is paid for the full three hours (whether they worked only ten minutes or just under three hours). 
  2. Rate plus tips: If the employee is in the service industry, they are entitled to any earned tips in addition to the full three hours’ pay. 

This regulation recently expanded to include students (of any age), though there are exemptions. If the student works at a children’s camp or recreational program, it does not apply unless they are also a wilderness guide of some sort. The three-hour rule is also inapplicable if the employee leaves before three hours due to circumstances beyond the control of the employer (illness, family emergency, etc.). It also doesn’t apply if the worker is casual and usually has shifts shorter than three hours. 

The Effect Of Room And Board On Minimum Wages In Ontario

Room and board has long been exchanged for wages. Essentially, it deducts the cost of providing that room (utilities, food, etc.) and board (living arrangement) from the wages. As labour laws evolve, the standards for deductions against a paycheque have become increasingly regulated. This is meant to both provide fair compensation for the employer and to ensure that the staff is fairly paid. 

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The standards are as follows:

  • Private rooms cost $31.70 every week, and a shared or ‘non-private arrangement is $15.85 per week. These rules, however, only apply to non-domestic (foreign workers). The amount is set to zero for non-private living arrangements for domestic workers. 
  • Capping out at $53.55 per week, each meal can be charged to the worker at rates up to $2.55. 
  • Room and board come with weekly costs of $85.25 for a private room and $69.40 for a non-private foreign worker. The non-private room for domestic workers rings in at $53.55 (the cost of food). 
  • Those providing harvest services, also called seasonal workers, pay a weekly housing fee of $99.35 for a serviced home and $73.30 for an unserviced location. 

To learn more about how these rates apply to your situation, consult Ontario.ca. Make sure you know your rights and potential recourse before you enter into a work agreement, especially if it overlaps with your housing situation. 

Are you missing a paycheque cause your employer declared bankruptcy? Then you may qualify for the wage earner protection program.

Ontario Minimum Wage And Taxes

When you start a new job, you fill out both provincial and federal tax forms. These are used to calculate the tax deduction withdrawn from your paycheque. Legal deductions include Employment Insurance, union dues, Canada Pension Plan costs; and, of course, income tax. This is remitted by your employer and held by the government until you file your taxes

Depending on how much you earned during the year, you can either get a refund or end up owing. In the majority of cases, so long as you pay tax as you go, you will end up with a return (due to grants and benefits) if you work at minimum wage. 

Here’s what you can do if you owe taxes to the CRA.

Income Tax: This amount is levied based on the total amount of taxable earnings you made over the course of the year. It depends on how many hours you worked. You must pay both federal and provincial taxes. The federal amount is set at 15% on amounts up to $49,020. Ontario income tax is set to 5.05% on the first $45,142. 

Basic Personal Amount: This number refers to the amount you can make before being charged any income tax. For the 2020 tax year, it is set to $12,298 and increases according to the consumer price index every year. If you work at the $14.25 minimum wage for a 40 hour work week, taking only two weeks vacation, you will earn a gross amount of $28,500.

Real World Tax Example

Without the basic personal amount or any grants and deductions, you would pay $1,439.25 to Ontario and $4,275 to the federal government. That means, during the year, you netted $22,785.75. 

With the basic personal amount, you only pay tax on $16,202 (your gross earnings minus the basic amount). That means you pay $818.20 to Ontario and $2,430.30 to the federal government. This increases your yearly net earnings to $25,251. 

Credits and Deductions: In addition to the basic personal amount deduction, there are other ways to drastically reduce your tax burden. First, let’s talk about tax credits. These are either refundable or non-refundable. 

  • Childcare costs
  • Age amount
  • Common-law or spousal amount
  • Medical expenses
  • Canada workers benefit
  • Educational expenses

Save all of your receipts during the year and ensure that you take advantage of every tax deduction possible. It will either reduce your taxable income or offer a refundable benefit (meaning it is paid to you). It is your legal responsibility to file your taxes every year, but you owe it to yourself to make the most out of the process. 

Frequently Asked Questions

Does the minimum wage in Ontario increase every year? 

Back in 2007, the minimum wage was only $8.00 per hour. Since that time, it’s increased to $14.25 in gradual increments. The changes were not yearly and did not rise by consistent amounts. 

Does Ontario have the highest minimum wage in Canada? 

No, but (if you don’t factor in the higher cost of living), it does have a fairly competitive rate. Nunavut takes the gold with a $16.00 minimum wage, though it has fewer job opportunities. Alberta takes the silver with a $15.00 dollar minimum. British Columbia takes the bronze at $14.60, with Ontario close on its tail at $14.25 per hour minimum. 

How much is Ontario’s minimum wage increasing by this year? 

This year, the Ontario minimum wage is increasing by $0.25 across the board. That means the adjustment applies to all the types of minimum wage from students to homeworkers. 

How much do minimum wage workers get paid extra for overtime in Ontario? 

In this province, overtime is calculated as time-and-a-half (1.5 times the employee’s standard pay rate). It starts once the employee has worked 44 hours over the course of a week. Hours worked in excess of that amount are paid at time-and-a-half. For minimum wage, this is $21.38 per hour. 

Are minimum wage workers paid for their lunch breaks?

Unless it is explicitly stated in the work contract, meal breaks are not paid. However, the worker is entitled to work no longer than five consecutive hours without a 30-minute break to eat. According to Ontario.ca, a half-hour eating break every five hours is the only break an employer is required to offer. The business is not obligated to offer any other type of break during their shift.  If the employee must remain on-site during the work break, the employer must pay minimum wage (at least) for the break. However, if they are free to leave, the worker is not entitled to payment for their eating break. 

Final Thoughts

The world is an economic jungle, and to survive, you need to know your rights and recourse options in the workplace. Understanding the ins and outs of minimum wage is essential to maximizing your earnings. After all, the minimum wage is a starting point, not a cap. According to Ontario Living Wage, it takes $18.42 to live securely in the province — so there’s still a ways to go. Whether you’re just entering the workforce or have years under your belt, know your value and defend your rights as a worker, including the entitlement to a minimum wage.


Rating of 5/5 based on 12 votes.

Corrina Murdoch has been a dedicated freelance writer and editor for several years. With an academic background in the sciences and a penchant for mathematics, she seeks to provide readers with accurate, reliable information on important topics. Working as a print journalist for several years, Corrina expanded her reach into the digital sphere to help more people gain insight into the realm of finances. When she's not writing, you can find Corrina swimming and spending time with family.

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