Assuming there are no changes to the personal tax rates, Canada Pension Plan contributions, and Employment Insurance premiums in 2019, an individual working 40 hours a week will need to earn approximately $492 net, after payroll source deductions for the employer to be compliant. The same exercise will need to be performed at the beginning of next year to ensure that your nanny is paid a gross hourly wage at least equal to the higher minimum wage amount. In 2019, the minimum wage in Ontario is expected to increase again, to $15 an hour. Also, keep in mind, for a live-in-nanny, the taxable room and board benefit cannot be included in calculating the gross wage for purposes of meeting the new minimum wage. This means a 40 hour per week nanny will need to be paid at least $463 per week for an employer to be compliant with the new minimum wage legislation. This works out to roughly $463 net pay per week. For these wages, there would be payroll source withholdings of $3,314 for income tax, $1,268 for Canada Pension Plan contributions, and $484 for Employment Insurance premiums, resulting in a net salary of $24,054. Many nannies negotiate their wage based on the net take-home pay (gross wage net of withholdings for income tax, Canada Pension Plan contributions, and Employment Insurance premiums), so once employers have settled on a net take home pay amount with their domestic worker, they must ensure that the corresponding gross wage is in compliance with the new minimum wage legislation.Īs an example, for a nanny who works 40 hours a week, the gross annual salary at the new minimum wage of $14 an hour will need to be at least $29,120 ($14 x 40 hours x 52 weeks). A perhaps unforeseen impact of this new legislation is that individuals will need to re-evaluate the amount paid to personal service employees, such as nannies and domestic workers. Effective January 1, 2018, the minimum wage in Ontario increased to $14 per hour, representing a 21 per cent increase from the previous $11.60 per hour.
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