Overtime Pay in Canada: How It’s Calculated

Overtime pay in Canada is a fundamental aspect of employment law, directly impacting the financial health of both workers and businesses. 

As an employee, understanding overtime is one of the most important benefits you need to track. It is the difference between being fairly compensated and losing potentially thousands of dollars each year if you regularly work beyond your standard hours. 

For employers, paying overtime correctly is vital for compliance and healthy workplace relations. Miscalculating these payments leads to costly legal penalties and damages the trust of your team.

This guide explains how overtime pay works across all of Canada in 2025. It gives you the practical steps to accurately calculate overtime and make sure you are following the rules, whether you’re managing a large payroll or just checking your own paycheck.

What is Overtime Pay in Canada?

Overtime pay in Canada is the legally mandated, premium compensation an employee receives for hours of work that exceed a set daily or weekly threshold. This premium is typically calculated at 1.5 times, known as time-and-a-half, the employee’s regular hourly wage.

The specific rules governing overtime depend on the employer’s jurisdiction:

• Federal Jurisdiction (Approx 10% of workers): 

Governed by the Canada Labour Code, this applies to industries like banking, telecommunications, and interprovincial transportation. Federally regulated employees are generally entitled to overtime after 8 hours per day or 40 hours per week.

• Provincial/Territorial Jurisdiction (Approx 90% of workers): 

The majority of employees are covered by their respective provincial or territorial Employment Standards Acts (ESA). These laws set varying thresholds, with the most common being 40, 44, or 48 hours per week.

Regardless of the jurisdiction, employers must adhere to the minimum 1.5 times rate once the legal threshold is crossed. While an employer is free to offer a more generous rate or a lower hour threshold, they cannot legally offer less than the time-and-a-half premium set by the applicable federal or provincial legislation.

When Do You Qualify for Overtime Pay in Canada?

You qualify for overtime pay once you work beyond the overtime threshold established by your province, territory, or federal jurisdiction. This threshold can be weekly (total hours in a workweek), daily (hours in a single workday), or both, depending on where you work.

Most Canadian employees are non-exempt, meaning they are entitled to overtime pay when exceeding these thresholds. Your employment status, full-time, part-time, temporary, or permanent, does not affect eligibility. Being paid a salary instead of hourly wages also does not automatically exempt you from overtime. What determines exemption is your job duties and level of responsibility, not your pay structure.

Overtime laws apply across most industries, though agriculture, construction, and certain public sector roles may have modified rules under provincial legislation. Collective agreements can establish different overtime provisions than provincial minimums, but cannot offer less favourable terms.

How Do Provincial Overtime Rules Differ Across Canada?

Overtime rules in Canada establish a complex system across 13 provinces and territories, with weekly thresholds ranging from 40 to 48 hours, and only a handful of provinces and territories apply daily overtime rules. 

The following table summarizes overtime thresholds and rates across all Canadian provinces and territories, as of October 2025:

Source: Overtime – Avanti.ca

The differences between provinces create significant pay variations for identical work schedules. These variations particularly affect workers in national companies with standardized scheduling practices across provinces.

How daily and weekly overtime interact: In provinces with both thresholds, you earn overtime based on whichever limit you exceed first, but you are not paid overtime twice for the same hours.

How to Calculate Overtime Pay in Canada

Calculating your overtime pay requires two pieces of information: your province’s overtime threshold and your regular hourly rate. Once you have these, the calculation follows a straightforward formula. 

Below are detailed guidelines for hourly employees, salaried employees, multiple pay rates, and piece-rate workers.

Calculating Overtime for Hourly Employees

For hourly workers, overtime is typically paid at 1.5× the regular hourly rate. The basic formula is:

Total pay = (Regular hours × Regular rate) + (Overtime hours × Overtime rate)

For example, an employee in Ontario earns $28 per hour. The overtime threshold in Ontario is 44 hours per week. This week, they worked 50 hours.

• Regular pay: 44 × $28 = $1,232
• Overtime rate: $28 × 1.5 = $42/hour
• Overtime pay: 6 × $42 = $252
• Total weekly pay: $1,232 + $252 = $1,484

The calculation remains straightforward regardless of when overtime hours occur.

Calculating Overtime for Salaried Employees

Earning a salary does not necessarily mean you are exempt from overtime. If you are classified as a non-exempt salaried employee, you are still eligible for overtime pay just like hourly staff. To determine your overtime rate, you will first need to convert your annual salary into an equivalent hourly wage.

How to Calculate the Hourly Rate:

Hourly Rate = Annual Salary ÷ (52 weeks × Standard Working Hours per Week)

The Standard Working Hours are typically based on the provincial/state OT threshold or your employment contract. If your province/state has a threshold of 40 hours per week, then use 40.

For example, consider a marketing manager in Manitoba earning $65,000 annually. 

• Weekly salary: $65,000 ÷ 52 = $1,250
• Hourly rate: $1,250 ÷ 40 = $31.25/hour

When this manager works 47 hours, they receive their regular weekly salary plus overtime for 7 hours. 

• Overtime rate: $31.25 × 1.5 = $46.88/hour
• Overtime pay: 7 × $46.88 = $328.16
• Total pay: $1,250 + $328.16 = $1,578.16

Employment contracts sometimes specify different calculation methods or deem certain amounts as overtime-inclusive. So, make sure you review your employment agreement carefully, though provincial minimums always apply regardless of contractual terms. 

Blended Rate Calculations for Multiple Pay Rates

Employees working at different rates during the same week need weighted average calculations for overtime. A retail supervisor earns $22 hourly for floor shifts and $26 for management duties. Working 30 hours on the floor and 18 hours managing (48 total in Ontario), their calculation requires finding the blended rate.

• Total earnings: (30 × $22) + (18 × $26) = $1,128. 
• Blended rate: $1,128 ÷ 48 = $23.50. 
• Overtime rate becomes $23.50 × 1.5 = $35.25. 
• With four overtime hours, additional pay equals 4 × $35.25 = $141.

This method ensures fair compensation reflecting all work performed, not just hours at the lower rate.

Calculating Overtime for Piece-Rate Workers

Even if you’re paid by the piece instead of by the hour, you are still owed overtime in most provinces. The key is first to determine the employee’s “effective” or “blended” hourly wage for the pay period.

For example, an employee in a 44-hour threshold province works 35 hours at $17/hour and 13 hours at $20/hour (total 48 hours).

• Total Regular Earnings: (35 × $17) + (13 × $20) = $595 + $260 = $855
• Blended Hourly Rate: $855 ÷ 48 total hours = $17.81/hour
• Overtime Hours: 48 total hours – 44 threshold hours = 4 overtime hours
• Overtime Rate: $17.81 × 1.5 = $26.72/hour
• Overtime Pay: 4 hours × $26.72 = $106.88
• Total Gross Pay: $855 (regular pay) + $106.88 (overtime pay) = $961.88

In case wages are calculated based on a blended rate, the overtime must also be paid at 1.5 times the blended hourly rate. This ensures that piece-rate or mixed-rate workers receive fair overtime compensation consistent with employment standards.

Who is Exempt from Overtime Pay in Canada?

Overtime exemptions exclude specific employees from statutory overtime entitlements based on their job responsibilities, professional status, or industry.

Management and Supervisory Exemptions

Managers and supervisors are the most common roles considered overtime exempt. But the exemption is never based on the job title alone; it’s based on the nature of the work performed.

A manager who primarily performs the same tasks as their reports likely qualifies for overtime, while someone without the manager title but who schedules staff, approves expenses, and makes hiring recommendations might be exempt.

Professional and Industry-Specific Exemptions

Each province has a list of exempt professions and industries. Common examples include:

• Licensed Professionals: Doctors, lawyers, dentists, architects, professional engineers, and accountants.
• IT Professionals: In some provinces (like Ontario and BC), certain IT professionals who meet specific criteria regarding duties and sometimes salary may be exempt. This is a complex area.
• Salespeople: Many commissioned salespeople who have control over their hours and work away from the employer’s place of business are exempt.
• Farming and Agriculture: Most farm labourers are exempt from standard overtime rules.
• Transportation: Long-haul truck drivers often have special hours-of-service rules instead of standard overtime.

To be certain, check the specific list of exemptions in your province’s Employment Standards Act.

How Overtime Pay Works for Stat Holidays in Canada?

When you work on a statutory holiday in Canada, you typically receive premium pay in addition to your regular earnings. This is separate from overtime pay, though the two can overlap. 

In most provinces, working a statutory holiday means you receive your regular day’s pay plus time-and-a-half or double-time for hours actually worked on the holiday. Statutory holidays can affect your weekly overtime calculation. 

In provinces with a 40-hour threshold, if you receive 8 hours of paid stat holiday time, you may reach your weekly threshold after working just 32 hours. 

For example, in British Columbia, if you get Monday off as a paid stat holiday (8 hours), then work Tuesday through Friday (32 hours), you’ve reached your 40-hour weekly threshold and any additional hours would be overtime. 

Statutory holiday entitlements vary considerably by province, including which holidays are recognized and what premium rates apply. Always check your provincial Employment Standards Act for specific statutory holiday provisions.

How Does Banked Time and Time Off in Lieu Work in Canada?

Banked time, or Time Off in Lieu (TOIL), is a popular alternative for many Canadian employees who prefer earning future paid time off instead of immediate overtime pay. This arrangement is highly valued for facilitating extended vacations or flexible scheduling.

In most provinces, employees can “bank” overtime hours as paid time off instead of receiving a cash payment, provided there is a written agreement between the employer and employee.

• Accrual Rate: Overtime is banked at the premium rate. One hour of overtime worked becomes 1.5 hours of paid time off.
• Time Limits: Provinces impose deadlines for using banked time (e.g., 3-12 months). If the time is not used by the deadline, the employer must pay it out at the overtime rate.

However, the specific rules for overtime banking and time off in lieu vary across provinces. For example:

• British Columbia allows banking agreements lasting up to six months, with payout required if unused. 
• Quebec permits banking with mutual consent but requires usage within twelve months. 
• In Manitoba, overtime can be banked at 1.5 hours off for each overtime hour, regardless of whether you’re paid hourly or on a salary. For salaried employees, the employer must first convert your weekly or annual salary to an hourly rate, and then apply the same 1.5× rule.

While time off in Lieu offers flexibility, it’s important to be aware of the associated risks. Banked time represents a debt the employer owes you. If your employer faces financial difficulties or bankruptcy, banked time converts to a wage claim, and you may be at risk of not receiving full or timely compensation.

Can Employers Require Mandatory Overtime in Canada?

Canadian employers generally possess the right to require reasonable overtime. However, that right is balanced by important rules set by employment contracts, provincial legislation, and workplace safety considerations.

Employers can mandate overtime when operational needs demand extended coverage, provided they give you reasonable notice and comply with maximum hour limitations. Most provinces don’t specify minimum notice periods, so what’s considered “reasonable” depends on the industry and situation.

That said, employers must consider individual circumstances and cannot require overtime that would violate maximum hours legislation or create unsafe working conditions. They also cannot use mandatory overtime to avoid hiring adequate staff for predictable workload demands.

From the employee’s side, you can refuse overtime primarily for three reasons:

• The work would exceed the provincial maximum hours (usually 48 hours/week), unless a written agreement permits a higher limit.
• The overtime creates genuine family hardship (e.g., critical childcare or eldercare responsibilities).
• The work would compromise your safety due to fatigue, especially in hazardous jobs. Specialized rules apply to sectors like transportation and healthcare.

What to Do if Your Overtime Pay is Incorrect or Unpaid

If you believe you haven’t been paid correctly for overtime, you have the right to get the money you’ve earned. Follow the three simple steps below:

Step 1: Gather Proof

Your first step is to collect evidence that shows the hours you worked and the pay you received. The more proof you have, the stronger your case will be.

• Track Your Hours: Write down the dates and the exact times you started and finished work each day.
• Collect Documents: Keep copies of your pay stubs, work schedules, and timesheets.
• Save Messages: Save any emails or texts where your boss asked you to work late or on weekends.
• Calculate the Difference: Figure out how much you should have been paid versus what you actually received.

Step 2: Talk to Your Employer

Next, bring the issue to your employer’s attention in a professional way.

• Write it Down: Send a polite email or letter to your manager or HR department.
• Explain the Problem: Clearly state which paycheques are wrong and show them your proof and calculations.
• Ask for a Correction: Request that they fix the error and pay you the missing amount.

Many employers will correct honest mistakes quickly. Always keep a copy of the email or letter you send.

Step 3: File a Government Complaint

If your employer doesn’t fix the problem, you can get help from the government.

• Contact Labour Standards: Find the employment or labour standards office for your province or territory online.
• File a Complaint: Fill out their official complaint form and include copies of all the proof you gathered.
• Don’t Wait: There are deadlines for filing a complaint, so it’s important to act quickly.

An investigator will look at your case. If they find your employer made a mistake, they will be ordered to pay you.

The Bottom Line

Overtime pay in Canada is far from one-size-fits-all. With 13 different provincial and territorial rules, plus federal regulations, the threshold for overtime can range from 40 to 48 hours per week, and overtime rates vary depending on where you work and what industry you are in. 

For employees, knowledge is power. By understanding your rights, tracking your hours, and knowing the steps for recourse, you can ensure you are paid fairly for your work.

For employers, staying compliant means being proactive and regularly reviewing your policies and keeping accurate records. These steps are the best ways to prevent costly mistakes or legal issues.

Finally, both parties should always refer back to the official government sources for the most up-to-date information.

FAQs about overtime pay in Canada