Overtime Pay in Canada: Payroll Guide for 2025

Working extra hours can be a great way to boost your income, but only if you’re compensated correctly.

With different laws for federally and provincially regulated industries, and unique thresholds for every province and territory, understanding your rights to Overtime Pay Canada is crucial to ensure you’re receiving the proper compensation for your hard work.

Whether you’re an hourly employee wondering how time-and-a-half is calculated, or you’re unsure about your right to refuse extra hours, read on to find out what your rights are.

What is Overtime Pay in Canada?

Overtime pay compensates employees at a premium rate, typically 1.5 times their regular wage, for hours of work that exceed standard thresholds established by employment standards legislation.

This improved compensation acknowledges the personal sacrifices involved in working extended hours and encourages employers to manage staffing instead of overworking their existing employees.

In Canada, overtime regulations exist under two distinct jurisdictions.

• The Canada Labour Code: Governs federally regulated industries like banking, telecommunications, and interprovincial transportation, setting overtime at time-and-a-half after 8 hours daily or 40 hours weekly.
• Provincial and territorial employment standards: Cover most other workers, such as retail, hospitality, manufacturing, and construction, with thresholds ranging from 40 to 48 hours weekly, depending on your location.

While an employer may offer more generous overtime provisions, they must, at a minimum, adhere to the legally required time-and-a-half rate once the threshold is crossed. 

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:

Province/Territory	Daily Threshold	Weekly Threshold	Overtime Rate	Special Rules
British Columbia	8 hours	40 hours	1.5x (8-12h), 2x (12h+)	Double time after 12 hours daily
Alberta	8 hours	44 hours	1.5x	Daily overtime also exceeds weekly
Saskatchewan	None	40 hours	1.5x	Some sectors have an 8-hour daily
Manitoba	None	40 hours	1.5x	Flexible averaging agreements allowed
Ontario	None	44 hours	1.5x	No daily overtime provisions
Quebec	None	40 hours	1.5x	Refusal rights after 50 hours
New Brunswick	None	44 hours	1.5x minimum wage	Minimum $22.13/hour overtime
Nova Scotia	None	48 hours	1.5x	Highest weekly threshold
PEI	None	48 hours	1.5x	Tied for the highest threshold
Newfoundland	None	40 hours	1.5x minimum wage	Minimum $22.50/hour overtime
Yukon	8 hours	40 hours	1.5x	Follows federal-style rules
Northwest Territories	8 hours	40 hours	1.5x	Daily and weekly calculations
Nunavut	8 hours	40 hours	1.5x	Matches other territories

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 to Calculate Overtime Pay in Canada

The basic overtime calculation formula is: Overtime Pay = Regular Rate of Pay × Overtime Multiplier × Overtime Hours.

• Your regular rate of pay is your normal hourly rate
• The overtime multiplier is 1.5 for time-and-a-half (or 2.0 for double-time in British Columbia after 12 hours)
• Overtime hours are the hours worked beyond your jurisdiction’s threshold.

Since these thresholds and specific rules differ, the calculators provided below can help you determine the precise overtime amount you are owed based on your province or territory’s specific employment standards.

Calculating Overtime for Hourly Employees

Hourly employees calculate overtime by first determining which hours exceed their provincial threshold. 

For example, take an Ontario worker earning $28 per hour who works 50 hours in one week. 

• Regular pay covers the first 44 hours: 44 × $28 = $1,232. 
• The remaining 6 hours qualify for overtime at time-and-a-half: $28 × 1.5 = $42 per overtime hour.
• Total overtime pay equals 6 hours × $42 = $252. 
• Combined with regular wages, this employee receives $1,484 for the week.

The calculation remains straightforward regardless of when overtime hours occur.

Calculating Overtime for Salaried Employees

Salaried employees must first convert their annual salary to an hourly rate before calculating overtime. 

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

• Divide by 52 weeks: $65,000 ÷ 52 = $1,250 weekly. 
• Divide by standard hours: $1,250 ÷ 40 = $31.25 hourly.

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. 
• Additional compensation: 7 × $46.88 = $328.16. 
• Their total weekly pay becomes $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) = $660 + $468 = $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?

Working on a statutory holiday in Canada entitles you to both holiday pay and a premium rate for the hours you work. For most employees, this effectively means earning 2.5 times their regular pay for the day.

The calculation is straightforward; you receive your regular day’s pay for the holiday itself, plus time-and-a-half for every hour you are on the job.

For example, an Ontario retail worker earning $20 hourly who works 8 hours on Canada Day receives their regular day’s pay ($160) plus time-and-a-half for hours worked ($20 × 1.5 × 8 = $240), totalling $400 for the day.

Calculation methods vary provincially. Some provinces mandate double-time-and-a-half or even triple time for holiday work. Others offer the choice between premium pay or a substitute day off with regular pay. Federal jurisdiction generally provides 1.5× regular rate plus another day off with pay.

How Does Overtime Banking and Time Off in Lieu Work in Canada?

Overtime banking, 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. 
• Manitoba’s rules depend on whether you’re salaried or hourly, with different conversion rates applying.

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

Navigating Canada’s overtime landscape is a challenge for both employers and employees.

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