Types of Employee Benefits in Canada: A Comprehensive Guide

Types of Employee Benefits in Canada: A Comprehensive Guide

Most working Canadians need more than just a paycheque as incentive to stay loyal and committed to their workplace. Especially nowadays with the new work-from-home model, incentive is everything in a workplace. Benefits significantly impact an employee’s job performance, satisfaction, and motivation. Employee benefits are designed to support employee’s overall well-being, both in and outside of the workplace. In Canada, many employers offer benefits as a way to attract and retain talented employees. In this article, we discuss the definition of employee benefits, the importance of them and the different types an employer may offer.

Table of Contents

Definition of Employee Benefits Benefits

Employee benefits are group health insurance plans that are provided by the employer to their employees as a means of making health care more affordable and accessible. These benefits are designed to supplement employees’ salaries and help them meet their basic, or complex depending on the plan, health needs, achieve work-life balance, and improve their access to preventative health care. Providing benefits packages for employees provides a competitive advantage for employers as they are able to attract and retain the best talent in the industry.

Importance of Employee Benefits for Employee Retention

Employee retention is a major concern in Canada. According to careerwise.ceric.ca, more than one-third of Canadian companies (35%) said employee retention plummeted during Covid; calling the reason “The Great Resignation”. While employee benefits were always considered a perk for those in the job market, due to the added health concerns of the pandemic, they are even more, and almost mandatory for people. In today’s competitive job market, providing attractive benefits products can set businesses apart from their competitors. Talented employees are in high demand and they are looking for employers who not only offer high salaries, but comprehensive benefits as well. By offering these benefits, businesses can show their employees that they are valued and invested in their well-being, which can lead to increased loyalty and retention.

Mandatory Benefits in Canada

Although employers in Canada are not legally obligated to provide group benefits products, they are required by law to offer certain benefits to their employees, including the Canada Pension Plan (CPP), Employment Insurance (EI), and Workers Compensation. These benefits are funded through mandatory contributions, which are deducted from employees’ pay cheques. This ensures that employees have access to critical social safety net programs that can provide financial support in the event of retirement, disability, job loss, or workplace injury. Employers have a responsibility to comply with these legal requirements and ensure that their employees are enrolled in these programs as mandated by law.

Canada Pension Plan (CPP)

Employment Insurance (EI)

Workers Compensation

Health and Wellness Benefits

Most employers in Canada care about the overall wellbeing of each of their employees, since employee work performance is better when their health is taken care of too. Employers offer extended health plans at an affordable cost in order to supplement the provincial health care plans so that each employee can show up to work in good health. Some examples of health and wellness benefits could be:

  • Preventative care programs
  • Mental health support
  • Fitness and wellness subsidies
  • Flexible work arrangements
  • Employee wellness programs
  • Health spending accounts
  • Maternity and paternity leave
  • Work-life balance initiatives

Extended Health Care Benefits

Extended Health Care Benefits are group benefits typically provided by a workplace in order to supplement the health care benefits provided by the province. Typically extended health benefits cover the cost of prescription drugs, paramedical services, vision care, hospital care, medical equipment and supplies, and out-of-province emergency medical services. Not all workplaces provide employee benefits, and it is possible for individuals to purchase their own extended health coverage. It’s important to note that specific coverage and benefits offered may vary depending on the plan selected. Employees should review their extended health care benefits carefully to understand what is covered and limitations and exclusions may apply.

Group Dental Plan

Group dental insurance accounts for covering the cost of dental procedures that are typically not covered by the provincial health care plan. Group dental insurance covers the policyholder and their dependants for certain dental services. The procedures that are typically included in the group dental plan are x-rays, dental exams, cleanings, scaling, polishing, fluoride, fillings, extractions, periodontal services, endodontic services that include root canal, dentures, bridges, crowns, inlays, onlays and wires. The coverage received depends on the coverage amount selected by the policyholder.

Vision Care

Vision care in Canada has become an increasingly important perk that employees expect in their group benefits products. In Canada, ensuring comprehensive healthcare coverage is essential, and one aspect that should not be overlooked is the importance of including eyecare in group benefits. Our eyes play a vital role in our daily lives, enabling us to navigate the world around us. Regular eye exams not only detect vision problems but can also uncover underlying health issues. By including eye care as part of group benefits, employers demonstrate a commitment to the well-being of their employees. Access to affordable vision care encourages early detection and treatment of eye conditions, improving overall eye health and potentially reducing long-term healthcare costs. Prioritizing eyecare in group benefits fosters a healthier and more productive workforce.

Disability Insurance

Disability insurance provides income replacement to an employee if they are unable to work due to illness or disability. Disability insurance will cover a percentage of the employee’s income up to a certain limit. There is a waiting plan that is between 30-180 days in order to receive compensation. The benefit duration varies based on the specific case. The employee must not be able to perform either a portion or all of the required tasks for their job in order to qualify. Disability insurance can either be short term or long term. A full, comprehensive explanation on how this specific type of insurance works can be found here.

Retirement Benefits

In Canada, most employers offer retirement benefits to their employees as an incentive to stay loyal to the company. Retirement benefits are a way each of us can look to the future, free of worry. Planning for retirement is a critical aspect of financial well-being in Canada. The three main components of retirement savings and benefits are RRSP’s, Pension Plans and Group Tax-Free Savings Accounts.  RRSP’s offer working Canadians a tax advantaged way to save for retirement, with options of both group and individual plans. Pension Plans provide retirement benefits to employees based on factors such as worked hours and years of service. Lastly, Group TFSA’s enable Canadians to save and invest money tax-free, with contribution limits and withdrawal rules. Understanding and utilizing these retirement vehicles can help individuals secure a comfortable future and make the most of their savings.

Registered Retirement Savings Plan (RRSP)

Pension Plans

Group Tax-Free Savings Account (TFSA)

Time-Off Benefits

Time off is inevitable with the flow of life. Sometimes time off is planned, other times it is a necessity based on life’s circumstances. Canadian employers are mandated by law to provide a certain number of paid days off. There are various time-off benefits that are embedded into the Canadian employment system.

Vacation and Paid Time Off

Sick Leave and Personal Days

Family and Medical Leave

Work-Life Balance Benefits

Work-life balance benefits have become increasingly more important to today’s workforce. They allow for workers to be more productive, more engaged, happier and less stressed. Increased productivity is also a major benefit for employers to ensure that they are investing in good work-life balance initiatives. Some examples of these types of benefits would be:

Tuition Reimbursement

Employee Discounts

Recognition Programs


Employee benefits are an important facet for a business to attract top talent. In addition to financial security, employees want to work for a company that looks out for their well-being. Employee benefits are important in attracting top talent in order to be distinguishable from your competitors, retaining top talent employees, and employer branding. Some factors for employers to consider when selecting employee benefits packages include budgeting, employee demographics, legal requirements, employee preference, communication and education. Employee benefits are a crucial component to a competitive employee package offered by a company. Employers can create a positive work environment that looks out for everyone’s well being.

As a trusted provider of group benefits in Canada, Group Enroll offers extensive coverage with tailored solutions. We make the application process simple and offer continued support to our policyholders. Group Enroll provides in-depth knowledge to make the selection process easy, helping businesses navigate the complexity of group insurance options.