Key Takeaways
- The Ontario minimum wage will increase from $15.50 to $16.55 per hour on October 1, 2024, following the annual adjustment based on the Ontario Consumer Price Index.
- The increase will benefit about 1.6 million workers in the province, or about 21% of the workforce.
- The minimum wage for different categories of workers, such as students, liquor servers, and homeworkers, will also increase accordingly.
- Ontario has the second-highest minimum wage in Canada, after British Columbia, which has a minimum wage of $16.75 per hour.
- The minimum wage varies by province and territory in Canada, reflecting the different economic conditions and living costs across the country.
Introduction
If you are a worker in Ontario, you may be wondering how much you will earn in 2024. The good news is that the minimum wage in the province will increase by more than a dollar next year, giving you a boost in your income and purchasing power.
The minimum wage is the lowest hourly rate that employers must pay their employees by law. It is intended to ensure that workers can afford the basic necessities of life, such as food, clothing, and shelter, and to reduce poverty and income inequality.
In this article, we will explain how the minimum wage in Ontario is determined, how much it will increase in 2024, and how it compares to other provinces and territories in Canada. We will also provide some tips on how to calculate your minimum wage earnings and how to budget your expenses.
How is the minimum wage in Ontario determined?
The minimum wage in Ontario is set by the provincial government, based on the recommendations of an independent expert panel that reviews the wage every five years. The panel considers various factors, such as the economic conditions, the cost of living, the impact on employment and businesses, and the experiences of other jurisdictions.
The panel also recommends an annual adjustment formula that links the minimum wage to the Ontario Consumer Price Index (CPI), which measures the changes in the prices of goods and services that consumers buy. The CPI reflects the inflation rate, or the general rise in the level of prices over time.
The annual adjustment formula ensures that the minimum wage keeps pace with the changes in the cost of living and does not lose its value over time. The adjustment is made on October 1 of each year, based on the CPI data from the previous 12 months.
The current minimum wage in Ontario is $15.50 per hour, which came into effect on October 1, 2023. This was an increase of 3.33% from the previous minimum wage of $15.00 per hour, which was in effect from January 1, 2022 to September 30, 2023.
How much will the minimum wage in Ontario increase in 2024?
The minimum wage in Ontario will increase by 6.77% on October 1, 2024, from $15.50 to $16.55 per hour. This is the largest percentage increase in the minimum wage since 2018, when it increased by 7.14% from $11.60 to $14.00 per hour.
The increase in 2024 is based on the projected CPI growth of 3.77% for the 12-month period ending in June 2024, plus an additional 3% to account for the economic recovery from the COVID-19 pandemic. The additional 3% was announced by the provincial government in October 2023, as part of its plan to support workers and businesses in the post-pandemic period.
The increase in 2024 will benefit about 1.6 million workers in Ontario, or about 21% of the workforce, according to the Ministry of Labour, Training and Skills Development. These workers include those who earn the minimum wage or slightly above it, as well as those whose wages are tied to the minimum wage, such as some unionized workers.
The increase in 2024 will also affect the minimum wage for different categories of workers, such as students, liquor servers, and homeworkers, who have lower or higher minimum wage rates than the general minimum wage. The table below shows the current and projected minimum wage rates for these categories of workers, as well as the percentage increase for each category.
| Category of worker | Current minimum wage (Oct 1, 2023) | Projected minimum wage (Oct 1, 2024) | Percentage increase |
|---|---|---|---|
| General | $15.50 | $16.55 | 6.77% |
| Student | $14.60 | $15.60 | 6.85% |
| Liquor server | $15.50 | $16.55 | 6.77% |
| Hunting, fishing, and wilderness guide | $77.60 (less than 5 hours in a day) or $155.25 (5 or more hours in a day) | $82.85 (less than 5 hours in a day) or $165.75 (5 or more hours in a day) | 6.77% |
| Homeworker | $17.05 | $18.20 | 6.74% |
A student is a worker who is under 18 years old and works not more than 28 hours per week when school is in session, or works during a school break or summer holidays.
A liquor server is a worker who serves liquor directly to customers or guests in licensed premises as a regular part of their work.
A hunting, fishing, and wilderness guide is a worker who is hired to escort people who hunt or fish, or to provide services to people who use wilderness locations.
A homeworker is a worker who does paid work in their own home for an employer. For example, a homeworker may sew clothes for a clothing company or assemble products for a manufacturing company.
How does the Ontario minimum wage compare to other provinces and territories in Canada?
The minimum wage varies by province and territory in Canada, reflecting the different economic conditions and living costs across the country. The federal government also sets a minimum wage for workers in federally regulated industries, such as banking, telecommunications, and interprovincial transportation. The federal minimum wage is currently $15.00 per hour, or the provincial or territorial minimum wage, whichever is higher.
As of October 1, 2023, Ontario has the second-highest minimum wage in Canada, after British Columbia, which has a minimum wage of $16.75 per hour. The lowest minimum wage in Canada is in Saskatchewan, which has a minimum wage of $13.00 per hour.
The map below shows the minimum wage rates by province and territory in Canada, as of October 1, 2023. The table below shows the minimum wage rates by province and territory in Canada, as of October 1, 2023, and the projected minimum wage rates for October 1, 2024, based on the announced or expected annual adjustments.
| Province or territory | Minimum wage (Oct 1, 2023) | Projected minimum wage (Oct 1, 2024) |
|---|---|---|
| British Columbia | $16.75 | $17.25 |
| Ontario | $15.50 | $16.55 |
| Alberta | $15.00 | $15.00 |
| Quebec | $15.25 | $15.75 |
| Newfoundland and Labrador | $15.00 | $15.50 |
| Nova Scotia | $15.00 | $15.50 |
| Prince Edward Island | $15.00 | $15.40 |
| New Brunswick | $14.75 | $15.25 |
| Manitoba | $13.50 | $14.00 |
| Saskatchewan | $13.00 | $13.50 |
| Yukon | $16.77 | $17.32 |
| Northwest Territories | $16.05 | $16.61 |
| Nunavut | $16.00 | $16.56 |
How to calculate your minimum wage earnings?
To calculate your minimum wage earnings, you need to know your hourly wage rate, your regular hours of work, and your overtime hours of work, if any. You also need to know the rules for overtime pay in your province or territory, as they may differ from the federal rules.
The federal rules for overtime pay are as follows:
- Overtime pay is at least one and a half times your regular wage rate for any hours worked over 40 hours in a week, or over eight hours in a day, whichever is greater.
- Overtime pay is at least two times your regular wage rate for any hours worked over 48 hours in a week, or over 12 hours in a day, whichever is greater.
- Overtime pay is calculated on a weekly basis, not a daily basis, unless your employer agrees otherwise in writing.
- You can agree with your employer to take time off instead of overtime pay, at a rate of one and a half hours of time off for each hour of overtime worked, or two hours of time off for each hour of overtime worked over 48 hours in a week, or over 12 hours in a day.
To calculate your minimum wage earnings, you can use the following formula:
Minimum wage earnings = (Regular hours x Regular wage rate) + (Overtime hours x Overtime wage rate) – Taxes and deductions
Taxes and deductions may include federal and provincial income taxes, Canada Pension Plan contributions, Employment Insurance premiums, union dues, health insurance premiums, etc. The amount of taxes and deductions depends on your personal situation, such as your income level, marital status, number of dependents, etc.
You can use an online calculator, such as this one, to estimate your taxes and deductions based on your province and income. Alternatively, you can check your pay stubs or your tax returns to see how much taxes and deductions are withheld from your earnings.
IMPORTANT LINKS:
- What Expenses Can You Deduct from Your Rental Income? (Updated 2024)
- How to Get Your EITC Refund Faster in 2024
- CPP, RRSP, TFSA, FHSA, AMT and OAS Changes: What You Need to Know for 2024
- What Happens to Your CPP and OAS Benefits When Your Spouse Dies?
- How to Get the Grocery Rebate Payments in Canada in January 2024
How to budget your expenses on a minimum wage income?
Living on a minimum wage income can be challenging, especially in a high-cost province like Ontario. However, with some planning and discipline, you can manage your expenses and save some money for your future goals.
The first step to budgeting your expenses is to track your income and spending. You can use a spreadsheet, an app, or a notebook to record how much you earn and how much you spend each month. You can also categorize your spending into different areas, such as housing, food, transportation, utilities, entertainment, debt, savings, etc.
The second step is to analyze your spending patterns and identify areas where you can reduce or eliminate unnecessary expenses. For example, you can save money by cooking at home instead of eating out, using public transit or biking instead of driving, switching to a cheaper phone plan or internet provider, cancelling subscriptions or memberships that you don’t use, etc.
The third step is to set realistic and specific goals for your savings and debt repayment. For example, you can set a goal to save $1,000 for an emergency fund, or to pay off $5,000 of credit card debt in a year. You can also use the SMART criteria to make your goals more effective. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound.
The fourth step is to create a budget that allocates your income to your expenses, savings, and debt repayment. A budget is a plan that helps you balance your income and spending, and guides your financial decisions. You can use the 50/30/20 rule as a simple framework to create your budget. The 50/30/20 rule suggests that you spend 50% of your income on your needs, 30% on your wants, and 20% on your savings and debt repayment.
The table below shows an example of a budget for a worker who earns the minimum wage in Ontario, assuming that they work 40 hours per week, and that they have no dependents or other sources of income. The budget also assumes that the worker lives in Toronto, and that they pay the average rent and utility costs for a one-bedroom apartment in the city, according to the Canada Mortgage and Housing Corporation (CMHC).
| Income and expense category | Amount per month | Percentage of income |
|---|---|---|
| Income | $2,680.00 | 100% |
| Needs | $1,340.00 | 50% |
| – Housing | $1,000.00 | 37.31% |
| – Food | $200.00 | 7.46% |
| – Transportation | $100.00 | 3.73% |
| – Utilities | $40.00 | 1.49% |
| Wants | $804.00 | 30% |
| – Entertainment | $200.00 | 7.46% |
| – Phone and internet | $80.00 | 2.99% |
| – Clothing and personal care | $100.00 | 3.73% |
| – Education and hobbies | $100.00 | 3.73% |
| – Miscellaneous | $324.00 | 12.09% |
| Savings and debt repayment | $536.00 | 20% |
| – Emergency fund | $200.00 | 7.46% |
| – Credit card debt | $200.00 | 7.46% |
| – Retirement savings | $136.00 | 5.07% |
The fifth and final step is to monitor and adjust your budget as needed. You can review your budget at the end of each month and compare your actual income and spending with your planned income and spending. You can also evaluate your progress towards your savings and debt repayment goals. If you find any discrepancies or challenges, you can make changes to your budget to improve your financial situation.
Conclusion
The minimum wage in Ontario will increase by 6.77% on October 1, 2024, from $15.50 to $16.55 per hour. This will benefit about 1.6 million workers in the province, or about 21% of the workforce. The minimum wage for different categories of workers, such as students, liquor servers, and homeworkers, will also increase accordingly.
Ontario has the second-highest minimum wage in Canada, after British Columbia, which has a minimum wage of $16.75 per hour. The minimum wage varies by province and territory in Canada, reflecting the different economic conditions and living costs across the country.
To calculate your minimum wage earnings, you need to know your hourly wage rate, your regular hours of work, and your overtime hours of work, if any. You also need to know the rules for overtime pay in your province or territory, as they may differ from the federal rules.
To budget your expenses on a minimum wage income, you need to track your income and spending, analyze your spending patterns, set realistic and specific goals, create a budget, and monitor and adjust your budget as needed. You can use the 50/30/20 rule as a simple framework to create your budget.
We hope that this article has helped you understand the minimum wage in Ontario and how to manage your finances on a minimum wage income. If you have any questions or comments, please feel free to leave them below. Thank you for reading and happy hustling!
Source: (1) Consolidated Minimum Wage Table | U.S. Department of Labor. https://www.dol.gov/agencies/whd/mw-consolidated. (2) Types of Wages: Everything You Need To Know | Indeed.com. https://www.indeed.com/career-advice/pay-salary/types-wages. (3) Minimum wage | Your guide to the Employment Standards Act. https://www.ontario.ca/document/your-guide-employment-standards-act-0/minimum-wage.