Note: A 2026 update to these benchmarks is available. Please contact your Summit advisor to access the latest PEPM ranges and payroll thresholds.

Updated: Nov 27, 2025

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Illustrative employer monthly budget by enrolled headcount

Notes: Examples reflect employer share only; multiply the PEPM bands below by enrolled headcount to estimate monthly spend. Excludes retirement programs, PTO, and workers’ compensation premiums.

Introduction

By Summit Employee Benefits Team — Canada (excluding Quebec) — Updated November 27, 2025.

This page provides a 2025, carrier‑agnostic PEPM benchmark for employer‑sponsored group benefits in Canada (excluding Quebec), plus the statutory payroll items you should model alongside premiums. The $80–$350 PEPM band below reflects commonly purchased “core” plans (extended health, dental, basic life/AD&D, disability), assuming typical small–mid market designs and employer cost‑sharing. It excludes retirement programs, paid time off, and workers’ compensation premiums.

2025 PEPM range at a glance

Notes

• PEPM shown is the employer’s share after employee contributions (if any). Actual costs vary by demographics, industry risk, claims, funding method (fully‑insured vs. ASO), pooling levels, and geography. Independent market data points indicating similar magnitudes: Canada employer benefits commonly total 15–30% of payroll with health/dental often $3k–$5k per employee annually, though broader totals include items beyond core insurance. See industry snapshots from Canada’s benefits press and brokers for context from KASE Insurance, Benefluent, and Conference Board citations summarized by CPABC.

• Aggregated Canadian carrier results show health/dental spend continues to trend upward; CLHIA reports record health claims paid industry‑wide in 2023–2024, underscoring inflationary pressure on renewals.

What drives your PEPM in 2025

• Plan design intensity: drug cap and formulary, paramedical limits, dental major/ortho, LTD benefit formula, pooling/stop‑loss attachment points.

• Demographics: age/gender mix, family vs. single enrolment, occupation (white/blue collar), province of work.

• Funding model: fully insured vs. ASO with stop‑loss; ASO shifts volatility but does not eliminate trend.

• Employer/employee cost‑sharing: contribution policy for single vs. family tiers; taxable vs. non‑taxable benefit structure.

• Claims and trend: prior loss ratio, specialty drug utilization, paramedical usage, dental fee guide increases.

• Administration and add‑ons: EAP/virtual care, wellness credits, HSAs/WSAs.

Typical 2025 component ranges (employer share)

• Extended health (incl. drugs, paramedicals, emergency travel): $40–$180 PEPM.

• Dental (preventive/basic; add $15–$40 PEPM for major; orthodontics priced case‑by‑case): $25–$120 PEPM.

• Life/AD&D (basic 1x salary or flat $25–$50k): $3–$12 PEPM; Critical Illness (if added): highly age/amount dependent.

• Disability: STD $8–$18 PEPM (if insured); LTD $12–$40 PEPM (occupation and elimination period sensitive).

• Vision rider: $2–$10 PEPM.

• EAP/virtual care bundles: $2–$8 PEPM.

• HSA top‑ups (employer‑funded, not an insurance premium): budget‑driven; commonly $10–$50 PEPM equivalent based on annual allocation.

Context sources for spend and trend include CLHIA’s reporting and other market roundups from KASE and Benefluent.

2025 payroll items to model alongside benefits

These do not determine premiums but are part of total employment cost and, in some provinces, may apply to remuneration definitions that include certain taxable benefits. Always confirm with your payroll advisor; definitions differ by jurisdiction.

Federal (outside Quebec)

• Canada Pension Plan (CPP) enhancement: YMPE $71,300; YAMPE $81,200. Employer CPP rate 5.95% up to YMPE (max $4,034.10) plus CPP2 4.00% on earnings between YMPE and YAMPE (max $396.00).

• Employment Insurance (EI) outside Quebec: 2025 MIE $65,700; employee premium $1.64 per $100; employer multiple 1.4× (i.e., $2.296 per $100), with maximum annual employer contribution ~$1,508.47.

Provincial payroll taxes (examples; outside Quebec)

• British Columbia Employer Health Tax (EHT): no tax ≤ $1,000,000 payroll; “notch” formula between $1,000,000.01–$1,500,000 (5.85% × amount over $1,000,000); 1.95% on all payroll > $1,500,000.

• Ontario Employer Health Tax (EHT): general exemption $1,000,000 for eligible employers; graduated rates up to 1.95% (rate schedule applies based on total Ontario remuneration before exemption).

• Manitoba Health and Post‑Secondary Education Tax Levy: exempt ≤ $2.25M; 4.3% on amount over $2.25M up to $4.5M; 2.15% on total payroll > $4.5M.

• Newfoundland & Labrador Health and Post‑Secondary Education Tax: 2% on annual remuneration above a $2,000,000 exemption threshold.

• Territories note: NWT/Nunavut levy a 2% payroll tax paid by employees (employers must withhold and remit), separate from employer EHT regimes.

Important

• Provincial EHT bases use “remuneration” definitions that generally include taxable benefits; treatment of employer‑paid health/dental premiums varies. Confirm inclusions in each province’s legislation and with your payroll provider.

How to estimate your 2025 PEPM in 7 steps

1) Define your plan scope: health (drug formulary, out‑of‑country, paramedicals), dental (basic/major/ortho), basic life/AD&D, STD/LTD, EAP/virtual care, HSA. 2) Choose a funding model: fully insured vs. ASO with stop‑loss; set pooling/attachment points for high‑cost drugs. 3) Set eligibility and cost‑sharing: full‑time threshold, waiting period, single vs. family tiers, employer % contribution. 4) Gather census: DOB, gender, province, occupation class, salary (for life/LTD), coverage tier. 5) Price the plan: obtain multi‑carrier quotes via an independent broker; ask for at least two plan design variants (lean and broad) to view sensitivity. 6) Model payroll overlays: add employer CPP/EI and applicable EHT; include administration fees and advisors’ remuneration where applicable. 7) Finalize budget range: translate to PEPM by enrolment tier; maintain a 10–15% variance buffer for first‑year claims volatility and mid‑year adds.

FAQs

• What exactly is included in the $80–$350 PEPM band? Core insured benefits only: extended health, dental, basic life/AD&D, and disability, with typical employer cost‑sharing. It excludes retirement programs, PTO, and workers’ compensation premiums.

• Why exclude Quebec? Summit’s benefits brokerage and this benchmark focus on Canada outside Quebec. Quebec has distinct statutory programs (QPP/QPIP) and plan requirements that change pricing dynamics; we do not operate there.

• Fully insured vs. ASO — which is cheaper in 2025? Pricing depends on your claims volatility and stop‑loss terms. ASO can lower insurer margin/fees but introduces fluctuation risk; stop‑loss protects against catastrophic claims. Net PEPM can be similar over a multi‑year horizon for like‑for‑like designs.

• How big are 2025 renewal increases? Trend varies by line. Industry data show elevated growth in health claims (notably drugs and paramedicals), implying mid‑single‑digit to low‑double‑digit renewals depending on loss experience and pooling. See CLHIA’s rising health claim totals for context.

• Do employer‑paid benefits affect CPP/EI? CPP/EI apply to pensionable/insurable earnings; most employer‑paid health/dental premiums are not a taxable benefit to employees, but some benefits (e.g., group‑term life premiums) are. Always confirm payroll inclusion rules before remitting.

• How do provincial EHTs interact with benefits? EHT is assessed on remuneration as defined by each province. Taxable benefits are generally included; specifics vary by jurisdiction.

• What census size gets the best rate? Larger groups with credible claims experience, stable demographics, and coordinated drug management typically command better PEPM.

• How often should we market our plan? Annually at renewal for benchmarking; more frequently if loss ratios or service issues warrant. Preserve continuity for pooling/experience credibility when possible.

Sources

• Canada EI 2025 MIE and premiums: ESDC sources and actuarial summaries.

• CPP 2025 YMPE/YAMPE and contribution rates: CRA announcements and ESDC CPP tables.

• Provincial payroll tax examples: information available from respective provincial finance resources.

• Industry context on health spend trajectory: CLHIA Facts 2024 and Benefits Canada coverage.