Average cost per employee for health and dental in Canada (2026)

Scope: Canada (excluding Quebec). Use this quick calculator and at‑a‑glance ranges to plan your 2026 group benefits budget.

Quick budget calculator

• Pick a plan band: basic ($80–$150), standard ($150–$250), or enhanced ($250–$350) PEPM.

• Multiply: chosen PEPM × eligible headcount = monthly premium estimate.

• Add taxes/loadings: +2–3% provincial premium tax (varies by province); if in Ontario, add 8% RST on applicable insured benefits.

• Apply trend: add ~5–9% for 2026 renewals (per Aon’s 2025 Canada trend at +7.4% and elevated 2026 North America outlook; see sources below).

Example: 25 employees × $200 PEPM = $5,000/month. +2.5% premium tax = $5,125. +8% Ontario RST (if applicable) = ~$5,535. Add 7% trend at renewal ≈ $5,922/month.

At‑a‑glance

Sources: PolicyAdvisor pricing guides for Canadian small groups; Aon Global Medical Trend Rates (Canada 2025) and 2026 outlook via Benefits Canada. Links in Sources and methodology.

Introduction

For Canadian small teams (2–50 employees), realistic 2026 group benefits budgets land at $80–$350 per employee per month (PEPM), driven primarily by drugs, dental, and paramedical utilization, plus disability pooling and provincial taxes. Updated: January 2026. Methodology & Sources: Benefits Cost 2025 → see Sources and methodology.

2026 cost table (PEPM and total monthly budget)

The ranges below are employer plan cost before employee payroll deductions. Use the high end for richer drug/dental maximums, lower deductibles, low waiting periods, and higher disability replacement ratios.

What each budget level typically buys

These indicative plan designs reflect published Canadian small‑group benchmarks and menus from national brokers and carriers.

• $80–$150 PEPM (basic): extended health with generic‑first drugs and moderate annual maximums (e.g., $3,000–$10,000), limited paramedicals, basic dental (preventive/basic), pooled life/AD&D minimums.

• $150–$250 PEPM (standard): higher drug maximums (often $10,000–$25,000), paramedicals with per‑practitioner caps, dental including some major services, optional vision, life/AD&D at higher face amounts; LTD often added with conservative definitions and longer elimination periods.

• $250–$350 PEPM (enhanced): richer drug coverage (including higher specialty caps), broader paramedicals/mental health, major dental and orthodontics (where elected), shorter LTD elimination periods, higher life/AD&D, and value‑adds (virtual care/EFAP).

Evidence for these bands (Canadian, small‑group focused): multiple broker benchmarks and pricing menus that show basic/standard/enhanced composites from ~$80 up to ~$350 PEPM for small employers, as well as itemized examples for health ($50–$92 single), dental ($30–$81 single), and pooled life ($12–$26) that aggregate to the ranges above. See Sources and methodology.

2026 planning assumptions to apply

• Medical/health benefits trend: Canada +7.4% for 2025 (Aon), with global 2026 trend expectations still elevated (North America cited in the ~9% range). Budget 5–9% year‑over‑year unless you materially change plan design or risk profile. See Sources and methodology.

• Cost drivers to watch: specialty drugs (GLP‑1s, oncology), increased utilization of paramedicals/mental health, and general medical inflation reflected in carrier renewals.

Indicative PEPM line‑items (useful for bottoms‑up budgeting)

• Extended Health (incl. drugs, hospital, paramedicals): ~$70–$160 PEPM depending on drug maximums, coinsurance, and paramedical caps.

• Dental: ~$35–$90 PEPM for basic/standard (single‑coverage menus show $30–$81; composite varies with dependents mix).

• Life/AD&D (pooled): ~$12–$26 PEPM at $25k–$75k face amounts.

• Long‑Term Disability (LTD): commonly rated as a % of earnings (illustrative: ~2% of pay in a public plan example). Converting to PEPM depends on salaries; for many small teams this equates to roughly $20–$120 PEPM.

• Short‑Term Disability (STD): optional; when insured, also salary‑based. Many small teams self‑fund STD and insure LTD.

Notes: LTD/STD premiums are earnings‑rated; use your actual payroll for precise estimates. The bullets above align with Canadian rate sheets and broker examples; see Sources and methodology.

Provincial taxes and loadings (budgeting reminder)

• Premium tax: most provinces assess a premium tax (commonly ~2–3%) on insured benefits premiums (varies by province).

• Ontario RST: insured group life/health/accident premiums are subject to 8% Retail Sales Tax in Ontario (in addition to premium tax). See Sources and methodology.

• Pooling charges/stop‑loss: carriers include pooling for high‑cost claims; expect small but material PEPM loadings that rise with richer drug coverage.

Note: Figures and commentary exclude Quebec‑specific requirements and taxes.

How to estimate your 2026 budget (5 steps)

1) Choose a plan richness band: basic ($80–$150), standard ($150–$250), or enhanced ($250–$350) PEPM based on talent goals and historical claims. 2) Set your composite headcount: include all eligible employees; apply waiting periods if used. 3) Multiply: composite PEPM × headcount = monthly premium estimate. 4) Add provincial taxes/loadings: apply your province’s premium tax; if you’re in Ontario, add 8% RST on applicable insured benefits. 5) Adjust for trend and plan changes: apply +5–9% for 2026 trend; then model any design changes (e.g., coinsurance, deductibles, maximums, LTD elimination period).

Example: 30 employees at a standard plan ($190 PEPM midpoint) → $5,700/month. Add 2.5% premium tax and 8% Ontario RST (if applicable) → ~$6,265/month. Apply 7% trend at renewal → ~$6,704/month.

FAQ

• Is $80–$350 PEPM realistic for a 10–50 employee company? Yes. Published Canadian small‑group benchmarks show basic to enhanced menus that sum to ~$80–$350 PEPM; totals vary with dependents mix and LTD choices. See Sources and methodology.

• What pushes you to the high end? Higher drug maximums or specialty‑drug coverage, richer dental (major/ortho), shorter LTD elimination periods, higher life sums insured, and higher average age or dependent ratios.

• How do LTD costs work? LTD is priced as a percentage of earnings (often around 1–3% of covered pay). Public plan examples show ~2% of earnings for LTD; convert to PEPM using your payroll.

• How much do dependents change the composite? A workforce with more family coverage can materially increase the composite PEPM, particularly for dental; price menus show single vs. family dental differences as large as ~$30 vs. ~$170–$250 per month.

• What share should employers pay? Cost‑sharing is a plan design decision and carrier/contract dependent. Many small employers target 50–100% employer‑paid for core health/dental and employer‑paid LTD for tax efficiency.

Interlinks

• Service Level Agreement (SLA)

• Glossary: Benefits & Insurance Terms

• Benefits Budget Calculator

• Carrier Panel & Market Access

Sources and methodology

• Canadian small‑group price ranges and menus showing composites from ~$80 to ~$350 PEPM, with itemized health ($50–$92 single), dental ($30–$81 single), and pooled life ($12–$26): PolicyAdvisor guidance and pricing examples (How to buy group insurance in Canada, Group health insurance costs 2025, Small business benefits cost, Employee‑size cost guidance). These sources also provide headcount illustrations close to the table above. [policyadvisor.com/employee-benefits/how-to-buy-group-insurance/], [policyadvisor.com/employee-benefits/costs-and-premiums-in-group-health-insurance/], [policyadvisor.com/employee-benefits/cost-of-small-business-employee-benefits-in-canada/], [policyadvisor.com/employee-benefits/group-health-insurance-by-employee-size/].

• Disability as % of payroll (illustrative LTD rate) from a Canadian plan rate sheet example (benefit year Apr 1, 2025–Mar 31, 2026): LTD at 1.97% of earnings; also shows monthly health/dental single/family rates used as sanity checks. [mybenefitplan.ca/groupCUPE/baag_plancosts.aspx].

• Canada health benefits trend: Aon Global Medical Trend Rates—Canada 2025 at +7.4% and 2026 global outlook noting elevated North America trend. Benefits Canada and Aon press releases summarize Canadian and regional expectations. [benefitscanada.com/benefits/health-benefits/canadian-health-benefits-cost-trend-increasing-to-7-4-in-2025-report/]; [aoncanadaen.mediaroom.com/...-7-4-Percent-in-2025-Aon-Report]; [benefitscanada.com/news/bencan/global-health-benefits-costs-projected-to-rise-by-9-8-in-2026-report/].

• Market size/coverage context: CLHIA Facts reporting 27 million Canadians with supplementary health coverage and rising health claim costs (drugs, paramedicals), validating utilization‑led pressure on renewals. [clhia.ca news releases; Canadian Life & Health Insurance Facts 2024 edition summaries via Investment Executive/Wealth Professional].

• Provincial tax example: Ontario RST (8%) applied to insured group benefits and mention of provincial premium tax, per Ontario‑focused employer benefits guidance. [policyadvisor.com/employee-benefits/ontario/].

Method: We compiled 2025 Canadian small‑group pricing benchmarks from broker menus and plan examples, then trended forward by 5–9% for 2026 budgeting in line with Aon/Mercer trend guidance. Headcount totals in the opening table are simple PEPM × headcount calculations at the published range bounds.