Ontario Overtime Pay: The 44-Hour Rule, 1.5× Rate, and a 50-Hour Week Example

Ontario's Employment Standards Act 2000 sets the overtime threshold for most employees (over 18 years old) at:

• 44 hours in a workweek. Hours above 44 must be paid at 1.5 times the employee's regular rate of pay.
• The threshold applies per workweek, not per day and not per pay period. The employer defines the workweek (for example Monday to Sunday), and overtime is assessed inside that window each week.
• Overtime applies to all employees covered by Part VII of the ESA — there is no exemption for salaried staff: if you are paid a fixed salary covering more than 44 hours, your effective hourly rate is checked against minimum wage and overtime rules still apply.
• Employees under 18 have additional daily hour limits, but the 44-hour overtime threshold still governs extra pay.

The regular rate for overtime purposes is the hourly wage corresponding to the employee's fixed salary:

• Hourly employees: the agreed hourly wage.
• Salaried employees: annual salary ÷ 52 ÷ hours in the workweek (for example $65,000 over a 44-hour week = $28.41/hour), or annual salary ÷ the number of hours in the work period under an averaging agreement.
• Piece-rate or commission: the greater of the piece/commission rate converted to an hourly equivalent or minimum wage, with overtime paid on the excess hours at 1.5× that rate.
• Vacation pay, public holiday pay, and other statutory payments do not count toward the 44-hour calculation when paid separately.

An Ontario employee working 50 hours in one week at $25.00/hour:

The six overtime hours generate $225 of extra gross pay — and because CPP, EI, and withholding tax apply to the whole cheque, about $326 of the $1,325 goes to deductions (24.6% on the week), leaving roughly $998.91 in the bank.

Overtime is paid in the normal pay cycle for the week it was worked — employers cannot defer it to an annual bonus or bank it without a written time-off-in-lieu agreement.

Overtime dollars are not taxed at a special rate — they are added to your income and withheld through your employer's payroll calculations:

• CPP (Canada Pension Plan): 5.95% employee contribution on pensionable earnings up to the annual maximum (subject to annual adjustment). Overtime pay counts as pensionable earnings.
• EI (Employment Insurance): 1.66% employee premium on insurable earnings up to the annual maximum insurable earnings (annual adjustment applies).
• Federal and provincial tax: withheld using the TD1/TD1ON personal tax credits and your pay frequency — a week with unusually high earnings is smoothed automatically by the payroll software under CRA's payroll deduction methods, so a single overtime-heavy week does not jump to a top bracket on its own.
• Ontario Employer Health Tax (EHT) and employer CPP/EI portions are employer costs, not payroll deductions from your cheque.

The ESA provides two flexibility mechanisms — both require paperwork:

1. 1Time off in lieu (s. 22.1): Instead of overtime pay, an employer and employee may agree in writing that the employee takes 1.5 hours of paid time off for each overtime hour worked. The time off must be taken within 12 months or paid out at the regular rate (note: the time-off rate is the regular rate, not 1.5×).

1. 2Overtime averaging agreements (s. 22.2): A written agreement (that meets ESA notice requirements) can average hours over a week or longer work period — so a 50-hour week followed by a 38-hour week can average to 44 hours per week with no overtime owed. Individual averaging agreements must be in writing before the work is performed.

Without one of these written agreements, overtime is assessed week by week: 50 hours in week one cannot be offset by 34 hours in week two.

North America has three different overtime philosophies:

Practical consequences for Ontario workers:

• A 46-hour week in Ontario pays 2 overtime hours, while the same week in Texas pays 6.
• Ontario's higher threshold means weekly take-home on moderate overtime is lower than in US 40-hour states — but Ontario employees receive 9 statutory public holidays with holiday pay, and no US-style variable state income tax lottery.
• Daily long shifts (10–12 hours) earn no overtime premium in Ontario unless the weekly total crosses 44.

Common questions about Ontario overtime rules: