Ontario hikes minimum wage. But is it enough for a newcomer?

Several Canadian provinces, including Ontario and Saskatchewan, have increased their legal minimum hourly wages as of October 1. In Ontario, the minimum wage is now $17.20 per hour, leading to an average annual net income of approximately $29,026 ...

By ET Online | Oct 03, 2024, 10.53 AM IST

Ontario, Prince Edward Island, Manitoba, and Saskatchewan have all increased the legal minimum hourly wage paid to workers as of October 1.

Most increases are gradual and linked to inflation rates. For instance, in Ontario, the minimum example has risen from $16.55 per hour to $17.20.

As per a report by CIC News, the average income of a person making minimum wage generally depends on the number of hours they work each week.

“Statistics Canada data for 2023 shows that the average actual hours per week worked by a full-time employee in Ontario is 39.3. Assuming these are all paid hours (not accounting for unpaid breaks), this means that before tax and other deductions, employees making minimum wage can expect to gross $675.96 each week.”

In Ontario, most employers pay their employees biweekly, meaning that a full-time wage worker typically earns around $1,351.92 per paycheck. Part-time workers, however, will earn significantly less.

When this is calculated over 26 pay periods per year (52 weeks divided by 2), minimum wage employees can anticipate an average gross annual income of about $35,149.92, says the CIC News report.

However, according to Weathsimple’s income tax calculator, an employee in Ontario with that average annual salary will net (take home) $29,026 (assuming they have no other income, investments or an RRSP), it adds.

So, is it possible to live on a full-time minimum wage job in Ontario? This question is particularly important for many newcomers, especially those who arrive without a job offer and need to secure work quickly to support themselves or, in some cases, require proof of income to secure housing.

Cost of living for newcomers in Ontario

According to the 2021 Census, immigrants make up 46.6% of Toronto's population, making it the city with the highest number of newcomers in Canada. Many newcomers tend to rent initially while saving to purchase a home.

A comparison of various sources done by CIC News provides an overview of the cost of living for a single person living alone in Toronto, noting that other areas in Ontario and Canada may be more affordable.

Average rent for a one-bedroom apartment: $2,452 as of September 2024 (TRREB)
Monthly cost of groceries for one person: $526.50 (numbeo.com)
Utilities (Electricity, Heating, Cooling, Water): $160.44 (numbeo.com)
Phone Plan: $56.20 (numbeo.com)
Internet: $69.70 (numbeo.com)
Public transport: $3.30 per trip or $143 for a monthly adult TTC pass (ttc.ca)

This indicates that the average monthly cost of essentials for a single person living alone in Toronto is approximately $3,407.84, totaling about $40,894.08 per year. This amount exceeds the gross average annual income of a minimum wage worker by over $5,000 and is more than $11,000 above their net average annual earnings.

There are strategies to lower these expenses, such as opting for shared housing, taking advantage of grocery sales, choosing the most affordable phone or internet plans, and walking instead of using public transit or rideshares.

How much should you be earning to be eligible for a work visa?

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The salary threshold for foreign workers varies significantly across different countries, reflecting each nation's economic conditions, labor market needs, and immigration policies. Here are some salary thresholds for foreign workers in various countries.

Note: These thresholds are subject to change based on economic conditions, policy updates, and labor market needs.