Most years, payroll updates come quietly, an EI bump here, a CPP increase there. But 2026 is different. Ontario is introducing new employment laws and updated regulations that will reshape how businesses recruit, compensate, and manage their teams.
To stay compliant (and avoid costly mistakes), now is the time to prepare.
Below is a simple, human-friendly breakdown of what's changing, why it matters, and how you can get ready before January 1, 2026.
One of the biggest updates for 2026 isn't in the payroll tables—it's in recruitment transparency.
Starting January 1, 2026, employers with 25 or more employees must follow new rules when posting job openings. The goal: clear pay expectations, fair hiring practices, and fewer barriers for applicants.
Every job posting must now include:
✔ A compensation range
No more vague
"competitive salary." Employers must clearly state the
expected pay range.
✔ A maximum range width of $50,000
This
prevents overly broad or misleading salary bands.
✔ Whether the role is new or a replacement
Applicants must know if the posting is for an existing
vacancy or a newly created position.
✔ No requirement for Canadian work experience
Employers can no longer ask for specifically "Canadian"
experience—helping reduce barriers for newcomers.
✔ AI usage disclosure
If AI is used to
screen or assess applicants, it must be disclosed in the
posting.
These changes have a direct impact on payroll planning as well. Salary structures and wage scales will now need to be finalized earlier in the hiring process.
In addition to recruitment changes, CPP and EI will rise again in 2026.
While the final numbers are normally released late in the year, employers should prepare for:
CPP Updates
• A higher Yearly Maximum Pensionable Earnings (YMPE)
• Increased CPP contributions—for both employees and employers
• Ongoing adjustments related to CPP2, introduced during the enhancement phase
EI Updates
• A new maximum Insurable Earnings (MIE) level
• Possible contribution rate changes
• Higher employer payroll costs
Even small yearly increases add up—especially for businesses running weekly or bi-weekly payroll. Planning ahead now prevents year-end surprises.
Although the legislation focuses on job postings, its effects ripple into employment agreements.
You may need to revise your templates to include:
• Clear salary ranges aligned with posted job ads
• New clauses explaining the use of AI in recruitment
• Updated probation, compensation, and review language to support transparency
• Clear explanations of how CPP and EI changes may affect take-home pay
Why this matters:
If your job posting says one thing and your employment agreement says another, your business could face compliance and legal risks.
Last year, a mid-sized Ontario employer forgot to update CPP contributions after the annual adjustment. The result?
• Costly payroll corrections
• Reissued T4s
• Frustrated employees
• Hours of administrative cleanup
Payroll errors are rarely intentional; they usually come from missing one tiny detail—and in 2026, there are a lot of tiny details.
Before January 1, make sure your business:
• Reviews and updates all job posting templates
• Confirms approval processes for salary ranges
• Updates employment agreement templates
• Reviews payroll software settings for 2026 CPP & EI rates
• Trains HR and hiring managers on AI disclosure rules
• Conducts an internal compliance review
A few adjustments now can save headaches and unnecessary costs later.
Does the new job posting law apply to all
businesses?
No. It applies only to employers with 25 or more
employees.
Do internal job postings require salary disclosure?
If the posting is public, yes. Fully internal postings
may follow different rules.
What happens if I don't disclose AI usage?
Penalties are expected. Exact details are still being
finalized, but non-compliance will carry legal and financial
risks.
Are your job posting and employment agreement templates ready for 2026? Most businesses discover at least one compliance gap when they review their documents.
TandemBooks is here to help you stay compliant and prepared. Whether you need assistance with employment agreements, Specialty Bookkeeping, Law Firm Bookkeeping, Payroll Management, Consulting and Advisory, Business Start-Up, or Income Tax Preparation, our team can guide you through the transition.
The new regulations take effect soon. Contact TandemBooks today to get ready with confidence.
Contact us today to schedule your 2026 payroll preparation review!
