Pay transparency laws in Canada: Your 2026 employer guide

The old rules of hiring are officially dead. For generations, compensation was a secret, whispered about in hushed tones and negotiated behind closed doors. This created a system ripe for inequity, leaving talented people underpaid and businesses struggling to build real trust. That era is over. A new kind of change is sweeping across the country, and it’s called pay transparency.

This isn’t just another HR trend. It’s a fundamental shift in how we approach work and value. For small and medium-sized businesses — the engine of Canada’s economy — this is a massive opportunity. It’s your chance to lead, build a strong team and create a workplace where fairness is more than just a policy. This guide is your roadmap to navigating the new world of pay transparency laws in Canada and turning compliance into your competitive advantage.

The old way of hiring is over: What is pay transparency?

Pay transparency is open, honest communication about compensation. It’s about removing secrecy and giving candidates and employees clear information on what a role pays.

But let’s be clear: this is bigger than posting a number on a job ad. It’s a strategic decision to break down the systems that create pay gaps due to gender, race or other factors. It declares that fairness matters and shows your commitment to trust and respect from the first step.

For too long, candidates were left guessing their worth. Not only is this outdated, but it’s risky for business. When you’re upfront about compensation, you attract candidates who understand their value and are genuinely interested in the job. You stop wasting time on interviews that end in salary disappointment and start building a reputation as an employer who respects their people. This is the future of work and a powerful tool for attracting great talent.

Are you prepared? The current state of pay transparency laws in Canada

The push for pay transparency is gaining momentum. While there isn’t one single federal law for all private businesses in Canada, a growing number of provinces are taking action. Provincial governments are introducing legislation that makes pay transparency a legal requirement, not just a nice-to-have.

What does this mean for you? Staying ahead of these changes is good business sense. Waiting until a law is fully enforced where you operate is risky. The smartest employers are seeing the writing on the wall and acting before it’s too late.

This wave of legislation is your signal to get ready. By adopting transparent practices now, you’re preparing for future laws and setting your business up as a leader. You’re telling the world that you are forward-thinking and committed to equity, ready to bring in top talent who will build your business.

The province-by-province breakdown of pay transparency requirements

Rules for pay transparency laws in Canada can change depending on your location. Here’s a breakdown of active and upcoming laws across the country.

British Columbia: What you need to know now

British Columbia leads the way with its Pay Transparency Act, effective since November 2023. If you operate in B.C., these rules count now.

Key requirements include:

• Salary ranges on job postings: You must include expected pay or a salary range on all public job ads.
• Ban on pay history questions: You can’t ask candidates about their previous salary. This helps stop cycles of underpayment.
• Phased reporting: You will soon need to prepare and post pay transparency reports. This is being rolled out based on employee count:
  • November 2025: Employers with 300 or more employees
  • November 2026: Employers with 50 or more employees

These reports highlight pay gaps for specific groups, showing clearly where action is needed.

Ontario: Are the changes finally coming?

Ontario passed its Pay Transparency Act in 2018, but it never went into force. That’s all about to change. The government is set to kick things into gear come the new year, so employers should get ready as these rules take effect on January 1, 2026. 

When activated as planned, the rules include:

• Salary range included on every public job ad
• Ban on asking about pay history
• Rules against penalizing employees for discussing pay
• Reporting requirements for larger organizations to help close gender-based pay gaps

For Ontario employers, the message is simple: don’t wait. The stage is set. This shift is already taking place.

Newfoundland and Labrador and PEI

Other provinces are stepping up. In late 2022, both Newfoundland and Labrador and Prince Edward Island passed new pay transparency laws.

• Newfoundland and Labrador: Public job ads must show a salary range, and employers can’t ask about pay history
• Prince Edward Island: All public job ads must include pay ranges

These updates point to a clear national theme. Transparency is the new normal across Canada.

Other provinces and territories

Other regions, like Alberta, Saskatchewan, Yukon, Northwest Territories, Nunavut and Québec, may not yet have specific laws, but the trend is obvious. The desire for fair, open compensation is a cultural shift, not just a legal one.

If you operate in these places, get ahead now. Develop your compensation strategy and bring in transparent pay practices today. You’ll be more competitive and ready when the law eventually catches up.

Federal pay transparency and employment equity

Pay transparency is not new for federally regulated employers. Under the Employment Equity Act, private employers with at least 100 employees must already report on pay gaps.

This includes collecting and submitting data about wages, bonuses and overtime, grouped by gender and other protected groups. The purpose? To shine a light on representation and compensation across your team. This data is published and puts your business in the spotlight.

This federal rule is different from provincial laws, which focus more on salary in job postings. But the main goal is the same: to root out pay discrimination.

The risks of getting this wrong

Ignoring pay transparency is more than a compliance issue. It’s a business risk you can’t ignore. The consequences will last.

It goes beyond fines. Non-compliance can lead to financial penalties that put pressure on your business. But the real damage hits your brand. A reputation for unfair pay can scare away great candidates and nudge your current people to look elsewhere.

There’s another threat — legal action from people who believe they’ve been treated unfairly. The mix of penalties, lost reputation and legal battles is a risk no business today can afford. Taking care of payroll compliance is about being fair, not just correct.

How to build a pay transparency strategy (before you’re forced to)

The best approach is to be proactive. Don’t wait for laws to push you into action. Take the lead and turn change into a story about your values.

Step 1: Conduct a pay equity audit

You can’t be transparent about pay if you haven’t done your homework internally. Start with a pay equity audit. Dig into your compensation data and look for pay gaps tied to gender, race or protected grounds.

This adds more than numbers. Once you spot gaps you can’t explain, take concrete steps to fix them. This is true equity in action. Strong payroll software can help you analyze and understand your payroll.

Step 2: Develop a clear compensation philosophy

Once you’ve tackled existing issues, it’s time for a pay philosophy. This keeps pay decisions clear and consistent.

Build salary bands for roles using clear factors — market data, skills, experience and impact. This approach reduces guesswork in pay decisions. It also makes your salary ranges competitive and backed up by logic, including when calculating payroll deductions.

Step 3: Train your managers

Your managers handle tough pay conversations. They need the tools to do it right.

Invest in training so your managers get the “why” behind your salary structure. When they can share your approach with confidence and consistency, trust grows across your business.

Lead the change with the right tools

Tackling the new landscape of pay transparency laws in Canada is tough, but it’s an incredible chance to build a workplace where people are engaged and high-performing. With the right plan and the right tools, you won’t just stay compliant. You’ll be a leader in the new world of work.

By making transparency your standard, you’re not just following the rules; you’re attracting the right people and building a culture that retains top talent. Ready for the next step? Employment Hero’s managed payroll and thorough Canadian payroll guide give you everything you need to set up a fair and compliant pay system. Go beyond compliance and create a better kind of workplace.

Get ahead of 2026 pay transparency rules with the systems, data and support to do it right.