In-house or outsourced: the comparison everyone gets wrong
The comparison you have read a dozen times sets a salary against a monthly fee and declares a winner. It is wrong before it starts, because a salary is not what an employee costs. In Canada an employer pays Canada Pension Plan and Employment Insurance contributions on top of every dollar of wage, and that is only where the extra cost begins.
Salary is not the cost of an employee. On a $55,000 salary outside Quebec, employer Canada Pension Plan contributions alone come to over $3,000 in 2026, and once you add Employment Insurance, a software seat, a workstation and the cost of replacing the person, the real annual figure is just over $60,000.
That means the honest comparison is a fully-loaded employment cost against an outsourced fee — roughly one extra dollar for every eight of salary before you count workers' compensation coverage. Below is the arithmetic with every rate sourced to CRA, and then the part the math cannot settle.
What an employer actually pays on top of wages in 2026
These are the statutory employer contributions, and they are not optional or negotiable:
- Canada Pension Plan. The employer rate is 5.95% on earnings between the $3,500 basic exemption and the year's maximum pensionable earnings of $74,600. The maximum employer contribution for 2026 is $4,230.45.
- Second CPP contribution (CPP2). A further 4.00% employer contribution on earnings between $74,600 and the year's additional maximum pensionable earnings of $85,000, to a maximum employer contribution of $416.00. It only bites if you pay above the first ceiling.
- Employment Insurance. Outside Quebec the employee rate is 1.63% on insurable earnings up to $68,900, and the employer pays 1.4 times the employee premium. The maximum employer premium is $1,572.30.
Both CPP ceilings and the EI rate are reset annually, so this arithmetic has to be redone every January.
Sources: CRA, CPP contribution rates, maximums and exemptions, CRA page updated 2025-10-31; second additional CPP contribution rates and maximums, CRA page updated 2025-10-31; EI premium rates and maximums, CRA page updated 2025-09-16.
The costs that never appear in the comparison
Beyond the statutory contributions, four more items belong in any honest total.
Paid time off
For a salaried employee, vacation and statutory holidays are not extra dollars — they are weeks you pay for and do not receive work. Adding a vacation percentage on top of a salary, as many comparisons do, double-counts. The real cost is coverage: for three or four weeks a year the bank reconciliation, the payroll run and the remittance still have to happen, and somebody has to do them. For an hourly employee it works the other way — vacation pay is paid on top of wages, and the rate and the entitlement are set by the employment standards of the province the employee works in rather than by any national rule. Get the figure that applies to you from your own province's employment standards, because it is not the same everywhere and it can change with length of service.
Workers' compensation coverage
Rates are set by each province's board and vary by industry classification, so there is no national number worth publishing. Get your own rate from your provincial board and apply it to assessable payroll. For an office role it is usually one of the smaller lines, but it is never nil, and coverage is not optional where it is required.
Software and equipment
An in-house bookkeeper needs their own accounting software seat, a payroll module, a laptop and a desk. An outsourced firm carries all of that inside its fee, which is one of the reasons a service rate sits above a wage — the full explanation is on what a bookkeeper costs in Canada, with sourced numbers.
Hiring, and hiring again
Somebody has to write the posting, screen candidates, interview, and then spend six to eight weeks getting a new person to the point where they know your suppliers, your coding and your quirks. That cost recurs every time the role turns over, and a one-person bookkeeping job in a small business turns over more often than owners expect.
A fully-costed example
Take a $55,000 salary — a round illustrative figure, chosen because it is a plausible starting salary and it keeps the arithmetic below the CPP ceilings so the pattern is easy to follow — for a salaried bookkeeper outside Quebec, in 2026. Software, equipment and hiring costs below are illustrative round numbers; the statutory lines are the real CRA rates.
| Cost line | How it is calculated | Annual |
|---|---|---|
| Salary | Illustrative round figure | 55,000.00 |
| Employer CPP | 5.95% of (55,000 − 3,500) | 3,064.25 |
| Employer CPP2 | 4.00% above 74,600 — none at this salary | nil |
| Employer EI | Employee premium 896.50 (1.63%), employer pays 1.4 times | 1,255.10 |
| Workers' compensation | Provincial rate on assessable payroll | varies |
| Accounting and payroll software seat | Illustrative | 600.00 |
| Laptop and workstation | Illustrative, spread over three years | 667.00 |
| Recruiting and training | Illustrative hiring round, spread over three years | 1,000.00 |
| Total | Before workers' compensation | 61,586.35 |
The salary is $55,000. The cost is just over $60,000 before workers' compensation coverage, and before the first week the seat sits empty. Any comparison that puts $55,000 against an annual outsourced fee is understating the employment side by roughly one dollar in eight — and that gap grows if the salary sits above the CPP ceilings, where CPP2 starts adding on top.
Compare like with like. When you set this against an outsourced quote, make sure the quote covers the same work: monthly reconciliation, GST/HST filing, payroll runs and year-end preparation are often priced separately. A fee that excludes payroll is not comparable to an employee who runs it.
What an in-house bookkeeper buys that outsourcing does not
- Availability. They are there at eleven on a Tuesday when a supplier disputes an invoice, so the answer takes ten minutes instead of a day.
- Context. Someone in the building learns which customer always pays late and which job codes get miscoded, so the questions stop coming back to you.
- Work that spills past bookkeeping. Chasing receivables, answering supplier calls, filing, front-desk cover — an employee absorbs the adjacent admin that an outsourced scope deliberately excludes.
- Control over sequence. You decide what gets done first when something urgent lands.
What outsourcing buys that in-house does not
- No single point of failure. When one person holds your entire finance function and they quit, get sick or take a holiday, your remittances do not care. A firm has cover built in.
- A second pair of eyes. In a firm that works properly, somebody reviews the file before anything is filed, so an error is caught internally rather than in a CRA notice.
- No employer obligations. No CPP or EI contributions, no workers' compensation registration, no payroll account to remit against, no employment standards exposure, no hiring cycle.
- It scales down as well as up. A quiet quarter means a smaller scope. An employee costs the same in a quiet quarter, and letting one go carries its own cost and obligations.
- Broader exposure. Someone who sees dozens of files has met your problem before. Someone who has only seen yours has not.
There is a hybrid that often beats both: an in-house administrator handling day-to-day entry, invoicing and receipt collection, with an outsourced bookkeeper reviewing, reconciling and filing. You get the availability and the review, and you are not paying employment costs for the technical work. If you are earlier than that decision, when it is actually time to hire a bookkeeper covers the trigger points, and how to check that a bookkeeper is who they say they are matters whichever route you take.
Quebec is a different calculation
If you employ someone in Quebec, do not use the numbers above unchanged. EI rates differ: the Quebec employee rate is 1.30%, with a maximum employee premium of $895.70 and a maximum employer premium of $1,253.98.
The pension side is different in kind, not just in rate. Quebec employees contribute to the Quebec Pension Plan rather than CPP, and it is administered by Revenu Québec rather than CRA. We do not publish 2026 QPP rates on this site, because CRA does not publish them and we only publish figures we have verified against the primary source. Get the current QPP employer rate, and the provincial premiums that go with it, from Revenu Québec directly before you budget a Quebec hire.
Source: CRA, EI premium rates and maximums, CRA page updated 2025-09-16. QPP figures are not published by CRA and are not quoted here.
Get the outsourced number so you can finish the comparison
Tell us your account count, transaction volume and whether you need GST/HST and payroll, and we will send a fixed monthly figure — so you are weighing a real fee against a real loaded salary instead of two guesses.
If you would rather see the scope before the price, what our bookkeeping service covers and what it gets you sets out each piece and where it stops.
Questions people actually ask
How much does an in-house bookkeeper really cost in Canada?
More than the salary, by roughly one dollar in eight for a salaried role outside Quebec. On a $55,000 salary in 2026, employer CPP is 5.95% of earnings between the $3,500 basic exemption and the $74,600 ceiling, and employer EI is 1.4 times the employee premium of 1.63% on insurable earnings up to $68,900. Add a software seat, a laptop, workers' compensation coverage at your provincial rate, and the cost of recruiting and training a replacement, and a $55,000 salary lands just over $60,000 a year. Redo the arithmetic each January, because the CPP ceilings and EI rate reset annually.
What payroll costs does an employer pay on top of salary?
Three statutory ones, plus whatever your province requires. Employer Canada Pension Plan contributions run at 5.95% of earnings between the $3,500 basic exemption and the $74,600 maximum pensionable earnings, capped at $4,230.45 for 2026. Above that ceiling, the second CPP contribution adds 4.00% up to the $85,000 additional ceiling and is capped at $416.00. Employment Insurance outside Quebec is charged to the employer at 1.4 times the employee premium, to a maximum employer premium of $1,572.30. Workers' compensation coverage is set provincially by industry classification and has to be obtained from your own provincial board.
Is outsourcing bookkeeping cheaper than hiring?
Often, but not always, and the answer depends on volume and on what you compare. Outsourcing removes employer CPP and EI contributions, workers' compensation registration, paid time off, equipment and the hiring cycle, and it scales down in a quiet quarter. Once transaction volume is high enough to keep someone busy most of the week, in-house usually wins on unit cost, and you also get availability and context that an outsourced scope excludes. Compare a fully-loaded employment cost against a quote covering the same work, including payroll and GST/HST, or the comparison is meaningless.
Do I have to pay vacation pay on top of a bookkeeper's salary?
Not for a salaried employee — their vacation is already inside the salary, and adding a vacation percentage on top double-counts, which is a common error in these comparisons. The real cost of paid time off is coverage: the reconciliations, payroll runs and remittances still have to happen during those weeks. For an hourly employee it is different, because vacation pay is paid on top of wages. The rate and the entitlement are set by provincial employment standards rather than by a national rule, and they can change with length of service, so check the standards for the province your employee works in rather than assuming a figure.
Are the employer payroll costs different in Quebec?
Yes, on both sides. Quebec EI rates differ from the rest of Canada: the employee rate is 1.30%, with a maximum employee premium of $895.70 and a maximum employer premium of $1,253.98. On pensions, Quebec employees contribute to the Quebec Pension Plan rather than the Canada Pension Plan, and it is administered by Revenu Québec rather than CRA. We do not publish QPP rates here because CRA does not publish them and every figure on this site is verified against its primary source, so get the current employer rate from Revenu Québec before budgeting a Quebec hire.
Can I use a part-time bookkeeper instead?
Yes, and for many small businesses it is the sensible middle path, but the employer obligations do not go away with fewer hours. CPP contributions still apply on earnings above the $3,500 basic exemption, EI still applies on insurable earnings, and workers' compensation and employment standards still apply. What genuinely shrinks is the salary and the equipment cost. The other common hybrid is an in-house administrator doing entry and receipt collection with an outsourced bookkeeper reviewing, reconciling and filing, which gets you availability and a second pair of eyes at the same time.