Pay Raises in Ontario: Employee Rights and What You Should Know

Wondering if you’re entitled to a pay raise in Ontario? While many workers expect an annual salary increase, there’s no law that requires employers to raise your wages each year.

However, there are times when a pay increase is mandatory — such as when Ontario’s minimum wage changes, or your employment contract guarantees it.

Here’s what employees should know about raises, merit increases, and what to do if your employer cuts your pay instead.

Does My Employer Have to Give Me a Pay Raise?

No. In Ontario, there’s no legal requirement for employers to give a raise in pay or annual salary increase unless one of the following applies:

• The minimum wage increases, and your pay is below that new rate
• Your employment contract specifically includes a raise clause

That said, many employers offer annual or merit-based raises to retain good employees and stay competitive.

When Must an Employer Give a Raise in Ontario?

An employer is legally required to provide a wage increase only when:

1. The minimum wage increases, and your current rate falls below the new standard.
2. Your employment contract includes a written promise of a salary increase (for example, “3% annual raise” or “annual merit review”).

Outside of these situations, employers decide at their own discretion whether to raise pay.

If you’re unsure what your contract says, speak to an employment lawyer before signing or renewing it.

Can My Employer Raise Some Employees’ Pay and Not Others?

Yes — as long as it’s not discriminatory. Employers can legally offer pay increases to certain employees and not others, based on:

• Performance or merit increases
• Seniority or tenure
• Market adjustments to keep pay competitive

However, employers can’t base wage differences on protected grounds under the Ontario Human Rights Code, such as:

• Gender or sex
• Age
• Race or ethnicity
• Pregnancy or parental leave

If you believe your employer’s decision was discriminatory, contact Samfiru Tumarkin LLP for advice about a potential human rights claim.

What Is a Reasonable or Typical Raise in Ontario?

A typical raise in Ontario varies depending on your industry and company size. On average:

• 2% to 5% is a normal annual salary increase for most employees
• Merit raises may be higher for top performers
• Some employers offer a cost-of-living raise to offset inflation

How Often Should You Get a Raise in Ontario?

There’s no set rule for how often you should receive a pay raise. However, many employers conduct annual performance reviews that may lead to a raise.

It’s reasonable to expect a salary review:

• Every 12 months, or
• After a promotion or major responsibility change

If years go by without any increase, you can ask for a raise — but be strategic about your timing and approach.

How to Ask for a Raise at Work

If you’re planning to ask for a pay increase, preparation matters. Follow these steps:

1. Document your results: Track your contributions, projects, and goals achieved.
2. Know your market value: Research similar roles in your industry and location.
3. Time it right: Ask after a successful project, review cycle, or fiscal quarter.
4. Be specific: Request a clear percentage increase (e.g., 5%) and explain why.
5. Stay professional: Keep emotion out of the conversation and focus on value.

If your employer asks you to sign a new contract in exchange for a raise, have it reviewed by an employment lawyer first — it may contain terms that reduce your Ontario severance pay rights.

If Minimum Wage Increases, Should I Get a Raise Too?

Not necessarily.

If you already earn more than the new minimum wage, your employer doesn’t have to raise your pay. However, many companies choose to do so voluntarily to maintain fairness and avoid wage compression among staff.

Can My Employer Cut My Pay Instead of Giving a Raise?

No. Your employer can’t legally reduce your pay without your consent.
A pay cut or reduction in hours can amount to a constructive dismissal — which means your employer has effectively terminated your employment.

If this happens:

• Do not accept the new terms in writing or verbally
• Contact an employment lawyer before returning to work
• You may be entitled to full severance — up to 24 months’ pay

When to Contact an Employment Lawyer

If your employer:

• Denied you a fair pay increase
• Cut your wages without consent
• Fired you after asking for a raise

you may have grounds for compensation or severance pay.

Speak to the team at Samfiru Tumarkin LLP — Canada’s most positively reviewed employment law firm — to understand your rights and next steps.