In Ontario, any “standby” or “on-call” stipends paid to employees must be fully reported to the WSIB as assessable earnings. Even if the employee never receives a call or steps foot on the job site during their weekend on standby, the WSIB considers these flat-rate payments to be taxable payroll, and you must calculate and remit premiums on those amounts.
Modern businesses in Ontario require round-the-clock reliability. Whether you manage an IT tech support firm in Ottawa, an emergency plumbing company in Toronto, or a winter snow removal crew in Sudbury, your employees are likely receiving “standby” or “on-call” pay. As of May 2026, compensating staff with a flat rate of $100 just to keep their phones on and stay sober over the weekend is a standard industry practice.
However, many employers mistakenly believe that because the employee was sitting at home watching television and doing no actual physical labour, this stipend is exempt from the Workplace Safety and Insurance Board (WSIB). This is a dangerous misconception that triggers massive penalties during routine payroll audits. The WSIB broadly defines “earnings,” and standby pay falls squarely into the assessable category. If your business heavily relies on on-call shifts, we strongly advise consulting a WSIB accounting specialist or payroll lawyer from our directory to ensure your ledgers are compliant. 🔍
Step-by-Step Process: Reporting On-Call Pay to the WSIB
Ensuring your payroll software accurately tracks and reports assessable earnings prevents devastating retroactive premium bills. Here is how Ontario employers must handle standby pay. 📍
Step 1: Identify All Forms of Remuneration
You must look at exactly how you compensate your employees. WSIB assessable earnings include regular wages, overtime, vacation pay, bonuses, and yes, on-call stipends.
Whether you pay a flat rate of $50 per shift to carry a pager, or you pay a reduced hourly minimum wage to sit by the phone, every single dollar transferred to the employee for their availability must be flagged in your payroll system as gross earnings.
Step 2: Distinguish Standby Pay from Actual Call-In Pay
While both are subject to WSIB premiums, you should track them separately for Employment Standards Act (ESA) compliance. 📈
“Standby pay” is the stipend given just for being available. “Call-in pay” occurs when the phone actually rings, and the employee must log onto their computer or drive to a job site. In Ontario, if an employee is called in, the ESA usually requires you to pay them for at least three hours of work at their regular rate. Both the standby stipend and the resulting call-in pay are fully assessable by the WSIB.
Step 3: Add the Amounts to T4 Gross Earnings
When you prepare your annual tax documents, standby pay is not a tax-free gift; it must be included in Box 14 (Employment Income) of the employee’s T4 slip.
The WSIB uses CRA T4 summaries as the primary tool during an audit to verify your reported payroll. If your total WSIB reported payroll does not closely match the total T4 wages issued to your staff, it will automatically trigger a red flag at the WSIB.
Step 4: Apply the Annual Maximum Assessable Earnings Limit
There is a cap on how much premium you have to pay per worker. Every year, the WSIB sets a maximum assessable earnings ceiling (which regularly increases due to inflation, hovering well over $115,000 CAD annually in 2026).
You must add the standby pay to the employee’s regular wages. Once the employee’s total gross earnings (including all on-call stipends) hit that annual maximum limit, you stop paying WSIB premiums on any further earnings for that specific worker for the rest of the calendar year.
Step 5: Prepare for WSIB Payroll Audits
WSIB auditors frequently target IT, maintenance, and construction firms specifically to check if they are hiding standby pay or vehicle allowances. ⚠️
Maintain clear ledger accounts. Your bookkeeper must be able to instantly generate a report showing exactly how much on-call pay was distributed and prove that those exact amounts were included in the quarterly or monthly WSIB premium remittances.
How Much Does it Cost in Ontario?
Failing to report standby pay can result in steep financial consequences that far exceed the original premiums you were trying to save. 💰
- WSIB Premium Rates: Your cost depends entirely on your industry classification rate. If your rate is $2.00 CAD per $100 of payroll, paying an employee $5,000 a year in standby stipends will only cost you an extra $100 in WSIB premiums.
- Audit Penalties: If caught hiding payroll during an audit, the WSIB will charge you the retroactive premiums plus a non-compliance penalty, and severe daily interest on the unpaid amounts.
- Legal/Consulting Fees: Hiring a WSIB consultant or an accountant to untangle a botched payroll audit generally costs between $1,500 and $4,000 CAD.
| Type of Payment | Subject to WSIB Premiums? | Reasoning under Ontario Law |
|---|---|---|
| Standby / Pager Stipend | Yes | Considered part of total gross remuneration for employment duties. |
| Actual Call-In Wages (3-Hour Minimum) | Yes | Standard wages for physical or remote work performed. |
| Severance Pay | No | Paid for the termination of employment, not for work performed. |
How Long Does the Process Take?
Reporting payroll is an ongoing administrative duty. Employers in Ontario typically report their assessable earnings and remit premiums to the WSIB on a monthly or quarterly basis, depending on the size of their overall payroll. ⌛
If the WSIB flags your account for an audit regarding unreported standby pay, the audit process can take 3 to 6 months to conclude. The auditor has the legal authority to look back at your payroll records for up to the past 3 years (and sometimes further if gross negligence or fraud is suspected).
Frequently Asked Questions (FAQ)
Is an employee covered by WSIB if they are injured at home while on standby?
Usually, no. Unless they were actively performing a work-related duty at the exact moment of the injury (like logging into a work laptop to fix a server issue), slipping in the shower while carrying a work pager on a Sunday is generally not considered an injury “arising out of and in the course of employment.”
Do we pay premiums on standby pay for independent contractors?
If they are genuinely independent contractors (who run their own distinct business and have their own WSIB clearance certificates), no. However, if the WSIB determines they are actually employees disguised as contractors, you will owe premiums on all their earnings, including on-call stipends.
What if the on-call pay pushes their income over the annual WSIB maximum?
You do not pay premiums on any dollar earned above the annual maximum assessable earnings ceiling. If their regular salary puts them at $110,000, and their standby pay adds $10,000, you only pay premiums up to the precise annual cap set for that year, and the remainder is exempt.
Can I dispute a WSIB auditor’s decision to include our stipends?
Yes. If you believe an auditor incorrectly assessed a payment, you can formally object to the decision within six months. The dispute will be reviewed by the WSIB Appeals Services Division. However, because standby pay is clearly defined as earnings in WSIB policy, winning this specific argument is extremely difficult.
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