How Salary Negotiation In Canada Works

In Canada, your salary and pay package are usually negotiable. In fact, negotiating is a normal part of the hiring process (even if it feels a little awkward or intimidating). And if you don’t negotiate, it’s likely that you will end up earning less than you would have if you negotiated, which can set you up to earn less over the course of your entire career. 

Key Takeaways

• You can (and should) negotiate your salary during the hiring process and again at various points in your career. 
• Balancing your salary and benefits with the skills and value you bring to the company is important in salary negotiations. 
• Still at the sourcing a job stage? Check out our video covering how to land a job in Canada. 

Salary Negotiation Glossary

Before we dig into the ‘how’ of salary negotiation, we’ll quickly cover some key definitions: 

Salary: The agreed amount of money you will receive annually, regardless of hours worked. 

Hourly wage: The amount you earn per hour you work.

Commissions: Money paid to an employee based on the sales revenue they generate, often a percentage of the value of sales.

Bonus: An extra payment made to employees, often based on performance, company profits, or as an incentive to join the company or move into a new role. 

Health insurance: A benefit provided by the employer which subsidizes covered health expenses. Depending on your negotiations, you may need to partially pay for the insurance yourself. 

Retirement plan: Employers may offer an RRSP match. 

Vacation days: The number of paid days off you can take during a calendar year. 

Other compensation-related terms you may see include: 

• Stock options
• Health spending account
• Wellness spending account
• Profit sharing
• Personal days
• Sick leave (this is mandatory in some provinces, including BC)
• Employee Assistance Programs 
• Per Diem allowances for food and travel expenses
• Tuition reimbursement 
• Disability insurance
• Childcare/childcare allowance
• Relocation assistance. 

The reality is that you can negotiate almost anything into your salary and/or pay package. Do you want your employer to pay for (or partially cover) education expenses? Ask for it. A four day workweek? That may be negotiable. Leave early every Tuesday and Thursday to get your kids from school? See what your employer says. 

Another thing to consider is remote vs hybrid vs on-site workplace arrangements. On-site work works better for some, while work from home is a huge advantage for others. Flexible working arrangements are often negotiable, and you should outline your expectations (or aspirations) when negotiating your salary. 

What To Ask For When Negotiating Your Salary

You’ll be in the best position to negotiate a salary and benefits when you know what you need. This is likely to change over time as your lifestyle and goals change. But learning to work with your employer to find working conditions that work for you is a skill that’s worth developing as soon as you can. 

For some workers, it may be worthwhile negotiating a lower salary or hourly rate in exchange for more paid vacation, reduced hours, or a lighter workload. For others, the highest possible salary may be the major consideration. Neither of these approaches are ‘wrong’. 

What might be ‘wrong’ is negotiating hard for an extremely high salary, when your reality is that you aren’t a hard worker or you aren’t as qualified or experienced as you led your employer to believe. When you over-negotiate salary, you are often making a trade-off between pay and support and expectations. This may work out fine if you’re well suited to the role. But if you end up needing additional support or not meeting expectations, you may find that your salary won’t increase much or at all over time or, worse, you may be let go if you’re too expensive for your output. 

We often find that discussing salary trajectory during your initial salary negotiations is a better approach for workers who plan to stay with an employer for 12 months or longer. 

Starting Salary vs Potential Salary

Here are some questions you can ask to learn about the salary trajectory: 

• What milestones do I need to be achieving in {inset time period} to achieve a salary of X? 
• What does typical career progression and remuneration look like for someone in this role? 
• If I can do X for you, how will my salary change over time? 
• How often are salary reviews and evaluations conducted? 
• How is individual performance measured and rewarded? 
• Are there opportunities for professional development or continuous learning? 
• How do you ensure pay remains competitive within the industry? 
• Are you working on pay transparency and equity? Does it matter to the company if my earnings are fair compared to my co-workers? 

Depending on your values and personal goals, some of these questions may be irrelevant so feel free to pick and choose the questions above that resonate with you. 

What is always relevant is working out whether your employer is open to further negotiation on your salary if you deliver what’s expected of you and what your trajectory looks like if you are a high performer.

“When you join a new company, they are hiring you for your potential based on past experience. You have a chance to adapt well, demonstrate your ability, and focus on how best you can provide value for your employer. This is why it’s helpful for candidates not to obsess over starting salary but to focus on salary trajectory.” – Ruairi Spillane, Managing Director at Moving2Canada and Outpost Recruitment

Steps For Negotiating Your Salary

These steps apply for your salary negotiations during your initial hiring process, as well as whenever you discuss your salary with your current employer. 

1. Start with research.
2. Know what you need from your employer.
3. Know what you can offer your employer.
4. Practice answering salary-related questions.
5. Reveal your range.
6. Iron out the total package.
7. Get your offer in writing.

Let’s dig into these in more detail.

Start with research 

Research is one of the most important steps you will take in the salary negotiation process. Here are some of the things you need to know: 

• Market conditions, including unemployment rates, industry strength, and average working conditions for the industry generally and at the company you’re applying to. 
• Competition: high competition tends to lead to reduced salaries and lower bargaining power. 
• Company financial health and size. 
• Job title and responsibilities. 

It’s helpful at this stage to work with your professional network (start to develop one if you don’t have one) and potentially a recruitment agency. You can also use job search websites to review salary ranges and historical data, as well as employer reputation information. 

Know what you need from your employer

Having financial and professional goals is so empowering when it comes to sourcing and securing a new job. A strong understanding of what you need your job to provide, and what’s nice to have, is also really valuable during salary negotiations.

Here’s what you should consider: 

• How much money you need to earn to meet your expenses and savings goals. 
• What you need to learn to reach your professional 3-5 year goals. 
• Where you want your career to progress, and on what timeline. 
• How much flexibility you need to thrive personally alongside your work. 

Know what you can offer your employer 

Knowing what you bring to the table for an employer can really help you to negotiate your salary and compensation package confidently. It’s worth remembering that your potential employer won’t know your professional background or experience before you interview with them. Coming armed with examples of your ability to generate an ROI for the employer is extremely powerful, and can help you demonstrate your value and justify your compensation. 

“Confidence is important when it comes to salary negotiation. It’s going to be tricky for your future employer to believe you are entitled to the salary you’re asking for if it doesn’t seem like you believe it yourself. Being prepared can really help with your confidence, since you’re less likely to get questions you don’t know the answers to. So prepare, prepare, prepare – and make sure you do your market research. Ideally, have examples ready to show your interviewer too.” – Rebecca Major, Operations Manager at Moving2Canada.

Practice answering salary questions 

The reality is that you are very likely going to have to answer questions about your salary expectations during the interview process. You should carefully consider what you are going to say, and you should practice saying it – out loud. 

That said, it’s important to not come across as too scripted, so practice variations or work off bullet points instead of a precise script. 

Reveal your range

Offering a salary range instead of an exact dollar amount can be a powerful technique in salary negotiations. It demonstrates flexibility and can help you negotiate your total package. It also shows that you’ve done your research. 

You can say something like “given my education, experience, and research, I believe a range of $X to $Z is fair.” You can then go on to focus on what value you would bring to the company to justify that range. 

Iron out the total package

The total package is also a valuable negotiation strategy. If your salary is a little lower than you’d like, you can add value to your total compensation through addition vacation, workplace flexibility, professional development, childcare, or any number of other value-add benefits. 

This is another area where your salary negotiation strategy needs to be thoughtful. If you’ve negotiated to the highest possible salary, there will likely be less room for additional compensation through increased vacation or flexible hours.

Get your offer in writing

Once you’ve agreed to all the terms of your working conditions, get the offer in writing. This can ensure you and your employer are both clear on expectations. 

Found this resource helpful? Check out our other guides to work in Canada, including: 

Tips for Networking in Canada

Preparing for your interview

Understanding the hidden jobs market

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