What Are Insurable Earnings for WSIB in Ontario?

If you own a business in Ontario, it’s important to understand what counts as “insurable earnings” for the Workplace Safety and Insurance Board (WSIB).
This figure determines the base on which your insurance premiums are calculated — and, in some cases, what you or your workers may receive if a workplace injury occurs.

While WSIB coverage requirements vary depending on your business structure and industry, every registered business must accurately report the insurable earnings of its workers — and, in some cases, of the owners themselves.

1. Sole Proprietor

A sole proprietor is not automatically covered under WSIB but can choose optional coverage to protect themselves.

In this case, the insurable earnings are based on the net business income reported for tax purposes (the same amount declared on the T2125 Statement of Business Activities).

However, WSIB requires that a specific insured amount be declared each year, within the annual minimum and maximum limits set by WSIB.

For example, if the maximum insurable earnings limit is $110,000 and the minimum is $31,200, the proprietor can choose any amount in that range as the insured earnings base.

💡 Tip: If your income fluctuates, choose an insured amount that reflects your typical yearly earnings to avoid overpaying premiums.

2. Partnership

In a partnership, the partners are also not automatically covered, but they can choose to opt in for optional partner coverage.

Each covered partner must declare their own insured earnings amount, following the same annual WSIB limits as sole proprietors.

If the partnership has employees, coverage is mandatory for those workers, and their insurable earnings include:

• Regular wages or salaries

• Bonuses and commissions

• Employer-controlled tips

• Vacation pay and statutory holiday pay

Non-cash benefits (like company cars) and dividends are not considered insurable earnings.

3. Corporation

In a corporation, all employees and officers who receive a salary are automatically covered by WSIB — unless the owner or directors have filed for an executive officer exemption.

Insurable earnings include all cash-based payroll compensation, such as:

• Gross wages and salaries

• Overtime

• Bonuses and commissions

• Vacation pay

• Paid leave

However, dividends and expense reimbursements are excluded.
If a shareholder doesn’t receive a salary but only dividends, those amounts do not generate WSIB coverage.

📋 Note: Business owners working actively in the corporation can apply for optional WSIB coverage to protect themselves personally.

4. Annual Insurable Earnings Limits

Each year, WSIB publishes the maximum annual insurable earnings limit.
For example, in 2025, the maximum limit is $112,500 — meaning any earnings above that threshold are not subject to premiums.

5. Payments to Subcontractors

Payments to subcontractors can be tricky — sometimes they count as insurable earnings, and sometimes they don’t.
It depends on whether the subcontractor has their own WSIB coverage and the nature of the relationship.

🔹 Subcontractors with Their Own WSIB Account

If the subcontractor is registered with WSIB and has an active account number, payments to them are not insurable earnings.

✅ You must request a WSIB Clearance Certificate before paying them, confirming they are covered and in good standing.

🔹 Subcontractors Without WSIB Coverage

If the subcontractor does not have WSIB coverage, and the work they perform would normally require it (for example, construction or maintenance), WSIB may consider them your worker for premium purposes.
In that case, you must include those payments as insurable earnings and pay WSIB premiums accordingly.

🔹 Incorporated Subcontractors

If the subcontractor operates through a corporation and can provide proof (Articles of Incorporation, business number, etc.), WSIB generally treats them as an independent contractor.
Still, for covered industries like construction, WSIB may require a clearance certificate as proof.

💡 Example

Let’s say your company hires “Juan Pérez Contracting” for a painting job:

• If Juan has his own WSIB account and gives you a clearance certificate → ✅ You don’t include his payments as insurable earnings.

• If Juan has no WSIB coverage and is unincorporated → ⚠️ You must include those payments as insurable earnings.

• If Juan operates as an incorporated company → ✅ Usually not included, but keep copies of the clearance and incorporation documents for your records.

6. Final Thoughts

Understanding what qualifies as insurable earnings helps you avoid costly mistakes in WSIB reporting and ensures your business and workers are properly protected.

Keeping detailed payroll records — including pay slips, contractor invoices, and clearance certificates — is crucial to staying compliant.

🔔 Need Help with WSIB Registration or Reporting?

At Toro Financial Inc., we help you register your business with WSIB, determine your correct insurable earnings, and keep your reports up to date.

📞 Call us at (647) 459-1013 
💬 Book your free consultation here: Schedule a free consultation