Skilled trades payroll: apprentices, overtime, and the van in the driveway

Apprentices: the ratio is easy now, the payroll still is not

Ontario now runs a one-to-one journeyperson-to-apprentice ratio for most ratio trades, so the limit on hiring apprentices is usually your bench, not the rulebook. Each apprentice needs a registered training agreement with Skilled Trades Ontario, and their wage steps up as a percentage of the journeyperson rate by level — payroll has to move the rate the pay period the level changes, not months later when someone notices. From day one, apprentices carry full CPP, EI, WSIB and vacation like any other employee.

The piece most shops miss is the Apprenticeship Job Creation Tax Credit: 10% of an eligible apprentice's wages, up to $2,000 per apprentice per year, during the first two years of a Red Seal apprenticeship, claimed on your T2. Two first-year apprentices can be worth $4,000 a year — but only if payroll tags them at onboarding so the wages are traceable at tax time. We build that tag into the setup.

Overtime, on-call, and the three-hour rule

Overtime in an Ontario shop starts after 44 hours in a week, calculated at time and a half of the regular rate. Busy-season swings can be smoothed with an overtime averaging arrangement, but it needs a written agreement that meets ESA conditions — a handshake does not average anything. On-call time at home is generally unpaid under the ESA; the meter starts when the tech is called out, and a call-out that runs under three hours still pays three under the three-hour rule.

One newer wrinkle: journeypersons with heavy overtime now cross into the second CPP contribution tier, so CPP withholding continues above the base earnings ceiling instead of stopping mid-year the way senior techs remember. Getting that wrong understates remittances — and CRA notices at T4 time.

Vehicles, tools and allowances: taxable or not

This is where trades payrolls leak. The same dollar can be tax-free or fully taxable depending on how it is structured:

The service van in the driveway

A van that seats three or fewer and spends its life hauling parts and tools is usually not an "automobile" under the Income Tax Act, which means the punitive standby charge does not apply — but personal kilometres are still a benefit at a reasonable value. Where a tech takes a stocked van home because they are on the call rotation and dispatched from home, there is a defensible position that home-to-first-call travel is employment travel rather than personal use — the facts and the written policy decide it. Telematics makes this easy now: the GPS log is the kilometre log. We set the vehicle policy in writing, split business from personal kilometres, and put the right number — often zero — on the T4 with support behind it.

From timesheet to T4 without rekeying

Trades payroll should start where the hours already live. We pull time from field-service platforms like Jobber or ServiceTitan into Wagepoint or QuickBooks Online Payroll, remit on CRA's schedule, and file the T4s and ROEs from the same data — no Sunday-night spreadsheet. The same feed prices your work: a journeyperson's burdened hour includes employer CPP and EI, WSIB at your trade's rate class, vacation accrual and EHT once payroll clears the exemption, and that burdened rate is what your service rates have to recover — a calculation we formalize in CFO work for trades companies. And when a warranty job or an equipment purchase takes you across the border, the payroll and withholding questions that follow are covered in our cross-border tax work for skilled trades.

Source: CRA — T4130, Employers' Guide: Taxable Benefits and Allowances.