Canadians living pay cheque to pay cheque, challenged by debt and economy, payroll survey finds

Flat incomes, rising expenses, little savings mean financial concerns and delayed retirement for many

TORONTO, Sept. 7, 2016 /CNW/ - For many Canadians, the road to a comfortable retirement is becoming longer and more difficult. A large portion of the working population is living pay cheque to pay cheque, unable to save, and worried about their local economy, according to the Canadian Payroll Association's eighth annual Research Survey of Employed Canadians, released today ahead of National Payroll Week.

The survey of more than 5,600 employees across the country reveals that only 36% expect the economy in their city or town to improve, down from an average of 39% over the past three years and off significantly from 66% in 2009 when the survey was first launched.

Canadians still living pay cheque to pay cheque

Many working Canadians are barely making ends meet. Almost half (48%) report it would be difficult to meet their financial obligations if their pay cheque was delayed by even a single week (consistent with the three year average of 47%). Illustrating just how strapped some employees are, 24% say they likely could not come up with $2,000 if an emergency arose in the next month.

"A significant percentage of working Canadians carry debt, have a gloomy view of their local economy and are fearful of rising interest rates, inflation, and costs of living," says Patrick Culhane, the Canadian Payroll Association's President and CEO. "In this time of uncertainty, people need to take control of their finances by saving more. 'Paying Yourself First' (by automatically directing at least 10% of net pay into a separate savings account or retirement plan) enables employees to exercise some control over their financial future."

Incomes flat, saving capacity drained by spending and debt

"Survey data suggests that household income growth has stalled, as respondents reporting household income above $100K has hardly increased in five years," says Alec Milne, Principal at research provider Framework Partners. "In fact, real incomes have actually declined when inflation is taken into account."

While pay has remained largely unchanged, employees' spending and debt levels have affected their ability to save. According to the survey, 40% of employees say they spend all of or more than their net pay, and 47% are able to save just 5% or less of their earnings (far less than the 10% of net pay recommended by financial planning experts).

Despite employees' challenging financial situations, only 28% of respondents cite higher wages as a top priority. This is down from the average of 34% over the past three years. Instead, an overwhelming 48% are most interested in better work-life balance and a healthy work environment.

"Clearly, many Canadians are concerned about their financial situation," says Lucy Zambon, the Canadian Payroll Association's Board Chair. "But better work-life balance does not have to mean reduced financial security if you spend within your means and 'Pay Yourself First' as a step towards financial well-being."

More Canadians feeling overwhelmed by debt

Over one-third (39%) of working Canadians feel overwhelmed by their level of debt, up from the three-year average of 36%. Debt levels have risen over the past year for 31% of respondents.  And 11% do not think they will ever be debt-free.

Similar to prior years, 93% of respondents carry debt, with the most common debt being mortgages (26%), credit cards (18%), car loans (17%) and lines of credit (16%). Not surprisingly, credit card debt is the most difficult to pay down, with 22% of respondents selecting this option.

Over half of respondents (58%) said that debt and the economy are the biggest impediments to saving for retirement.

Retirement savings fall short, retirement pushed back

Half of Canadians think they will need a retirement nest-egg of at least $1 million, and 75% project that they will not be able to retire until at least age 60.

Unable to save adequately, the vast majority of working Canadians have fallen far behind their retirement goals, with 76% saying they have saved only one-quarter or less of what they feel they will need.

Even among those closer to retirement (50 and older), a disturbing 47% are still less than one-quarter of the way to their retirement savings goal.

Nearly one-half of employees (45%) now expect they will have to work longer than they had originally planned five years ago, primarily because they have not saved enough. Respondents' average target retirement has risen to 62, whereas these same respondents' target retirement age five years ago was 60.

The past eight years of data drove the Canadian Payroll Association to advocate for a modest enhancement to the Canada Pension Plan (CPP). The decision to enhance CPP by federal and provincial governments was partly due to the Canadian Payroll Association's multi-year advocacy on behalf of both employers and employees.

How payroll can help

"Enhancing the CPP bolsters all employees' financial well-being through an existing mandatory retirement program," says Culhane. "While an enhanced CPP will help employees, they still need to 'Pay Themselves First', and payroll professionals can help."

Payroll professionals can arrange to automatically deduct a portion of an employee's net pay each pay period and direct it into a separate savings or retirement account, making it easier to save.

The Canadian Payroll Association's Research Survey of Employed Canadians is conducted to mark National Payroll Week (September 12-16, 2016). For more information about National Payroll Week, and the mission-critical role of payroll professionals, visit

Regional survey findings are available. Go to → Media Room for provincial/regional news releases and infographics.

Canadian Payroll Association spokespersons are available across Canada for interviews.

Canadian Payroll Association Research Survey of Employed Canadians
A total of 5,629 employees from across Canada, and from a wide range of industry sectors, responded to an online research survey between Monday, June 27th, 2016 and Friday, August 5th, 2016, using a convenience sampling methodology. The survey was developed by the Canadian Payroll Association and conducted by Framework Partners. The survey is consistent with a margin of error of plus or minus 1.3% 19 times out of 20, but as a non-probabilistic methodology was used, a definitive margin of error cannot be expressed.

Payroll Professionals - Keeping Canada Paid™
Canada's 1.5 million employers rely on payroll practitioners to ensure the timely and accurate annual payment of $901 billion in wages, $305 billion in statutory remittances to the federal and provincial governments, and $163 billion in health and retirement benefits, while complying with more than 200 federal and provincial regulatory requirements. Since 1978, the Canadian Payroll Association has annually influenced the payroll compliance practices and processes of over five hundred thousand organizational payrolls. As the authoritative source of Canadian payroll knowledge, the Canadian Payroll Association promotes payroll compliance through education and advocacy.

SOURCE Canadian Payroll Association

Image with caption: "The Canadian Payroll Association’s (CPA’s) eighth annual National Payroll Week (NPW) Research Survey shows that Canadian employees continue to live pay cheque to pay cheque, are struggling to save for retirement, feel overwhelmed by debt and are increasingly worried about their local economy. For more survey results, visit the NPW website at or the CPA’s website at (CNW Group/Canadian Payroll Association)". Image available at:

For further information: Robert Stephens,, 416.777.0368; Leslie Challis,, 416.767.0167; Alison Rutka,, 416.487.3380 x 125


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