"What should I charge?" is one of the first questions every new agency owner asks, and one of the easiest to get wrong. I remember sitting at my kitchen table with a spreadsheet, worried I'd price myself out of the market or not earn enough to pay anyone. Here's the simple method I wish I'd had, with real 2026 Canadian payroll numbers and a worked example.
Start with your true cost per hour, not your competitors' prices
Most new owners look up what other agencies charge and go a few dollars lower. The problem is that you don't know their costs. Start with what one hour of care actually costs you, then check the market.
Your true cost per hour has three layers:
- The caregiver's wage, what you pay per hour.
- Mandatory employer costs on top of that wage.
- Overhead, everything else it takes to run the business, spread across your care hours.
Then you check that your rate leaves room for profit, using one simple rule: the caregiver's wage should never be more than 60% of your bill rate.
Layer 1 and 2: wages plus employer costs (2026)
If your caregivers are employees (and in most cases they should be), the hourly wage is only the starting point. In 2026 you'll also pay:
- CPP: the employer matches the employee's 5.95% contribution (on earnings above the $3,500 basic exemption, up to $74,600). In Quebec, QPP applies instead.
- EI: the employer pays 1.4 times the employee's 1.63% premium, about 2.28% of wages (outside Quebec).
- Workers' compensation: rates depend on your province and industry classification. In Ontario, WSIB's 2026 rate for ambulatory health care (class N1) is $1.59 per $100 of payroll. Confirm your own classification with your provincial board.
- Vacation pay: at least 4% in most provinces (more after several years of service, depending on the province).
- Public holiday pay: Ontario has 9 public holidays, and other provinces differ. Many agencies cover this by charging a higher rate for holiday shifts (see below).
Together, these employer costs usually add about 13–15% on top of the base wage.
Layer 3: overhead
This is the part new owners forget. Your rate has to cover:
- Business and liability insurance
- Scheduling and payroll software
- Your phone, internet, website and marketing
- Mileage or travel time between clients
- Training, police checks and onboarding for new caregivers
- Paid office time: scheduling, client intake, supervisory visits, payroll (even if, at first, that's you)
- Unbilled time like cancellations and short shifts
Add up a month of these costs and divide by the care hours you expect to bill that month. When you're small, overhead per hour is high; it drops as you grow.
The 60% rule
Here's the simplest way to set a rate you can live on: divide the caregiver's wage by 0.60. That keeps wages at no more than 60% of what you bill, and leaves about 40% to cover employer costs, overhead and profit.
If wages creep above 60% of your rate, there usually isn't enough left to run the business properly, or to pay yourself.
A worked example
Here's an example for an Ontario agency paying a caregiver $22/hour. These are sample numbers to show the method; plug in your own.
Step 1: Apply the 60% rule. $22.00 ÷ 0.60 = $36.67, so you'd charge at least $37/hour.
Step 2: Check where the money goes.
| Per hour billed at $37 | Amount | Share of rate |
|---|---|---|
| Caregiver wage | $22.00 | 59% |
| Employer costs: vacation pay (4%), CPP (5.95%), EI (about 2.28%), WSIB (about 1.59%) | $3.12 | 8% |
| Left for overhead and profit | $11.88 | 32% |
Step 3: Make sure your overhead fits. Add up your monthly overhead and divide it by your billable hours. If it's more than the $11.88 left over (minus the profit you want to keep), you'll need to raise your rate, grow your hours or trim costs.
Notice that a $22 wage turns into a $37 rate. That gap isn't greed, it's what it costs to run a safe, insured, properly staffed agency. If a competitor charges $30 while paying caregivers $22, wages are over 70% of their rate, and something is probably being skipped.
Then check your local market
Once you know your floor, look at what other private agencies in your area charge. Many will quote rates over the phone or list them online. Then decide where you fit:
- If the market is higher than your number, great. Price in line with others and use the extra margin to pay caregivers well (which helps you keep them).
- If the market is lower, don't just cut your rate. Look at your overhead, your minimum visit length and your service mix first.
Five pricing details that protect your margin
- Set a minimum visit length. Many agencies use 2–3 hours. A one-hour visit costs almost as much in travel and scheduling as a three-hour one.
- Charge more for evenings, weekends and holidays. You'll often pay caregivers more for these shifts, and holiday shifts may come with premium pay under employment standards.
- Price nursing separately. Services provided by RNs or RPNs/LPNs cost much more to deliver and should have their own rates.
- Have a cancellation policy. Last-minute cancellations still cost you, especially if you guaranteed the caregiver their shift.
- Review your rates every year. Minimum wages, CPP and insurance change every year. (Ontario's minimum wage rose to $17.95 on October 1, 2026.) Build a yearly increase into your client agreements.
A note for U.S. readers
The method is the same, but the employer costs differ: in the U.S. you'll budget for the employer share of Social Security and Medicare (7.65%), federal and state unemployment taxes, and workers' compensation, which varies by state. Check your state's rules before you set rates.
Want the numbers done for you?
The Complete Start-Up Kit ($199) includes the financial planning tools I use, so you can work out your own rates, cash flow and break-even point. If you're just getting started, the Quick Start Guide ($49) walks you through the first steps, and if you upgrade to the Kit later, your $49 is credited automatically.
Not ready to buy anything yet? Grab the free Business Plan Worksheet and start mapping out your services and finances today.
This article is general information, not tax, legal or accounting advice. Payroll rates are 2026 figures and change every year. Confirm the rules in your province with the CRA, your workers' compensation board and an accountant.
About the Author
