We are very lucky to have maternity leave in Canada: a 12-month parental leave or 18 month parental leave. Whether you’re taking maternity leave in Ontario, maternity leave in Alberta, maternity leave in Manitoba, or maternity leave in British Columbia, we all have the same access to 12 months or 18 months of parental leave. Here’s a detailed post to help you decide whether you should take the 12 or 18 month leave and which is better financially and how to apply for maternity or parental leave in Canada.
Updated July 2023.
Table of Contents
How Long is Maternity Leave in Canada?
Should you pick 12 vs 18 months of maternity leave?
I was so glad I applied for maternity leave and had access to it. I was sleep deprived and completely irritable and irrational. My poor husband had to bear the brunt of my irritability. I remember thinking that I would not be productive at work at all if I were to go back to work before 6 months because of the sleep deprivation.
After my son turned 1 year old, I think I was ready to go back to work and have a change in routine other than nap, eat, play, and repeat. I was tired of the Motherhood Penalty and my low parental leave income and trying to save money on a low income.
Maternity Leave in Canada 2023
We are fortunate in Canada to have access to this 12 or 18 month maternity leave. Here are the differences between the US and Canadian maternity leaves according to Investopedia.
When did the 18 month maternity leave start?
In 2017, the Liberal government announced that they would add another option for parents taking leave after the birth of their baby, the extended 18-month parental leave. This new policy didn’t start until 2018, and I had baby GYM in 2017.
In the middle of your parental leave, can you switch from 12 to 18 months maternity leave?
In other words, I was thinking: Can I extend my maternity leave after 52 weeks?
At first, I was really excited about the new policy, firstly because I thought I could extend my 12 months leave to 18 months (no, this was not the case, you have to decide if you want to do 12 months or 18 months before you go on leave), and secondly I thought it would be the same amount of money over 18 months.
However, after looking into it further, I found out that it is the same amount of employment insurance (EI) money but spread out over 18 months instead of 12 months.
I know actually a number of moms-to-be that are planning to take the 18 months parental leave. I would say the percentage of moms to be that I know who are planning to take the extended 18-month leave is around 30%. That being said, I don’t socialize much lol so my sample size is small and likely, not accurate.
Both of the 12 and 18-month parental leave options start off with the 15-week maternity leave. After the 15-week maternity leave is finished, the parental leave kicks on and this can be either 35 weeks (12 months) or 61 weeks (18 months).
Here’s how the standard parental benefits (12 months maternity leave) and the extended parental benefits (18 months maternity leave) work and which one would make more financial sense for your family.
The 12 Month Maternity Leave in Canada
The 12-month maternity leave/ parental leave is also called standard parental benefits. For a 12 month leave, employment insurance will pay you 55 per cent of your average insurable weekly earnings if you qualify.
To qualify, you’ll have had to work 600 insurable hours and also be hit with a 40% decrease in income during your leave. EI payments will be paid for 15 weeks for maternity leave and 35 weeks for parental leave (which can be shared between the parents).
Because of COVID, the government made some special changes in 2020. Instead of 600 hours of work, you only need 120 insured hours to qualify for benefits because you will receive a one-time credit of 480 insured hours to help you meet the required 600 insured hours of work.
To figure out how much you will get over the course of your maternity leave, you need to know your salary.
The EI benefits pay out 55% of your average weekly insurable earnings up to a maximum amount. Which means that even if you make $75,000 annually, you will still be paid out the maximum amount on a weekly basis which is 55% of your earnings up to 35 weeks, or around $638 each week for 2022.
That’s about $2552 per month (before taxes deducted).
The 18 Month Maternity Leave in Canada
The 18-month maternity leave/ parental leave is called the extended parental benefits.
The extended parental benefits pay out 33% of your average weekly insurable earnings, up to the same maximum amount, for a maximum duration of 61 weeks.
For 2022: This works out to be around $383 each week.
This is roughly $1532 a month (this is before taxes are deducted).
YOU HAVE TO BUDGET FOR IT
Depending on your employer benefits or even whether you are self-employed, you have to budget for your maternity leave unless you’re lucky enough to be taking maternity leave in Sweden, which pays 80% of your income for the full 18 months.
Even if you get a top up from your employer (which may replace up to 70-85 or even 90% of your gross pay) for a few months, you will still have to budget for the remaining year which will only be funded by EI payments. The maximum EI payment is around $2000 a month. Unless you’re taking maternity leave in Sweden, which pays 80% of your income for the full 18 months.
In addition to the hit to your income, baby expenses can be very costly in the first year, diapers don’t always come cheap. Of course, there are lots of free baby stuff in Canada that you can sign up for to decrease the cost. 32 Newborn Huggies diapers can last you three days, haha!
Maternity Leave Canada Calculator
TD Canada Trust has a handy Parental Leave Calculator on their site so you can estimate how much you will receive. I found this to be pretty accurate.
For more accuracy, here is the maternity leave calculator from the Government of Canada.
This is what the mat leave calculator looks like on the government’s website- you just input the numbers:
I ran the numbers for an arbitrary due date and on a salary of $75,000 annually. It breaks it down to when your maternity benefits will start and when the parental benefits will start and how much it will be.
It also breaks it down to if you were to use the 18 month option and how much you would receive a month.
The maternity leave calculator for Ontario and the maternity leave calculator for Alberta should be about the same since these are federal benefits.
Here’s what the maternity leave Canada calculator says:
For the 12 month leave, at around $638 each week over 35 weeks, that works out to be $22,330 in total received as a benefit.
Let’s run the numbers for an example with 2019 numbers.
So let’s say my baby was born in June 2018, and my salary is $75,000 and I intend to go back to work full time after my leave and my top up salary from my employer was for 6 months and it was topped up to around 80% of my salary and there was a top up for the first 2 weeks of the waiting period as well. In 2018, I would get $37,500 for the first half of the year, and $30,000 for the second half of the year, for a total of $67,500 in annual income.
Then in 2019, the top up would be finished, and I would get just EI payments. This would be $14,612 and then I go back to my job in June 2019 and make $37,500. That would be a total of $52,112. And in 2020 my income would be $75,000 again. Roughly, total income before taxes and other specifics from 2018-2019 would be $119,612 with the 12 month leave.
For the 18 month leave, at around $337 each week over 61 weeks, that works out to be $20,557 in total received as a benefit. Let’s make the same assumptions as the previous example, with a baby born June 2018 and a salary of $75,000. The top-up is the same for 6 months in total.
In 2018, I would get $37,500 for the first half of the year, and $30,000 for the second half of the year for a total of $67,500 in annual income Then in 2019, I would just get EI payments and this would be for the whole of 2019, which would be $17,524. Roughly, total income before taxes and other specifics from 2018-2019 would be $85,024 with the 18-month leave.
The maternity leave Ontario calculator should be roughly the same.
Does 12 months or 18 months leave Make More Financial Sense?
With the example situation above, the difference is around $34,588 in lost salary when opting for an 18-month leave over a 12-month leave. Of course, there are other factors in play, like how much daycare is in your area (for example, 6 months of $1500/month daycare you would be spending $9000 which is less than the $34,588 in salary if your annual salary is $75,000).
Or the opportunity cost of missing out on another 6 months of being in the workforce. Or the opportunity cost of not being present for your company’s annual salary review or increases and losing out on that with a longer leave.
Also, on the flip side, having a lower family net income may qualify you for more Child Care Benefit (CCB) payments.
Running the numbers with the above scenario, it makes more financial sense to opt for the 12-month leave.
However, if you have a generous benefits package, like for example if you work for the federal government (who get 90+% top up for 12 months for their leave, from what I have heard from people I know who work in the federal government), it may not be as financially difficult to extend another 6 months for a total of 18 months with solely EI payments since 12 months is topped up. It will still not be ideal from a financial standpoint, but it is less expensive for the household budget for sure if you have a generous top-up for parental leave.
Also, keep in mind that if you don’t return to work after your maternity or parental leave, you may be on the hook to pay back your top up for your maternity or parental leave from your employer.
Any little bit counts, if you live in British Columbia, don’t forget to apply for the BCTESG when your child turns 6 to get $1200 money with no catch (you don’t have to deposit money yourself).
How Do You Apply for maternity Leave in Canada?
First off, you will have to be employed. If you’re self employed and you don’t pay into EI benefits, you don’t get access to maternity leave or parental leave. If you are employed, you would inform your manager and contact human resources to fill out preliminary paperwork. You will need to let them know which option you are planning to take (the 12 month or the 18 month parental leave option).
On the last day of work you can start to apply for EI maternity and parental benefits. If you wait too long (e.g. past four weeks), you risk losing your benefits!
Here’s the government website to apply for your EI maternity and parental leave in Canada.
It’s pretty straight forward but to receive your access code in the mail and to actually see your benefits start being paid out takes a bit of time. Make sure you have money saved up for this time with lost income.
Still, the Option is Nice for Maternity Leave in Canada
Although it makes more financial sense to just opt for the 12 month leave for most people (e.g. the majority of people who work for the federal government or those who don’t have an amazing top-up benefit), having the option of the 18 months extended leave is nice.
I know that when I went back to work at 12-13 months it was really hard for me both professionally and also as a new mom.
It was hard not seeing my baby for a whole day– but at the same time kind of nice because I could actually let my brain rest a little without worrying my baby was going to hurt himself!
After a few months back at work though, I got back into the swing of things and my mom brain subsided and confidence slowly grew at work. It felt nice to work my brain again for more complex tasks and problem solving as a working mom.
I think this second time around, I will opt for the 12 month leave again, but my plan is to look for part-time work when I return, as part of my phased retirement plan. I think if I were to go back to work full-time, I may opt for the 18 month leave for non-financial reasons (like more time to spend with my baby and more flexibility).
If you are lucky enough to have a defined benefit pension in Canada, here’s a post on whether it makes financial sense to buy back your pension when you return to work from your parental leave.
Recap of 12 vs 18 month maternity leave
To recap, if I were making $75,000 annually prior to going on maternity and parental leave in Canada, and I were wondering how much you would get from EI every week for 12 months vs 18 months maternity leave…
For the 12 month leave, you get $638 each week over 35 weeks, that works out to be $22,330 in total received as a benefit.
For the 18 month extended leave, you get $383 each week over 61 weeks, that works out to be $23,363 in total received as a benefit.
Maternity benefits (the first 15 weeks) can only be taken by the mother and parental leave benefits (the 35 weeks or 61 weeks) can be taken by either parent.
In summary, the 12 vs 18 month parental leave is pretty much the same benefit but stretched out over a longer period of time for the 18 month leave. However, the confounding factors are access to childcare (and how much it is and how soon you can access it) and whether both parents can take parental leave at the same time (the answer is no but it can be shared).
Financially speaking, the 12 months maternity leave makes more financial sense. We know that it’s not just about the finances though when you become a parent. I know of many moms who decided to take the 18 month leave because it will be the last maternity leave and they want to spend that time with their children.
It’s enough worrying about whether to do a 12 month or 18 month leave, but once your child is born there is a whole lot of other stuff to sign up for. Here’s a complete financial checklist for new parents in Canada to keep you organized.
Finally, if you’re remotely thinking of working during parental leave or maternity leave in Canada, read this first.
Canadian Moms and Dads, did you pick the 12 month or the 18 month leave?
Which one made more financial or family sense for you?
You might also be interested in:
- RESP in Canada: The Ultimate Guide on How the RESP Works
- Buying Back Pension is it Worth It?
- Child Tax Benefit Payment Dates in Canada
- Financial Infidelity and How to Prevent It
- Canada Child Benefit Amount
GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for blog updates, a free dividend yield spreadsheet, and the free Young Money Bootcamp eCourse.