This article does not provide legal, or any professional advice. It is meant to provide information.
Ontario Works (OW) provides financial and employment assistance to individuals in need, covering basic living expenses, health benefits, and job support. If you're receiving Ontario Works and want to work or start a business, you may be wondering how it affects your benefits. This guide explains how Ontario Works calculates employment and business income, what deductions are allowed, and how to report your earnings accurately.
I wanted to mention that all the information in this article is based on information from the Government of Ontario’s website in February 2025.
Disclaimer: This blog post is for informational purposes only and is not intended as legal or financial advice. Please consult with a qualified professional for personalized guidance regarding your specific situation.
Ontario Works and Employment
While on Ontario Works, you are required to report all earnings each month, as they affect the following month’s financial assistance. This includes wages from jobs, training programs, and self-employment income earned by you, your spouse, or children aged 18 and older. Even if certain income is exempt, it must still be reported.
Ontario Works considers net monthly earnings (after deductions like income tax, Canada Pension Plan, and Employment Insurance) when determining your financial assistance.
If you work as an employee, Ontario Works allows you to earn up to $200 per month that is fully exempt. After the $200, 50% of what you make in addition is fully exempt.
Ontario Works permits deductions for child care costs. When reporting earnings, you can claim the full cost of licensed child care. For unlicensed care, such as nannies, up to $600 per child is deductible. Additionally, the full cost of before-and after-school programs in full-day kindergarten is allowed. However, you cannot claim these costs if the caregiver is a family member receiving financial assistance with you, or if you can obtain child care funding from another source.
For example, if you are receiving the maximum Ontario Works support of $733 per month for a single person and start working at McDonald's earning $420 in gross pay and $300 in net pay, your OW payment would be adjusted as follows:
1. Subtract the earnings exemption:
$300 - $200 = $100
$100 - 50% (100 x 0.5) = $50
2. Adjust OW support:
$733 - $50 = $683 (new OW amount)
In this case, you would still receive $683 in Ontario Works support while earning $300 in employment income, giving you a total monthly income of $983.
Ontario Works and Self-Employment
Ontario Works calculates your self-employment income using the same percentage-based deduction method as it does for regular employment. Only 50% of your net self-employment income above $200 is deducted from your OW payment, just as it would be for a job. The only thing different is that you are able to claim business expenses.
Eligible business expenses that can be deducted before calculating net self-employment income include:
- Supplies and tools
- Bookkeeping and accounting fees
- Marketing and advertising costs
Expenses such as employee wages and business losses cannot be deducted from Ontario Works calculations. There is no specified limit for deductions, so it is best to check with your caseworker about which expenses are approved.
Example: OW Income Calculation for Self-Employment
Let’s say you run a small social work practice and earn $1,500 in revenue per month. After deducting $250 in bookkeeping and advertising fees, your net business income is $1,250.
If you also have child care expenses of $600 per month, the calculation would be:
1. Subtract business and childcare expenses:
$1,500 - $250 = $1,250
$1,250 - $600 = $650
2. Apply OW exemptions:
First $200 is fully exempt → $650 - $200 = $450
50% of remaining income is deducted → $450 × 0.50 = $225
3. Adjust OW support:
$733 - $225 = $508 (new OW amount)
In this case, you would still receive $508 in Ontario Works support while earning $1,250 in net self-employment income, giving you a total monthly income of $1,758.
Reporting Your Income
All earnings must be reported monthly, even if they are exempt. If you have a regular job, report your gross pay, net pay, and deductions each month, and Ontario Works will adjust your payment accordingly.
For self-employment, report your gross and net business income monthly, along with any approved business expenses. Your caseworker can provide guidance on which deductions are allowed.
Why Understanding OW and Employment Rules Matters
Knowing how Ontario Works calculates income can help you figure out your benefits in order to gain independence and transition off the program. Whether you're starting a job or launching a business, understanding exemptions, deductions, and reporting requirements ensures you receive the correct OW support.
If you have questions about how your income affects your Ontario Works benefits, contact your caseworker or visit the official government website for more information.
If you would like more financial resources, you can check out my Ebooks on programs both on the provincial and federal level on Ontario Without Barriers.