What to know
- Toronto’s overtime costs rose from $109.4 million in 2023 to $134.2 million in 2025.
- Paid sick leave costs increased from $109.2 million to $131.9 million over the same period.
- Toronto Fire Services recorded the highest overtime spending in 2025 at $42.5 million.
- The Auditor General made four recommendations to improve attendance management, payroll monitoring, and compliance with city policies.
Toronto’s spending on employee overtime and paid sick leave has climbed by nearly $48 million over the past two years, according to a new report from the City’s Auditor General that says stronger payroll oversight is needed.
The report, which reviewed payroll activity between 2023 and 2025, found overtime costs rose by 22.7 per cent, increasing from $109.4 million in 2023 to $134.2 million in 2025. During the same period, paid sick leave costs also climbed by 20.8 per cent, rising from $109.2 million to $131.9 million.
Combined, the two categories increased by roughly $47.5 million over the two-year period.
The Auditor General reviewed more than six million payroll transactions involving approximately 35,300 City employees as part of a continuous monitoring program designed to identify unusual trends and areas where payroll controls could be strengthened.
According to the report, the increase in overtime spending is largely tied to operational pressures, including staff vacancies, rising employee absences and the need to maintain essential services that operate around the clock.
Toronto Fire Services recorded the highest overtime costs in 2025 at $42.5 million, followed by Seniors Services and Long-Term Care at $22.5 million, Toronto Paramedic Services at $20.6 million, Parks and Recreation at $9.7 million, and Toronto Water at $8.7 million. Together, those five divisions accounted for more than three-quarters of all overtime costs across the City.
The report also found other payroll expenses increased over the same period. Callback pay rose by 81 per cent, from about $890,000 in 2023 to $1.6 million in 2025, while standby pay increased by 30 per cent to $10.3 million. Employees also claimed more than 2.4 million kilometres for work-related travel in 2025, resulting in $1.74 million in kilometre reimbursements.
While the report did not identify widespread payroll fraud, it says there are opportunities to strengthen attendance management, improve payroll monitoring and ensure City policies are consistently followed.
The Auditor General made four recommendations to strengthen payroll oversight across the City.
They include improving the City’s attendance management program, ensuring staff follow policies for reporting new sick leave occurrences, reviewing overtime and lieu time paid to non-union employees, and addressing inconsistencies between divisional timekeeping systems and the City’s payroll system.
City management accepted all four recommendations.
