City overtime and sick leave costs climbed nearly $48M in two years

Toronto's spending on employee overtime and paid sick leave has jumped by nearly $48 million over the past two years, according to a new report from the City's Auditor General that flags weaknesses in payroll oversight.

Overtime costs rose 22.7 percent, increasing from $109.4 million in 2023 to $134.2 million in 2025. Paid sick leave costs climbed 20.8 percent over the same period, rising from $109.2 million to $131.9 million. Combined, the two categories increased by roughly $47.5 million.

The Auditor General reviewed more than six million payroll transactions involving approximately 35,300 city employees. The report found that 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. Those five divisions accounted for more than three-quarters of all overtime across the city.

The report also found other payroll expenses increased over the period. Callback pay rose 81 percent to $1.6 million, while standby pay increased 30 percent to $10.3 million. Employees claimed more than 2.4 million kilometres for work-related travel in 2025, resulting in $1.74 million in reimbursements.

The Auditor General made four recommendations to strengthen payroll oversight, including improving attendance management, ensuring staff follow policies for reporting sick leave, reviewing overtime paid to non-union employees, and addressing inconsistencies between divisional timekeeping systems and the city's payroll system. City management accepted all four recommendations.