Paycheck Calculator

How this is worked out

Four deductions, and one structural point that most calculators get wrong.

Federal income tax. The 2026 brackets applied marginally, starting at 14% — reduced from 15%. Then the credits are subtracted.

Provincial income tax. Your province's own brackets, which are entirely separate from the federal ones, plus its own basic personal amount. Ontario also charges a surtax — 20% of Ontario tax above one threshold and a further 36% above a second — which is charged on the tax rather than on your income.

CPP and CPP2. 5.95% of earnings between the $3,500 basic exemption and the year's maximum pensionable earnings, then a second contribution at 4% between that ceiling and a higher one. CPP2 is the part people have not heard of and it is why take-home pay stops rising the way they expect at that income.

Employment Insurance. 1.63% up to the maximum insurable earnings, then nothing.

The structural point: the basic personal amount is a credit, not a deduction. It reduces your tax at the lowest rate, not at your marginal rate. A calculator that subtracts it from your income before applying the brackets overstates the benefit for anyone above the first bracket — by several hundred dollars for a high earner. Your CPP and EI contributions generate credits the same way.

A worked example

CPP2, and why your pay stopped rising the way you expected

Since 2024 the Canada Pension Plan has had a second tier. You contribute 5.95% on earnings between $3,500 and the first ceiling, and then a further 4% on earnings between that ceiling and a higher second one. For 2026 that means an extra contribution on roughly $10,400 of income once you pass the first ceiling.

The effect is a stretch of income where your marginal deduction rate is higher than the tax tables alone suggest, and it lands squarely on middle and upper-middle earners. It is not a tax — it buys a larger CPP entitlement in retirement — but it comes out of the same paycheck and almost nobody was told about it.

The calculator shows CPP and CPP2 on separate lines so you can see which one you are paying, and flags when you are in the second band.

The basic personal amount is a credit, and the difference is real money

This is the most common error in Canadian take-home calculators. The basic personal amount reduces your tax at the lowest rate in that jurisdiction, not at your marginal rate. Treating it as a deduction — subtracting it from income before applying the brackets — makes it worth 20.5% or 26% to a higher earner instead of 14%.

On the worked example above the difference between the two treatments is a few hundred dollars. On a higher salary it is more. This calculator applies it as a credit, which is what the CRA payroll formulas do, and it does the same with the credits generated by your CPP and EI contributions.

Federal and provincial basic personal amounts are separate and different — $16,452 federally, but ranging from about $11,200 in Newfoundland and Labrador to about $22,800 in Alberta. Each applies at its own jurisdiction’s lowest rate.

Ontario’s surtax makes its headline rate misleading

Ontario’s top provincial rate is 13.16%, which looks modest beside Quebec’s 25.75%. It is not the whole picture. Ontario charges a surtax on the tax itself: 20% of Ontario tax above one threshold, plus a further 36% above a second, so at the top the provincial tax is effectively multiplied by 1.56.

The surtax appears on this page as its own line inside the provincial tax figure, because a number you cannot see is a number you cannot check. It starts biting well before the top bracket — it is already non-zero at a $100,000 salary.

Prince Edward Island has historically operated a similar mechanism. Most other provinces do not, which is why comparing headline top rates across provinces is a poor guide to what anyone actually pays.

Quebec is a different system, and this page says so

Quebec residents get a 16.5% abatement of federal tax, because Quebec administers programmes the federal government runs elsewhere. That abatement is applied here and it is large — worth over $2,000 on a $100,000 salary.

Two things are not modelled. Quebec residents pay QPP rather than CPP, at a higher contribution rate, and they also pay QPIP premiums for parental insurance. Both come out of the same paycheck. Selecting Quebec above shows a notice saying exactly this, because a Quebec figure that quietly uses Ontario’s payroll deductions would be wrong in a way nobody could see.

If you are in Quebec and want an exact figure, Revenu Québec’s own calculator handles the provincial side properly. Use this one to understand the federal picture and the abatement.

Assumptions and sources

Federal brackets, Ontario brackets, CPP, CPP2 and EI

Canada Revenue Agency T4032 Payroll Deductions Tables, January 2026. checked 2026-08

Provincial and territorial brackets

KPMG Canada, federal and provincial/territorial rates and brackets for 2026. Federal figures cross-checked against the CRA tables; both agree exactly. checked 2026-08

Basic personal amounts

TD1 amounts for 2026. Federal and Ontario cross-checked against the CRA T4032 tables; both agree. checked 2026-08

Not modelled

QPP and QPIP for Quebec residents; credits beyond the basic personal amount and the CPP/EI credits; RRSP room limits.