How it works
Every Canadian pay stub has federal tax, provincial or territorial tax, a pension contribution and an employment insurance premium taken off. The calculator follows the CRA T4127 Payroll Deductions Formulas (2026 edition), the formulas the CRA publishes for employers' payroll: it takes your gross pay for one period, subtracts RRSP contributions made through payroll and union dues, projects that amount over the year using your pay frequency, works out annual federal and provincial tax, subtracts the tax credits from your TD1 claim amounts, and divides the result back into one pay.
Federal tax. Federal tax is charged in brackets, from 14% on the first $58,523 of taxable income up to 33% above $258,482 (CRA T4127, 2026). Your federal TD1 claim amount, which defaults to the basic personal amount of $16,452, is turned into a credit at the lowest federal rate. The federal basic personal amount is lower for net income above $181,440; the TD1 worksheet shows the amount that applies. The formula also includes the Canada employment amount of $1,501 and credits for CPP and EI (CRA T4127, 2026).
Provincial or territorial tax. Each province and territory has its own brackets, basic personal amount and credits, which the CRA publishes in T4127 for every jurisdiction except Quebec. Some add their own items: Ontario adds a surtax and the Ontario Health Premium, and British Columbia has a tax reduction for lower incomes. Quebec tax is set and administered by Revenu Québec under TP-1015.F-V (2026), and Quebec residents receive a federal abatement of 16.5% of basic federal tax.
CPP. Outside Quebec, employees pay Canada Pension Plan contributions of 5.95% on earnings between the basic exemption of $3,500 and the Year's Maximum Pensionable Earnings (YMPE) of $74,600. A second contribution, CPP2, of 4% applies to earnings between $74,600 and the Year's Additional Maximum Pensionable Earnings (YAMPE) of $85,000 (CRA, CPP contribution rates, maximums and exemptions, 2026). Part of these contributions reduces taxable income and part gives a tax credit, as the T4127 formulas set out. Quebec workers pay QPP to Retraite Québec instead.
EI. Employment Insurance premiums are 1.63% of insurable earnings up to the maximum insurable earnings of $68,900 (Employment and Social Development Canada / CRA, 2026). In Quebec the rate is 1.3%, because Quebec's own QPIP plan pays parental benefits.
Two views. The pay stub view shows one regular pay period. The annual tax view shows the full year at the same pay, with CPP and EI counted up to their yearly maximums. On a real pay stub, CPP and EI stop once the year's maximum is reached, so late-year pays can be higher than earlier ones.
Not included: employer contributions (CPP and EI matching, provincial employer health taxes), taxable benefits, bonuses, commissions, vacation pay paid out separately, other deductions from pay, and any refund or balance owing when you file your return. Your employer's payroll may round differently.
Worked example
Take a $70,000 salary paid biweekly in Ontario, with the default TD1 claim amounts and no RRSP or union dues. Gross pay is $70,000 divided by 26 pays, which is $2,692.31. Federal tax is $279.93 and Ontario tax, including the Ontario Health Premium, is $148.28. CPP is $152.18, and CPP2 is $0.00, since CPP2 applies only to earnings above the YMPE of $74,600. EI is $43.88. Net pay is $2,068.04 per pay. In the annual tax view, total tax and contributions come to $16,213.19 and net pay to $53,786.81 for the year (CRA T4127, 2026).
Frequently asked questions
How much tax do I pay on $70,000 in Canada?
It depends on your province or territory and your TD1 claim amounts. In the Ontario example above, federal and provincial tax, CPP and EI total $16,213.19 for the year (CRA T4127, 2026). Choose your province in the calculator to see your own figures.
What is CPP2 on my pay stub?
CPP2 is the second additional Canada Pension Plan contribution: 4% on earnings between the YMPE of $74,600 and the YAMPE of $85,000 (CRA, 2026). It appears only once your earnings for the year pass the YMPE.
What is a TD1 form?
The TD1, Personal Tax Credits Return, tells your employer which tax credits to apply when taking tax off your pay. There is a federal TD1 and one for each province or territory; Quebec uses Revenu Québec form TP-1015.3-V. The calculator uses the basic personal amounts unless you enter other totals.
Is EI taken off every pay?
EI is taken off each pay until your insurable earnings for the year reach $68,900 (Employment and Social Development Canada / CRA, 2026). After that, no more EI is deducted for the rest of the calendar year.
How is pay taxed differently in Quebec?
Quebec tax is withheld under Revenu Québec rules, federal tax is reduced by the Quebec abatement of 16.5%, and QPP, QPIP and a lower EI rate of 1.3% apply instead of CPP and the standard EI rate. The Quebec salary calculator shows each line.
Why is my pay stub different from this estimate?
Common reasons are benefits, pension plan contributions, TD1 claim amounts other than the basic ones, or CPP and EI stopping after the yearly maximum. Enter your TD1 totals, and open "More deductions" for RRSP or union dues, to match your pay stub more closely.