Canada take-home pay guide 2026: how your paycheque is worked out

Most Canadians never see the arithmetic behind their paycheque. Your employer’s payroll software does it every payday, using formulas the Canada Revenue Agency (CRA) publishes for the purpose, and what is left after the deductions is your take-home pay. This guide walks through each deduction for the 2026 tax year, which in Canada is the calendar year: federal income tax, provincial or territorial income tax, Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums, plus the different system in Quebec.

The rates below come from the CRA’s 2026 payroll formulas (guide T4127) and Revenu Québec’s guide TP-1015.F-V. Every dollar amount is calculated live by the Canada income tax calculator.

The short version

On a $75,000 salary in Ontario, paid every two weeks, you take home $2,189 a paycheque, or $56,926 over the year. Four deductions make up the difference:

• federal income tax of $8,259;
• Ontario income tax of $4,446, which includes the Ontario Health Premium;
• CPP contributions of $4,230, plus $16 of the second contribution, CPP2;
• EI premiums of $1,123.

Together they take 24.1% of the salary.

The per-paycheque column spreads the year’s deductions evenly. Real paycheques move a little during the year: CPP and EI stop once you reach the yearly maximum, so on this salary the last few paycheques of the year are larger than the first ones.

Federal income tax

Federal tax is charged in brackets. Each rate applies only to the part of your taxable income that falls in its band, so moving into a higher bracket never raises the tax on the income below it. For 2026 the federal rates are:

2026 is the first full year at the lower bottom rate of 14%; the cut took effect part-way through 2025.Canada Revenue Agency↗ The same rate is used for most federal credits, so the cut also makes each credit slightly smaller.

For payroll, taxable income is your salary less any RRSP or registered pension plan contributions your employer takes from your pay, and less the “enhanced” part of your CPP contributions (the first additional CPP and CPP2), which is deducted from income rather than claimed as a credit. Our guide to Canadian tax brackets in 2026 sets out every federal and provincial band.

The basic personal amount and other credits

Canada’s brackets start at the first dollar. What keeps low incomes out of tax is a set of non-refundable credits, each worth the lowest tax rate multiplied by an amount. The largest is the basic personal amount: $16,452 for 2026, reduced gradually to $14,829 as net income rises from $181,440 to $258,482.

Employees also get the Canada employment amount of $1,501, and credits for the base part of their CPP contributions and for their EI premiums. Each province has its own basic personal amount on top. On an $18,000 salary in Ontario, no income tax is deducted at all: federal tax is $0 and Ontario tax is $0. CPP and EI still apply.

Your employer uses the credits you list on your TD1 forms, one federal and one provincial. The figures in this guide assume you claim only the basic personal amounts, which is claim code 1. Claiming more, such as an amount for a spouse, an eligible dependant, a disability or tuition, lowers the tax taken from each paycheque. If you have two jobs at once, you normally claim the personal amounts with only one employer.

Provincial and territorial tax

Every province and territory sets its own brackets, rates and credits. Outside Quebec, the CRA collects provincial tax together with federal tax, and your employer deducts both from each paycheque using the province where you work.

The differences are large. Ontario’s rates start at 5.05%, Alberta’s at 8% with a basic personal amount of $22,769, and Nova Scotia’s top rate is 21%. On a $75,000 salary, provincial or territorial tax ranges from $2,553 in Nunavut to $7,948 in Nova Scotia. The salary after tax guide compares take-home pay in every province and territory.

Some provinces add their own pieces, all of which the calculator includes:

• Ontario adds a surtax when basic Ontario tax passes $5,818, and the Ontario Health Premium of up to $900 a year. A tax reduction removes Ontario tax on low incomes.Government of Ontario↗
• British Columbia has a tax reduction of up to $690 for lower incomes.
• Alberta has a supplemental credit for people whose non-refundable credits are worth more than the tax on the whole of its first bracket.
• Yukon has its own employment amount, matching the federal one.

British Columbia, Prince Edward Island and Newfoundland and Labrador changed their 2026 rules part-way through the year. The figures here use the full-year 2026 rules. From July 2026, employers apply adjusted rates for the rest of the year so that the year’s total comes out the same.Canada Revenue Agency↗

CPP and CPP2

CPP is 5.95% of your pay between the $3,500 basic exemption and the year’s maximum pensionable earnings (YMPE) of $74,600. The most an employee pays in 2026 is $4,230.45. CPP2 is a second contribution of 4% on earnings between $74,600 and the year’s additional maximum pensionable earnings (YAMPE) of $85,000, up to $416.Canada Revenue Agency↗ Your employer pays the same amount again on top of your salary.

CPP lowers your income tax a little. The base part of your contribution earns a credit at the lowest rate, and the enhanced part is deducted from your income. The guide to CPP and EI in 2026 covers both contributions in more detail, including self-employment.

EI premiums

EI premiums are 1.63% of insurable earnings up to $68,900, so the most you pay in 2026 is $1,123.07. Your employer pays 2.282% on the same earnings.Canada Revenue Agency↗ Like CPP, your EI premiums earn a federal credit and, outside Quebec, a provincial one.

How Quebec is different

Quebec runs more of its own system than any other province. If you work in Quebec:

• Quebec income tax is set and collected by Revenu Québec, not the CRA, with rates from 14% to 25.75% and a basic personal amount of $18,952. Quebec payroll also allows a deduction for workers of 6% of pay, up to $1,450.
• Federal tax is cut by the Quebec abatement of 16.5%, because Quebec funds some programs that federal tax pays for elsewhere.
• The Quebec Pension Plan (QPP) replaces CPP, at 6.3% on the same earnings band, up to $4,479.30.
• EI is cheaper, at 1.3%, because Quebec pays its own parental benefits through the Quebec Parental Insurance Plan (QPIP).
• QPIP premiums are 0.43% of earnings up to $103,000.Revenu Québec↗

On $75,000 the result is a take-home pay of $53,965 a year in Quebec, against $56,926 in Ontario.

Withholding is not your final tax bill

Everything above is what your employer deducts at source, worked out with the payroll formulas. It is not the tax you finally owe. That is settled on your income tax and benefit return after the year ends, and it can come out higher or lower because:

• Credits you claim only on the return are not in the payroll figures: medical expenses, charitable donations and tuition you didn’t put on your TD1, among others.
• Provincial low-income reductions are applied on the return, not on your paycheque. Examples include Ontario’s Low-income Individuals and Families Tax (LIFT) credit and the low-income reductions in New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island and Manitoba. Neither the payroll formulas nor our calculator include them, so people on lower incomes in those provinces may get some of their withholding back.
• Other income, such as interest, investment income, rent or self-employment income, has no tax taken from it at source.
• RRSP contributions you make yourself, outside payroll, reduce your tax on the return. The RRSP tax savings guide shows how much.
• Pay that changes during the year, such as a raise, a bonus or time off, means the deductions on each paycheque won’t add up exactly to the tax for the year.

If too much was withheld, the CRA (and Revenu Québec in Quebec) refunds the difference after you file. If too little was, you pay the balance.

Why your paycheque might not match

If your own pay stub differs from these figures, one of these is usually why:

• Your TD1 claim. Extra credits lower your tax; asking for additional tax to be deducted raises it.
• Other deductions. Pension plan contributions, group benefits, union dues and taxable benefits such as an employer-paid life insurance premium all change your net pay.
• Bonuses and overtime. Employers use a separate method for bonuses and other one-off payments, so the tax on that paycheque can look high.
• The yearly maximums. Once your CPP and EI for the year are paid in full, your paycheques get bigger until January.
• Pay frequency. Two biweekly paycheques add up to less than one monthly paycheque, and some years have an extra biweekly payday.

Work out your own take-home pay

Enter your salary, province or territory and pay frequency to see your own 2026 take-home pay. Under the advanced options you can add RRSP or pension contributions taken from your pay.

To convert your pay to an hourly rate, use the salary to hourly calculator. For CPP and EI alone, including your employer’s share, there is the CPP and EI calculator, and for sales tax on what you buy, the guide to GST and HST rates in 2026.

These figures are estimates of the tax and contributions deducted from regular pay in 2026, calculated from the CRA’s and Revenu Québec’s published formulas. They are not tax advice and are not the final tax on your return.