How Is Your Canadian Paycheck Calculated?

Your take-home pay in Canada is your gross pay minus five main deductions: federal income tax, provincial income tax, Canada Pension Plan (CPP) premiums, Employment Insurance (EI) premiums, and any other deductions (group benefits, union dues, etc.).

Key 2026 Deduction Rates

• CPP contribution rate: 5.95% on earnings between $3,500 and $71,300 (maximum annual employee contribution: ~$4,034)
• CPP2 (second additional): 4% on earnings between $71,300 and $81,900
• EI premium rate: 1.64% on insurable earnings up to $63,200 (maximum annual employee premium: ~$1,037)
• Federal basic personal amount: $16,129 (no federal tax on income below this)

Province Matters

Your provincial tax rate significantly affects take-home pay. Alberta residents keep the most of their paycheck (no sales tax, flat 10% provincial rate). Quebec residents have the highest provincial deductions but also receive provincial parental insurance (QPIP) benefits.