Key takeaways
- Your paycheque has five main deductions: federal tax, provincial tax, CPP (QPP in Quebec), EI and, in Quebec, QPIP
- In 2026 the lowest federal tax rate is 14% on income up to $58,523
- CPP is 5.95% of pay between $3,500 and $74,600, plus CPP2 of 4% up to $85,000
- EI is 1.63% of pay up to $68,900 (1.30% in Quebec)
- Your employer matches your CPP and pays 1.4 times your EI on top of your salary
What comes off your paycheque in Canada
Your employer must take money off each paycheque and send it to the government. These are called source deductions. For most employees there are four or five:
- Federal income tax, paid to the Canada Revenue Agency (CRA).
- Provincial or territorial income tax. The CRA collects it for every province except Quebec. In Quebec, Revenu Québec collects it.
- Canada Pension Plan (CPP), or the Quebec Pension Plan (QPP) if you work in Quebec. This builds your public pension.
- Employment Insurance (EI). This pays benefits if you lose your job, have a baby or get sick.
- Quebec Parental Insurance Plan (QPIP), in Quebec only. It pays parental benefits instead of EI.
Other deductions, such as a company pension, health benefits or union dues, depend on your job. They are not in this calculator.
2026 CPP, EI and QPIP rates
| Deduction (2026) | Employee rate | Earnings covered | Maximum per year |
|---|---|---|---|
| CPP (outside Quebec) | 5.95% | $3,500 to $74,600 | $4,230.45 |
| QPP (Quebec) | 6.30% | $3,500 to $74,600 | $4,479.30 |
| CPP2 or QPP2 | 4% | $74,600 to $85,000 | $416.00 |
| EI (outside Quebec) | 1.63% | Up to $68,900 | $1,123.07 |
| EI (Quebec) | 1.30% | Up to $68,900 | $895.70 |
| QPIP (Quebec) | 0.430% | Up to $103,000 | $442.90 |
Once you reach the maximum for the year, the deduction stops. That is why many people see a bigger paycheque in the fall. If you change jobs, your new employer starts again from zero; you get any overpayment back when you file your tax return.
2026 federal tax brackets
Canada uses marginal tax rates. Each rate applies only to the part of your income inside that bracket.
| Taxable income (2026) | Federal rate |
|---|---|
| Up to $58,523 | 14% |
| $58,523 to $117,045 | 20.5% |
| $117,045 to $181,440 | 26% |
| $181,440 to $258,482 | 29% |
| Over $258,482 | 33% |
The federal basic personal amount is $16,452 for most people, so roughly the first $16,000 of income is tax-free. Each province also has its own brackets and basic amount. For example, Alberta’s basic amount is $22,769 and Ontario’s is $12,989. Ontario also adds a surtax and the Ontario Health Premium, which is up to $900 a year.
To see how much tax you pay on your next dollar of income, use the marginal tax rate calculator.
How this calculator works
- It works out your CPP or QPP, CPP2 and EI (and QPIP in Quebec) from the 2026 rates above.
- It removes the “enhanced” part of your CPP and all of CPP2 from your income, because those parts are tax-deductible.
- It applies the 2026 federal and provincial brackets, then subtracts the basic personal amount, the Canada employment amount ($1,501) and the credits for CPP and EI.
- In Quebec it reduces federal tax by the 16.5% Quebec abatement.
- It adds the Ontario surtax and Health Premium, or subtracts the BC tax reduction for lower incomes.
We use full-year 2026 rates. Some provinces changed rates on July 1, 2026, and payroll software uses a special rate for the second half of the year so the full-year total comes out right. Your paycheque in the fall may therefore differ a little from this estimate, but your tax for the year should be close.
Not included: low-income tax reductions (except BC’s), RRSP or union dues deductions, benefits such as group insurance, and other credits. Your actual tax is settled when you file your tax return.
Worked example: $60,000 in Ontario
- CPP: 5.95% × ($60,000 − $3,500) = $3,361.75
- EI: 1.63% × $60,000 = $978.00
- Federal tax: about $5,338 after credits
- Ontario tax and Health Premium: about $2,382 + $600
- Take-home pay: about $47,340 a year, or $1,821 every two weeks
The same salary leaves about $47,755 in BC, $47,691 in Alberta and $45,053 in Quebec. Quebec has higher provincial tax but a lower federal tax because of the abatement.
What your job costs your employer
Your employer pays more than your salary. By law it must:
- Match your CPP or QPP contribution, dollar for dollar.
- Pay 1.4 times your EI premium (2.282% of insurable pay outside Quebec in 2026, 1.82% in Quebec).
- In Quebec, pay QPIP at 0.602%.
Depending on the province and company size, the employer may also pay a provincial payroll or health tax, such as the Ontario Employer Health Tax, the Manitoba Health and Post-Secondary Education Tax Levy or the Quebec Health Services Fund, plus workers’ compensation premiums. These depend on total payroll and industry, so the calculator does not include them.
If you are self-employed you pay both halves of CPP yourself. See the self-employed tax calculator.