The TD1 is a Personal Tax Credits Return form you fill out for your employer. It tells them how much federal and provincial tax to withhold from each paycheque. If you don't submit one, your employer withholds maximum tax.

Paycheck Calculator

Canadian Net Pay
Calculator 2025

Q: How is net pay calculated in Canada?

Net pay is your gross pay minus federal income tax, provincial income tax, CPP contributions, and EI premiums. Each deduction is calculated separately based on 2025 CRA rates and then subtracted from your gross pay.

Q: Do I pay CPP on every dollar I earn?

No. CPP contributions only apply on earnings between $3,500 (the basic exemption) and $71,300 (the 2025 YMPE). You pay 5.95% on earnings in that range, up to a maximum of $4,034.10 per year.

See your exact take-home pay per paycheque — federal tax, provincial tax, CPP, and EI broken down line by line.

Updated for 2025 · CRA rates verified

Your pay details

Annual Salary

Province

Pay Frequency

Employment Type

—

Annual Take-Home

—

Total Deductions

—

Effective Rate

—

Per Pay

Pay Stub Bi-Weekly Pay Period

Earnings

Gross Pay —

Deductions

Federal Income Tax —

Provincial Tax —

CPP Contribution —

CPP2 Contribution —

EI Premium —

Total Deductions —

NET PAY —

Marginal Tax Rate (combined federal + provincial)

0%—54%

ℹ️ Estimates only. Verify with CRA. Self-employed pay both employer + employee CPP (11.9%) and no EI.

What gets deducted from your paycheque?

Every Canadian employee has four mandatory deductions taken from each pay period. Here's what each one is and how it's calculated for 2025.

Deduction	2025 Rate	Applies To	Annual Maximum
Federal Income Tax	15% – 33%	All employment income	No cap
Provincial Income Tax	Varies by province	All employment income	No cap
CPP Employee	5.95%	Earnings $3,500 – $71,300	$4,034.10
CPP2 Employee	4.00%	Earnings $71,300 – $81,900	$428.00
EI Premium	1.66%	All insurable earnings	$1,090.62

Frequently Asked Questions

How is net pay calculated in Canada?

Net pay is your gross pay minus four deductions: federal income tax, provincial income tax, CPP contributions, and EI premiums. Each is calculated based on your annualized income, then divided per pay period. The basic personal amount ($16,129 federal) is applied as a non-refundable tax credit before calculating tax.

What is the difference between bi-weekly and semi-monthly pay?

Bi-weekly means paid every two weeks — 26 pay periods per year. Semi-monthly means paid twice per month (e.g. 1st and 15th) — 24 pay periods per year. Bi-weekly pay periods result in slightly larger individual paycheques, and two months per year you receive 3 paycheques instead of 2.

Do I pay CPP on every dollar I earn?

No. CPP only applies on earnings between the basic exemption ($3,500) and the YMPE ($71,300 in 2025). Earnings below $3,500 and above $71,300 are exempt from regular CPP. The new CPP2 applies on earnings between $71,300 and $81,900 at 4%.

What does self-employed change?

Self-employed Canadians pay both the employee and employer share of CPP — effectively 11.9% instead of 5.95% — since there's no employer to cover the other half. They also do not pay EI premiums (and cannot claim regular EI benefits, though they can opt in for special benefits like maternity leave).

Related Calculators

What Gets Deducted From Your Paycheque in Canada?

Every Canadian employee has several mandatory deductions taken off their gross pay before they receive their net (take-home) pay. Understanding exactly what's being deducted — and why — helps you verify your pay stub is correct and plan your finances more accurately.

The three main deductions are federal and provincial income tax, CPP contributions, and EI premiums. Together these typically account for 20%–35% of gross income for most Canadians earning between $40,000 and $120,000 per year.

CPP Contributions — 2026 Rates

The Canada Pension Plan (CPP) is a mandatory contributory retirement program. Employees contribute 5.95% of pensionable earnings — that's your income between the basic exemption ($3,500) and the Year's Maximum Pensionable Earnings ($71,300 in 2026). The maximum employee CPP contribution for 2026 is $4,034.10.

Your employer matches your CPP contribution dollar-for-dollar. So while you contribute $4,034.10, your employer also contributes $4,034.10 on your behalf. Self-employed Canadians pay both the employee and employer portions — totalling 11.9% — which is why self-employed CPP costs nearly double.

Starting in 2024, CPP2 (the enhanced second tier) added an additional contribution of 4% on earnings between $71,300 and $73,200. This is a small additional amount — maximum $73 per year — but it builds additional CPP benefits on top of the base pension.

EI Premiums — 2026 Rates

Employment Insurance (EI) provides temporary income replacement if you lose your job through no fault of your own, go on maternity or parental leave, or face certain other qualifying situations. The 2026 employee EI premium rate is 1.66% of insurable earnings, up to a maximum insurable amount of $65,700. The maximum employee EI premium for 2026 is $1,090.62.

Employers pay 1.4 times the employee rate — so for every dollar of EI you contribute, your employer contributes $1.40. Some employers with approved wage-loss replacement plans may qualify for a reduced EI rate.

How Income Tax Is Withheld From Your Pay

Your employer uses the CRA's payroll deduction tables to estimate how much income tax to withhold from each pay period. This estimate is based on your TD1 form — the Personal Tax Credits Return you fill out when you start a job. Your TD1 tells your employer which tax credits to apply, including the Basic Personal Amount and any other credits you're entitled to claim.

At year end, you file your T1 tax return, which reconciles your actual tax owing against what was withheld. If too much was withheld throughout the year, you get a refund. If too little was withheld, you owe the difference. Updating your TD1 when your circumstances change — new dependants, tuition credits, RRSP contributions — can reduce the amount withheld each pay period so you're not giving CRA an interest-free loan all year.

Pay Period Frequencies — Weekly, Bi-weekly, Semi-monthly, Monthly

Canadian employers use several pay frequency options. Bi-weekly (every two weeks, 26 pays per year) is the most common in Canada. Semi-monthly (twice per month, 24 pays per year) is also common, particularly in professional and government roles. Weekly (52 pays) is more common in hourly and trades roles. Monthly (12 pays) is less common but used in some sectors.

The pay frequency affects your per-period deduction amounts but not your annual total. A bi-weekly employee earning $80,000 receives $3,076.92 gross per pay period. A monthly employee with the same salary receives $6,666.67 per period. Annual CPP, EI, and tax are the same either way — just spread across different numbers of cheques.

What Is Net Pay vs Gross Pay?

Gross pay is your salary or hourly wages before any deductions. Net pay is what actually lands in your bank account after income tax, CPP, and EI are removed. Most Canadians think of their salary in gross terms but budget in net terms — which is why knowing your exact net pay matters for rent, mortgage qualification, and monthly cash flow planning.

For a typical Ontario employee earning $75,000 in 2026, gross monthly pay is $6,250. After approximately $1,320 in income tax, $330 in CPP, and $91 in EI, net monthly pay is roughly $4,509 — about 72% of gross. Use our calculator above to get your exact numbers.

Canadian Net PayCalculator 2025