Updated for July 1, 2026 · CRA T4127, 123rd edition
Payroll deductions calculator 2026
See exactly what comes off every paycheque in Canada: federal and provincial income tax, CPP, CPP2 and EI. Change anything and the result updates as you type.
Payroll calculators by province
Each page has the provincial brackets, example paycheques and the rules that only apply there.
What comes off a Canadian paycheque
Federal income tax uses five brackets, from 14% to 33% in 2026, minus credits for the basic personal amount, CPP, EI and the Canada employment amount.
Provincial or territorial tax depends on where the employee works, not where the employer is. Every province has its own brackets and credits, and some add extras like the Ontario Health Premium.
CPP and CPP2 fund the Canada Pension Plan. EI funds Employment Insurance. Both stop once the yearly maximum is reached, so paycheques get bigger late in the year.
Employers also pay their own share of CPP and EI on top of the gross pay. The calculator shows that cost too.
| Rate | Earnings | Max (employee) | |
|---|---|---|---|
| CPP | 5.95% | $3,500 – $74,600 | $4,230.45 |
| CPP2 | 4% | $74,600 – $85,000 | $416.00 |
| EI | 1.63% | up to $68,900 | $1,123.07 |
Employers match CPP and CPP2 dollar for dollar and pay 1.4 × the employee's EI premium (up to $1,572.30).
| Taxable income | Rate |
|---|---|
| Up to $58,523 | 14% |
| $58,523 – $117,045 | 20.5% |
| $117,045 – $181,440 | 26% |
| $181,440 – $258,482 | 29% |
| Over $258,482 | 33% |
The lowest federal rate is 14% for 2026 (it was 15% until mid-2025).
Questions
How are payroll deductions calculated in Canada?
Employers withhold four things from each paycheque: federal income tax, provincial or territorial income tax, Canada Pension Plan (CPP and CPP2) contributions and Employment Insurance (EI) premiums. Income tax is worked out by annualizing the pay, applying the federal and provincial brackets and credits from the employee's TD1 forms, and dividing by the number of pay periods.
What are the CPP and EI rates for 2026?
For 2026, employees pay 5.95% CPP on earnings between $3,500 and $74,600 (maximum $4,230.45), 4% CPP2 on earnings between $74,600 and $85,000 (maximum $416.00) and 1.63% EI on insurable earnings up to $68,900 (maximum $1,123.07). Outside Quebec.
Is this calculator the same as the CRA PDOC?
We implement the CRA's own payroll formulas (T4127, 123rd edition) and test them against the CRA's Payroll Deductions Online Calculator (PDOC): 214 of 214 test paycheques across 13 provinces and territories, three pay frequencies and five salaries match to the cent. For Quebec we use Revenu Québec's formulas (TP-1015.F-V) and also check Quebec tax, QPP and QPIP against its WebRAS calculator. The PDOC and WebRAS are still the official tools.
Why does my paycheque get bigger near the end of the year?
Because CPP and EI have yearly maximums. On a $90,000 salary paid biweekly, EI reaches its maximum on pay 20 and CPP on pay 22 of 26. After that only CPP2 (4%) is withheld, so the net paycheque goes from $2,549.06 to $2,793.57 until January.
Does it work for Quebec?
Yes. For Quebec employees the calculator withholds Quebec income tax with Revenu Québec's formulas, the Quebec Pension Plan (QPP) instead of CPP, Quebec Parental Insurance Plan (QPIP) premiums and EI at the lower Quebec rate of 1.3%. Federal tax is reduced by the 16.5% Quebec abatement.
Paycheque or paycheck?
"Paycheque" is the Canadian spelling and "paycheck" the American one. They mean the same thing: the pay you receive each pay period after deductions.