How net pay is estimated
We work out the whole year first: federal and provincial income tax on your annual pay, then CPP (QPP in Quebec), EI and, in Quebec, QPIP. Each amount is divided by the number of pay periods.
Pay periods are 52 (weekly), 26 (every two weeks), 24 (twice a month) or 12 (monthly). An hourly wage is multiplied by the hours per week and by 52.
The 2026 contribution caps apply to the year: CPP stops once you reach the annual maximum and EI stops at $1,123.07 of premiums. In real payroll these caps cut in part-way through the year, so late-year cheques are larger than this even-split estimate.
2026 payroll contributions
| Item | Employee rate | 2026 limit |
|---|---|---|
| CPP (base + first additional) | 5.95% above $3,500 | Up to $74,600 of earnings · max $4,230.45 |
| CPP2 (second additional) | 4% | $74,600 to $85,000 · max $416.00 |
| EI (outside Quebec) | 1.63% | First $68,900 · max $1,123.07 |
| EI (Quebec) | 1.30% | First $68,900 |
| QPP / QPIP (Quebec) | 6.3% above $3,500 / 0.43% | QPIP on the first $103,000 |
CPP, CPP2 and EI figures are from the CRA. Quebec’s QPP and QPIP figures could not be checked on a Revenu Québec page by our tools; see “How we check”.
What this leaves out
- Employer-specific deductions: group benefits, pension plan, union dues, parking.
- Extra TD1 claims (tuition, spouse or dependants, disability) that lower your withholding.
- Bonuses and commissions, which are often withheld at a different rate.
- Credits you claim when you file, such as donations, child care and medical costs.
- Provincial, municipal or sector payroll levies other than those listed above.
Frequently asked questions
Why is my actual paycheque different?
Employers use the CRA’s payroll formulas for each pay period, your TD1 forms and their own benefit deductions. This tool spreads the year’s tax evenly instead, so the two will rarely match to the dollar.
Does it include employer contributions?
No. Employers pay a matching CPP amount and 1.4 times your EI premium on top of your gross pay, but those do not reduce your take-home. The CPP and EI contributions calculator shows them.
How are hourly wages handled?
Hourly pay is turned into an annual amount using your hours per week × 52, then divided by your pay periods. Overtime is not included.
Is tax withheld the same as tax owed?
No. Withholding is an advance on your final tax. If you have other income, deductions or credits, you may receive a refund or owe more when you file.
Does this work in Quebec?
Yes. It uses QPP instead of CPP, the lower Quebec EI rate and QPIP. Quebec parameters could not be machine-verified, so treat the result as an estimate.
Last updated
Related tools
Sources
- CRA: Tax rates and income thresholds (current year)
- CRA: 2026 TD1 personal tax credits returns
- CRA: T4032 payroll deductions tables
- CRA: CPP contribution rates, maximums and exemptions
- CRA: Second additional CPP contribution (CPP2)
- CRA: EI premium rates and maximums
Revenu Québec’s pages block automated checks and are not linked.
How we check
Income tax uses the same engine as the income tax calculator, which is compared with the CRA’s 2026 T4032 constants. Employee CPP and EI are checked against the CRA’s published 2026 maximums; the Alberta $30,000 case is recomputed by hand in the test suite.
Limits: we did not compare with the CRA’s payroll deductions online calculator, and we spread the year evenly instead of using per-period formulas. Quebec’s QPP, QPIP and EI rate come from published summaries, not an official page we could fetch.