Take-home pay in 2026: how it works, with a worked example

Questions people ask

Why is my actual paycheque different from this result?

This calculator assumes a single employee with only the basic personal amount claimed on the TD1 form, paid the same salary every period, with no pension plan, union dues, benefits or bonuses. Any of those change withholding. Employers in British Columbia, Newfoundland and Labrador and Prince Edward Island also used catch-up rates from July 2026 after mid-year tax changes, so second-half paycheques there are lower than the annual average.

Is this the tax I will owe, or the tax taken off my pay?

It is the amount withheld from your pay over a full year under the CRA's T4127 payroll formulas. For most salaried people with no other income or deductions, the tax withheld and the tax owed are the same, so no refund or balance is due. RRSP contributions, childcare, medical expenses and other income change the final bill when you file.

What is the difference between the marginal and average tax rate?

The marginal rate is the tax on your next dollar of income, which is what matters for a raise, overtime or an RRSP deduction. The average rate is total income tax divided by total income, which is what you actually pay overall. The marginal rate is always higher than the average rate in a progressive system.

Does this include CPP2, the second additional CPP contribution?

Yes. Since 2024, earnings between the year's maximum pensionable earnings ($74,600 in 2026) and the second ceiling ($85,000 in 2026) attract a 4% CPP2 contribution, up to $416. It appears as its own line when it applies. The enhanced portions of CPP are deducted from taxable income rather than credited, which the calculator also handles.

How is Quebec different?

Quebec employees pay QPP instead of CPP (6.30% in 2026), QPIP parental insurance premiums, and a lower EI rate (1.30%). Quebec collects its own income tax with its own brackets and a $18,952 basic personal amount, and the federal government reduces its tax by a 16.5% abatement to compensate. The calculator applies all of these when you pick Quebec.

Why does Ontario tax jump around $80,000 and $100,000?

Ontario adds two surtaxes on top of its basic tax: 20% of basic tax above $5,818 and a further 36% above $7,446 in 2026. It also charges the Ontario Health Premium, which steps up with income to a maximum of $900. Both are included, which is why Ontario's marginal rate can exceed the sum of the two bracket rates.

I'm self-employed. Can I use this?

Use the self-employed tax calculator instead. Self-employed people pay both halves of CPP (11.9% in 2026), do not pay EI unless they opt in, and get no Canada employment amount, so this calculator would overstate your take-home.

Does the calculator include my RRSP or pension contributions?

Yes, if you enter them. Open 'Deductions on my pay stub' and add your RRSP and pension percentages and any union dues. They come off before tax is calculated, so income tax falls; CPP and EI do not change. For a lump-sum RRSP contribution, the RRSP refund calculator shows the refund.

How much is $25 an hour per year, and what is that after tax?

$25 an hour for 40 hours a week over 52 weeks is $52,000 a year before tax. Switch the calculator to 'By the hour', enter your wage and hours, and it shows the yearly, monthly, bi-weekly and after-tax hourly figures for your province.

Why does my paycheque get bigger later in the year?

CPP and EI stop once you hit the yearly maximums ($4,230.45 plus $416 CPP2, and $1,123.07 EI in 2026). Above about $85,000 that happens partway through the year, and from that cheque on nothing more comes off for CPP or EI. The calculator tells you the month it happens and how much your cheque rises.

Do RRSP or pension contributions on my pay stub lower my tax?

Yes. Payroll RRSP, registered pension plan and union dues are deducted before tax is calculated, so they lower income tax immediately. They do not reduce CPP or EI, which are based on gross pay. Enter them under 'Deductions on my pay stub' to see the effect.

Can I see my partner's paycheque too?

Yes. Open the options under the form and enter your partner's yearly salary. The page then shows both paycheques side by side and the total you bring home together. Each of you is taxed on your own income, with your own brackets, basic personal amount and CPP and EI ceilings; Canada never combines a couple's salaries for income tax. Only the take-home amounts are added.

Is this the same as the CRA payroll calculator?

It uses the same T4127 formulas, annualized. The CRA's Payroll Deductions Online Calculator works one pay period at a time and asks for the same inputs; the results match to within rounding for a regular salary with the basic TD1 claim.