How we calculate Canada take-home pay

Defaults

• Tax year 2026; Ontario unless you pick British Columbia or Alberta; paid every two weeks from 2 January; claim code 1 (basic personal amounts only); this job is your only income.

Your pay (CRA T4127 payroll formulas, as used by CRA's PDOC)

1. CPP: 5.949999999999999% of pay above the per-pay share of the $3,500 exemption, until the $4,230.45 yearly maximum. CPP2: 4% of pensionable pay between $74,600 and $85,000 for the year so far. EI: 1.63% until the $1,123.07 maximum.
2. Annual taxable income = pay per period × pays per year, less the enhanced CPP part (first additional CPP and CPP2).
3. Federal and provincial tax from the rate tables, less credits (basic personal amount, CPP base and EI at the lowest rate, the Canada employment amount), plus Ontario surtax and Health Premium less the Ontario tax reduction; the BC tax reduction; the Alberta supplemental credit.
4. Divide by the number of pays and round to the cent. Every pay of the year is worked out in order, so CPP and EI stop once maxed (and BC changes rates for pays from 1 July), and the year is the sum of the pays.

Your tax return

Tax for the year on the salary (with the 2026 BC rate of 5.60% and $690 reduction, and Ontario's LIFT credit), compared with the tax withheld, gives the expected refund or balance owing.

Known limits

• Quebec and the other provinces and territories are not covered yet.
• TD1 claims beyond the basic amounts, RRSP or pension deductions at source, union dues, bonuses and taxable benefits are not modelled.

Every release is tested against cases from the official calculator: see accuracy tests. Rate changes are logged in the changelog.