Canadian Payroll Deductions Calculator
Calculate the CPP, EI, and income tax withheld from each pay period. Enter your year-to-date gross to see accurate remaining room and employer cost breakdown for the 2026 or earlier tax years.
2026 Payroll Rates at a Glance
CPP Rate
5.95%
CPP2 Rate
4.00%
EI Rate
1.63%
EI Rate (QC)
1.30%
Payroll Details
Per-Period Deductions
Effective Deduction Rate
22.0%
Annualized Gross
$60,000
Annualized Summary
Employer Cost
Employers match CPP contributions 1:1 and pay EI at 1.4× the employee rate. This is the true cost of employment beyond the employee's gross pay.
How it works: Tax is calculated by annualizing your per-period gross (less any RRSP contributions), computing federal and provincial income tax using CRA payroll tables, then dividing by the number of pay periods. CPP and EI are also annualized to avoid under-deduction when gross per period falls below the basic exemption threshold. When a YTD gross is provided, CPP and EI are computed incrementally — only the marginal contribution for this pay period is shown, and progress bars reflect how much room remains before each annual maximum. Employer costs reflect the mandatory CPP match and the 1.4× EI multiplier.
How Canadian Payroll Deductions Work
- Income tax — Your employer withholds federal and provincial income tax each pay period by annualising your gross pay, applying the relevant tax brackets and credits (including the Basic Personal Amount), then dividing by the number of pay periods. Withholding is an estimate; your actual tax is determined when you file your T1 return.
- Canada Pension Plan (CPP) — CPP1 is deducted at 5.95% on pensionable earnings above the $3,500 annual basic exemption, up to the YMPE of $74,600 for 2026. Once the YMPE is reached, CPP2 applies at 4% on earnings up to $85,000. Employers match both CPP1 and CPP2 contributions dollar-for-dollar.
- Employment Insurance (EI) — EI is deducted at 1.63% (1.30% in Quebec) on insurable earnings up to the maximum insurable earnings of $68,900 for 2026. Employers pay 1.4 times the employee premium. Quebec residents pay less EI because they also contribute to the Quebec Parental Insurance Plan (QPIP) separately.
Why Use Year-to-Date Gross?
CPP and EI are subject to annual ceilings — once your cumulative earnings cross the YMPE ($74,600 for CPP1) or maximum insurable earnings ($68,900 for EI), deductions stop for the rest of the year. Entering your year-to-date gross lets this calculator determine exactly how much room remains in the current pay period, so the result reflects your actual take-home rather than a start-of-year estimate. This is particularly useful for employees who receive mid-year raises, bonuses, or who switch employers.
What Employers Pay
Employers are required to remit their own share of CPP and EI on top of employee wages. For CPP, employers match the employee contribution at a 1:1 ratio — if an employee contributes $3,868 in CPP1 over the year, the employer contributes another $3,868. For EI, employers pay 1.4× the employee premium, meaning a $1,000 employee EI contribution triggers a $1,400 employer contribution. This employer share is a direct payroll cost not visible in your pay stub but factored into the total cost of employment. The calculator shows the full employer cost breakdown so you can understand your true employment cost to your employer.
Frequently asked questions
How are payroll deductions calculated in Canada?
Canadian payroll deductions consist of income tax, CPP, and EI. Income tax is withheld based on your annualised pay using federal and provincial brackets. CPP is deducted at 5.95% on pensionable earnings up to the YMPE of $74,600 for 2026. EI is deducted at 1.63% (1.30% in Quebec) on insurable earnings up to $68,900 for 2026.
When do CPP and EI deductions stop during the year?
CPP1 stops once year-to-date earnings reach the YMPE of $74,600 for 2026. CPP2 applies at 4% on earnings between $74,600 and $85,000, then stops at that second ceiling. EI stops once year-to-date insurable earnings reach $68,900. After these ceilings are met, your take-home pay increases for the remaining pay periods of the year.
How much does my employer pay for CPP and EI?
Employers match CPP contributions at a 1:1 ratio — the same 5.95% (CPP1) and 4% (CPP2) rates as the employee. For EI, employers pay 1.4× the employee premium. These employer contributions are on top of your salary and add roughly $4,000–$5,000 per year to the employment cost for a $75,000 salary. The calculator shows both employee deductions and total employer cost.
Are payroll deductions different in Quebec?
Yes. Quebec residents pay a lower federal EI rate of 1.30% instead of 1.63% because they contribute to the Quebec Parental Insurance Plan (QPIP) separately. Federal income tax for Quebec residents is also reduced by a 16.5% Quebec Abatement, as Quebec administers its own provincial income tax through Revenu Québec. Provincial tax rates in Quebec range from 14% to 25.75%.
What is CPP2 and who pays it?
CPP2 is the enhanced second tier of Canada Pension Plan contributions introduced in 2024. It applies at 4% on earnings between the YMPE ($74,600) and the YAMPE ($85,000) for 2026. Only employees with annual earnings above $74,600 pay CPP2. Employers match CPP2 at the same 4% rate. Once earnings exceed $85,000, no further CPP2 is deducted for the rest of the year.
How does year-to-date gross affect my deductions?
Year-to-date gross determines how much CPP and EI room remains. If your YTD earnings are near or above the CPP ceiling ($74,600) or EI ceiling ($68,900), your deductions for upcoming pay periods will be lower. Without YTD input, the calculator assumes you are at the start of the year. Entering your actual YTD gives a precise per-period deduction that reflects mid-year ceiling crossings from bonuses, raises, or multiple employers.
Sources
Related Calculators
Last updated April 2026. Reflects 2026 tax year rates.