Understanding net salary in Canada 2026
In payroll, net salary is the amount actually paid after mandatory deductions: federal tax, provincial/territorial tax, and social contributions (CPP or QPP, Employment Insurance, and QPIP in Quebec). This page provides an educational estimate: it explains the mechanisms and gives an order of magnitude.
This page provides an educational estimate: it explains the mechanisms and gives an order of magnitude.
The calculation logic can be summarized as follows:
Annual net salary = Annual gross salary
− Federal tax
− Provincial/territorial tax
− Pension contributions (CPP/QPP)
− Employment Insurance (EI)
− QPIP (if Quebec)
Across Canada, provincial income tax is generally collected by the Canada Revenue Agency through payroll withholding. The main exception is Quebec, where Revenu Québec administers and collects both federal and provincial income tax.
⚠️ Keep in mind: your actual pay stub may differ depending on your credits (TD1),
taxable benefits, RRSP contributions, bonuses,
commissions, overtime, union dues, and other specifics.
2026 tax tablesCRA
Rates + K constant
Federal income tax refers to the tax applied to taxable gross income in Canada. The federal tax table is identical for all provinces and territories.
Provincial income tax is calculated separately based on the selected province or territory. Each jurisdiction applies its own tax brackets, rates, and constants.
Taxes are calculated using income brackets based on annualized taxable gross income. This income corresponds to gross income minus the Basic Personal Amount, which represents the portion taxed at 0%. For the current year, the maximum federal Basic Personal Amount (max BPA) is $16,452, and the minimum federal Basic Personal Amount (min BPA) is $14,829. Alberta’s provincial threshold is $22,769.
To simplify calculations, each tax bracket is expressed using the formula: tax rate minus constant K. The constant K integrates the tax already applied in previous brackets, allowing the correct amount to be obtained directly without recalculating each tier. This method is used in official payroll withholding calculations.
Example of bracket interpretation (before credits): for an annualized taxable income of $65,000, the calculation falls within the federal 20.5% bracket, with a constant K of $3,804.
| Income bracket |
Rate |
K |
| 58 523 $ or less |
14 % |
0 |
| 58 523.01 $ to 117 045 $ |
20.50 % |
3 804 |
| 117 045.01 $ to 181 440 $ |
26 % |
10 241 |
| 181 440.01 $ to 258 482 $ |
29 % |
15 685 |
| 258 482.01 $ or more |
33 % |
26 024 |
| Income bracket |
Rate |
K |
| 54 345 $ or less |
14 % |
0 |
| 54 345.01 $ to 108 680 $ |
19 % |
2717 |
| 108 680.01 $ to 132 245 $ |
24 % |
8 151 |
| 132 245.01 $ or more |
25.75 % |
10 465 |
This calculator applies the specific brackets and non-refundable tax credits authorized by the federal and provincial governments
Federal Basic Personal Amount (BPA) - minimum vs maximum
In Canada, the Basic Personal Amount (BPA) is a non-refundable federal tax credit that reduces federal tax payable. It effectively protects a portion of income from federal taxation by applying the lowest federal marginal rate to the BPA.
The BPA exists in two versions: a maximum BPA of 16,452 $ for low to mid incomes and a minimum BPA of 14,829 $ for high incomes. Between these values, the BPA is gradually reduced as income increases, with a phase-out range from 181,440 $ to 258,482 $.
-
Maximum BPA: generally applies if your net income is below the phase-out threshold. It
provides the largest credit.
-
Minimum BPA: applies to high incomes (above the upper threshold). Even at very high income,
you keep at least this credit.
-
Between the two: the BPA is reduced progressively from the maximum toward the minimum
according to a formula.
Not to be confused: each province also has its own basic personal amount, which reduces
provincial tax separately from the federal BPA.
Additional 2026 information - thresholds and rates
Based on the 2026 Canadian federal and provincial/territorial income tax brackets and the applicable basic personal amounts. Calculations reflect the combined tax structure in effect for the selected jurisdiction.
CPP / QPP - base plan
-
Applicable range:
Pensionable earnings, generally between the annual exemption of 3 500 $ and the maximum
pensionable earnings
(YMPE) of 74 600 $.
-
Employee rate:
CPP 5.95% (outside Quebec) ·
QPP 6.30% (Quebec).
CPP2 / QPP - additional plan
-
Applicable range:
Earnings above the YMPE (74 600 $) up to the additional maximum
(AYMPE) of 85 000 $.
-
Employee rate:
4.00%.
Dynamic display: if annual salary is ≤ 74 600 $, this contribution does not apply.
EI (Employment Insurance)
-
Maximum insurable earnings:
68 900 $.
-
Employee rate:
1.63% (outside Quebec) · 1.30% (Quebec).
QPIP - parental insurance (Quebec)
-
Maximum insurable earnings:
103 000 $.
-
Employee rate:
0.430%.
This contribution applies only if the province is Quebec.
Federal Basic Personal Amount (BPA)
-
Maximum: 16 452 $ ·
Minimum: 14 829 $.
-
Non-refundable credit, phased down between 181 440 $ and 258 482 $ of annual income.
FAQ - Net Pay / Take-Home Pay in Canada (CAN) 2026
How do I convert gross to net salary in Canada for 2026?
Gross to net salary in Canada for 2026 is estimated by subtracting federal and provincial income tax, CPP contributions, and EI from your gross pay. This calculator applies standard CRA payroll withholding tables to estimate deductions per pay period; final tax is reconciled when you file.
What is the difference between net salary and after-tax income?
Net salary and after-tax income mean the same thing: the amount you actually receive after all deductions. This salary calculator shows your real take-home pay after federal and provincial or territorial taxes, CPP or QPP, and EI or QPIP.
What is my marginal tax rate in Canada?
Your marginal tax rate is the percentage of tax you pay on the last dollar you earn. It is used to calculate taxes on raises or bonuses and is always higher than your average tax rate (total tax divided by total income).
Why is my take-home pay lower after overtime or a bonus?
Take-home pay is often lower after overtime or a bonus because payroll systems annualize the higher pay and temporarily withhold more tax. A one-time higher cheque can be treated as if it repeats all year, increasing withholding for that pay period; your final tax is corrected at filing time.
Why did my CPP or EI deductions stop mid-year on my paycheque?
CPP or EI deductions can stop mid-year because you reached the annual contribution maximum. Once the year-to-date maximum is reached, payroll stops withholding for the remainder of the year and restarts in January when the caps reset.
