Understanding net salary in Northwest Territories 2026
Payroll withholding is calculated using CRA tables specific to Northwest Territories. The calculator shows you the 'standard' net pay. However, many Northwest Territories residents qualify for significant deductions (Zone A/B). The Payroll Tax (2%) you might hear about is primarily levied on the employer, but some contracts pass it on.
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)
The Northwest Territories use the federal tax infrastructure for income tax collection. The CRA administers deductions, while the territory controls fiscal parameters.
⚠️ 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
In the Northwest Territories in 2026, the tax system aims to offset the high cost of living in the North. This starts with a generous Basic Personal Amount of $18,198, which is nearly $2,000 more than the federal exemption.
Territorial tax rates are extremely competitive. The first bracket levies only 5.90% on income up to $53,003. This is one of the lowest base rates in Canada, leaving maximum liquid cash in workers' pockets.
The system comprises four brackets in total. For income from $53,003 to $106,009, the rate is 8.60%. The maximum marginal rate caps at only 14.05% for all income exceeding $172,346.
Just like in the Yukon and Nunavut, the federal Northern Residents Deduction plays a crucial role here, reducing the tax base even before the 5.90% or 8.60% rates apply. CPP and EI contributions remain standard.
Concrete example: With a $95,000 salary in Yellowknife, you will only pay 8.60% territorial tax on your highest income. Your effective average tax rate will remain below the 25% mark.
| 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 |
Provincial 2026
Northwest Territories
| 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 |
We use the 2026 Northwest Territories payroll deduction formulas, including the indexed personal amounts and territorial brackets.
Federal Basic Personal Amount (BPA) - minimum vs maximum
In the Northwest Territories, the federal BPA operates as a tax relief mechanism, lowering federal tax payable through a non-refundable credit.
In 2026, the BPA declines from 16,452 $ to 14,829 $ as income rises, within the 181,440 $ to 258,482 $ range. The territorial basic amount is 18,198 $, providing additional local relief.
-
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
While the payroll deduction looks standard, the effective tax rate in Northwest Territories is often much lower after filing taxes due to the Northern Residents Deduction (Zone A/B) and the Cost of Living credit.
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 Northwest Territories (NT) 2026
What is the 2% payroll tax in the Northwest Territories?
This is a unique feature of the NWT tax system. If you work in the Northwest Territories, a 2% tax is applied to your gross salary. Unlike other provinces where this type of tax is paid by the employer, here it is deducted directly from the employee’s pay.
I work in a mine in the NWT but live in the South. Do I still have to pay the 2%?
Yes. The 2% payroll tax applies to anyone who physically works in the territory, regardless of their province of residence. This ensures that fly-in, fly-out workers contribute to the local economy.
How does the cost of living tax credit help me?
To offset the 2% payroll tax and the high cost of living, NWT residents receive a refundable tax credit (the Cost of Living Tax Credit) when they file their annual tax return.
