Canada Take-Home Pay Explained (2026): Tax, CPP and EI

The salary on your Canadian job offer is the gross figure, before anything is taken off. What lands in your bank account is smaller, and the gap is made up of four parts: federal income tax, provincial income tax, Canada Pension Plan contributions, and Employment Insurance. The size of each depends on what you earn and which province you live in, so a $70,000 salary in Toronto nets a different amount than the same salary in Calgary. Here is how the 2026 numbers work.

The four deductions

Federal income tax runs in brackets. For 2026 the rates are 14 percent on the first $58,523, then 20.5 percent up to $117,045, 26 percent up to $181,440, 29 percent up to $258,482, and 33 percent above that. The 14 percent bottom rate applies for the full year, after the cut from 15 percent that took effect partway through 2025. The basic personal amount, a credit worth up to $16,452 of tax-free room, comes off the bill before you owe a cent.

Provincial income tax is charged on top, with its own brackets and its own basic personal amount in each province. Ontario starts at 5.05 percent, British Columbia at 5.60 percent, and Alberta at 8 percent.

Canada Pension Plan takes 5.95 percent of earnings between the $3,500 exemption and the first ceiling of $74,600. A second tier, CPP2, adds 4 percent on earnings between $74,600 and $85,000. The combined employee maximum for 2026 is $4,646.45.

Employment Insurance is 1.63 percent of insurable earnings up to $68,900, so the most you pay in 2026 is $1,123.07.

You can see all four worked out for your own salary and province with the Canada salary calculator, which handles Ontario, British Columbia and Alberta.

A worked example

Take someone earning $70,000 in Ontario. The CPP charge is $3,956.75 and EI is $1,123.07. Federal and Ontario income tax together come to about $11,134, which includes the $600 Ontario health premium at that income. That leaves roughly $53,786 a year, or about $4,482 a month, in the hand. The total deductions work out to about 23 percent of gross, so a little under a quarter of the salary goes to tax and contributions.

The headline rate looks higher than the real one because of how credits work. The 14 percent federal rate and Ontario’s 5.05 percent apply to the brackets, but the basic personal amounts, the $1,501 Canada employment amount, and the credits tied to CPP and EI all pull the effective rate down. Most middle earners pay an effective rate well below their top bracket.

Ontario take-home by salary

The table below runs several gross salaries through the same 2026 Ontario rules: federal and provincial income tax (including the Ontario health premium), CPP with the CPP2 top tier where it applies, and EI. It shows how the effective deduction rate climbs slowly as pay rises, because more of each extra dollar falls into higher brackets while the fixed credits stay the same.

Income tax here is federal plus Ontario, net of the basic personal amounts and the credits tied to CPP, EI and the Canada employment amount. Move to British Columbia or Alberta and the take-home shifts by a few hundred dollars a year at most incomes, because their provincial brackets and basic amounts differ. The CPP and EI columns are identical in every province outside Quebec.

How the provinces differ

Provincial tax is where take-home pay diverges most. Ontario layers a surtax on higher provincial tax and the health premium of up to $900 a year. British Columbia indexed its brackets by 2.2 percent for 2026 and raised its lowest rate to 5.60 percent, with the change phasing in through payroll from July, so early-2026 payslips there can understate the full-year bill. Alberta keeps a flat-feeling low end at 8 percent on the first $61,200. Quebec runs a separate system entirely, with its own pension plan and a provincial abatement, which is why a national average tells you little about any one paycheck.

If you are weighing a move between provinces or cities, the purchasing power tool helps you see what a salary is worth once local prices are folded in, and the inflation calculator shows how far a given income stretches over time.

CPP2 and the second ceiling

CPP2 catches people by surprise. Once your salary passes $74,600, the second tier adds 4 percent on the slice up to $85,000, which is up to an extra $416 a year. The whole CPP2 amount, along with the 1 percent enhanced slice of the base contribution, is deducted from your taxable income rather than earning a credit, so it lowers the tax you pay as well. If you change jobs mid-year, the CPP and EI maximums can reset, and you may overpay until you reconcile it on your return.

FAQ

What is the difference between gross and net pay in Canada? Gross is your salary before deductions. Net, or take-home, is what is left after federal and provincial income tax, CPP and EI. For a typical middle income the gap is around 20 to 30 percent.

Does everyone pay the same CPP and EI? The rates are the same across the country outside Quebec, but the dollar amount is capped. CPP stops at the $85,000 ceiling and EI at $68,900 of insurable earnings, so high earners pay the same fixed maximum as someone at the ceiling.

Why is my effective tax rate lower than my bracket? Brackets are marginal, so only the income inside each band is taxed at that band’s rate. Credits such as the basic personal amount reduce the total further, which is why the share of your whole salary that goes to tax is lower than your top rate.

Are these the 2026 figures? Yes. The brackets, basic personal amounts, CPP and EI rates here are the published amounts for the 2026 tax year, which runs from 1 January to 31 December 2026. Federal amounts are indexed 2.0 percent over 2025.

Sources: CRA indexation for 2026, CPP contribution rates and maximums, EI premium rates and maximums. This is general information, not tax advice.