1. What is Net Salary?

Net salary is the amount an employee takes home after all deductions. In Canada, these deductions include federal and provincial income taxes, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• Gross Salary — Total annual salary before deductions
• Federal Tax — Progressive tax rates (15% up to $55,867, etc.)
• Provincial Tax — Varies by province (e.g., 5.05% first bracket in Ontario)
• CPP — 5.95% of pensionable earnings up to maximum
• EI — 1.66% of insurable earnings up to maximum

3. Canadian Tax Deductions

Federal Tax: Progressive rates from 15% to 33% based on income brackets.
Provincial Tax: Each province has its own tax rates and brackets.
CPP: Mandatory pension contribution (5.95% in 2023).
EI: Employment insurance premium (1.66% in 2023).

4. Using the Calculator

Instructions: Enter your gross annual salary in CAD and select your province of residence. The calculator will estimate your net salary after all standard deductions.

5. Frequently Asked Questions (FAQ)

Q1: Are these calculations exact?
A: This provides an estimate. Actual deductions may vary based on specific tax credits, additional deductions, or special circumstances.

Q2: What's the difference between gross and net salary?
A: Gross salary is your total earnings before deductions, while net salary is what you actually receive after all deductions.

Q3: Why does province matter for tax calculations?
A: Each Canadian province has its own tax rates and brackets, significantly impacting your net salary.

Q4: Are CPP and EI deducted from all income?
A: CPP is deducted only up to the maximum pensionable earnings ($66,600 in 2023). EI is deducted up to maximum insurable earnings ($61,500 in 2023).

Q5: How often are tax brackets updated?
A: Tax brackets are typically adjusted annually for inflation by the CRA.