1. What is Net Salary?

Net salary (take-home pay) is the amount an employee receives after all deductions from their gross salary. In Ontario, deductions include federal tax, provincial tax, CPP, EI, Ontario Health Premium, and surtax.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Federal Tax - Progressive rates from 15% to 33%
• Ontario Tax - Progressive rates from 5.05% to 13.16%
• CPP - Canada Pension Plan (5.95% of pensionable earnings)
• EI - Employment Insurance (1.66% of insurable earnings)
• Health Premium - Ontario-specific health tax
• Surtax - Additional Ontario tax on basic provincial tax

3. Ontario Tax Deductions Explained

Details: Ontario has some unique deductions including the Health Premium (scaled based on income) and Surtax (additional tax on provincial tax). These make Ontario's total tax burden higher than many other provinces.

4. Using the Calculator

Tips: Enter your annual gross salary in Canadian dollars. The calculator will show your net salary and a breakdown of all deductions based on 2024 rates.

5. Frequently Asked Questions (FAQ)

Q1: Are these calculations exact?
A: They're estimates based on standard deductions. Your actual paycheck may differ due to other deductions (benefits, RRSP contributions, etc.).

Q2: How often are tax brackets updated?
A: Tax brackets are typically adjusted annually for inflation. This calculator uses 2024 rates.

Q3: What's the CPP exemption amount?
A: The first $3,500 of earnings is exempt from CPP contributions.

Q4: Do all Ontarians pay the Health Premium?
A: Those earning under $20,000 pay nothing. The premium scales up to $900 for most middle-income earners.

Q5: Why is Ontario's tax higher than other provinces?
A: Ontario combines federal tax with its own provincial tax, health premium, and surtax, resulting in higher total deductions.