1. What Are Canadian Payroll Deductions?

Canadian payroll deductions consist of federal and provincial income taxes, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums. These mandatory deductions are calculated based on your income, province of residence, and other factors.

2. How Does the Calculator Work?

The calculator uses current tax brackets and rates to estimate:

Where:

• Federal Tax — Calculated using progressive tax brackets
• Provincial Tax — Varies by province with different rates and brackets
• CPP — 5.95% of pensionable earnings up to maximum
• EI — 1.63% of insurable earnings up to maximum

3. Understanding Canadian Tax Brackets

Federal Tax Brackets (2023):

• 15% on first $53,359 of taxable income
• 20.5% on portion over $53,359 up to $106,717
• 26% on portion over $106,717 up to $165,430
• 29% on portion over $165,430 up to $235,675
• 33% on portion over $235,675

4. Using the Calculator

Instructions: Enter your annual salary before taxes and select your province of residence. The calculator will estimate your deductions based on current rates.

5. Frequently Asked Questions (FAQ)

Q1: Are these calculations exact?
A: This provides estimates only. Actual deductions may vary based on additional factors like tax credits, bonuses, or other income.

Q2: What's the difference between CPP and EI?
A: CPP is for retirement benefits while EI provides temporary income support for unemployed workers.

Q3: Why does province matter for taxes?
A: Each province has its own tax rates and brackets in addition to federal taxes.

Q4: Are there other deductions not shown here?
A: Yes, some employers may deduct benefits, union dues, or other voluntary amounts.

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