How SalaryAndTax calculates your take-home pay

Every figure on SalaryAndTax comes from a single calculation. It starts with your gross employment income and runs it through the federal and provincial rules for the tax year you pick, in the same order the CRA's own forms apply them. We walk you through that order, list every rate and threshold the calculator uses, and explain how we check the results and where the calculator deliberately keeps things simple.

What the calculator covers

SalaryAndTax estimates income tax, CPP and EI for a single filer with employment income only, living in Ontario, British Columbia or Alberta on December 31. It covers the 2026 and 2025 tax years. That's the situation most people are in when they're reading a job offer or weighing a raise, and keeping to it is what lets every number be checked line by line against the tax forms.

It doesn't account for:

• Deductions such as RRSP or FHSA contributions, union dues or child care expenses
• Income other than employment: self-employment, investments, rental or pension income
• Credits for a spouse or dependants, age, disability, tuition or medical expenses
• Refundable benefits such as the Canada Workers Benefit or the GST/HST credit
• Quebec, and the provinces and territories beyond Ontario, B.C. and Alberta

If any of these apply to you, your actual tax will be different, and usually lower, since most of them are deductions or credits.

From gross pay to take-home, step by step

The calculation follows the same sequence as a tax return. Here is the order, with the figures for 2026:

1. CPP and EI. CPP is 5.95% of your earnings between $3,500 and $74,600, plus a second tier, CPP2, of 4% on earnings from $74,600 up to $85,000. EI is 1.63% of earnings up to $68,900. Both stop once you reach the yearly maximum: $4,646.45 for CPP and CPP2 together, and $1,123.07 for EI.
2. Taxable income. Part of your CPP contribution is deducted from your income before tax is calculated. The rest of your CPP, and your EI, become tax credits in the next two steps.
3. Federal tax. Taxable income runs through the federal brackets, from 14% on the first $58,523 to 33% on income over $258,482. Non-refundable credits then come off at 14%: the basic personal amount ($16,452, reduced gradually to $14,829 for incomes between $181,440 and $258,482), the Canada employment amount ($1,501), and the rest of your CPP plus your EI.
4. Provincial tax. The same pattern again, using your province's brackets and basic personal amount, with credits valued at the province's lowest rate.
5. Provincial extras. Ontario adds a surtax: 20% of Ontario tax above $5,818, plus a further 36% above $7,446. Lower incomes then get the Ontario tax reduction and the LIFT credit (up to $875), and the Ontario Health Premium adds up to $900. In B.C., the tax reduction credit takes up to $690 off and phases out by about $45,000 of income. Alberta has none of these.
6. Take-home. Your gross pay, minus federal tax, provincial tax, CPP and EI.

Every salary page walks through this same order with real numbers, and $85,000 in Ontario is a good place to see it end to end.

Annual figures and your paycheque

Per-paycheque figures are the annual result divided evenly across your pay periods. Your employer's payroll works pay by pay instead, so CPP and EI come off every cheque until you reach the yearly maximum and then stop, which makes your last few paycheques of the year a little larger. Each paycheque page shows when that happens. Payroll withholding is also only an estimate of your annual tax, so any difference between what was withheld and what you owe shows up as a refund or a balance at tax time.

The true marginal rate

Most calculators report your marginal rate as the federal and provincial bracket rates added together. That's the tax on your next dollar only if nothing else changes, and in Canada something else often does: credits phase out, the Ontario surtax starts, the Health Premium steps up, and CPP and EI stop.

SalaryAndTax measures it directly instead. It calculates your take-home pay, calculates it again with $100 more, and reports how much of that $100 goes to tax, CPP and EI. This is the true marginal rate, and it can be quite different from the bracket rate. In Ontario at $45,000, the bracket rates add up to 19.1%, but the true marginal rate is 30.1%, higher than the 29.6% at $90,000. CPP and EI account for part of the gap, and the rest is the LIFT credit shrinking by 5% of every dollar earned over $32,500.

A higher marginal rate never means a raise costs you money. It means you keep less of each extra dollar, and that's the number worth knowing when you're weighing overtime, a raise or a new offer.

How we check the numbers

Every page, chart, PDF statement and share card on the site uses the same calculation, so a figure can't disagree with itself from one page to the next.

We check that calculation against two independent calculators, the TaxTips.ca detailed tax calculator and Wealthsimple's tax calculator, at 59 salaries across all three provinces and the 2025 and 2026 tax years. The cases run from low incomes, where the credits phase out, up to $400,000. All 124 figures we checked match within $15, and income tax matches to within $1.55. Where the two calculators disagreed with each other, we traced the difference back to the specific line on the tax form before accepting either one.

We also check that your take-home pay never goes down when your salary goes up, at every $500 step from $0 to $400,000, in every province and year.

If a figure on the site doesn't match what you expected, tell us. We check every report against the tax forms, and if the calculator is wrong, we fix it and re-run every check above.

Rounding and where you live

The tax forms round at certain lines, while SalaryAndTax carries cents all the way through, so a result can differ from a filed return by a dollar or two. Provincial tax depends on the province you lived in on December 31, which is how the CRA treats it too: if you move partway through the year, the whole year is taxed by your new province.

The figures behind every calculation

These are the rates and thresholds the calculator uses. The 2026 figures come first, with earlier years folded below.

The figures come from the CRA and the provinces:

• CRA: Canadian income tax rates for individuals
• CRA: Payroll deductions tables (T4032)
• Ontario: Low-income individuals and families tax credit
• British Columbia: Basic tax credits
• TaxTips.ca: Alberta tax rates

Keeping it current

Tax figures change every January, and sometimes in between. B.C.'s Budget 2026 raised the province's lowest tax rate from 5.06% to 5.6%, a policy change rather than the usual inflation adjustment, and exactly the kind of update that's easy to miss. Each November and December, when the CRA and the provinces publish the next year's numbers, we add the new tax year, re-run the full validation against the independent calculators, and only then make it the default. The figures on this site were last updated on October 30, 2026.

Not tax advice

SalaryAndTax is an estimate to help you plan, whether you're reading an offer, weighing a raise or comparing provinces. It isn't tax advice, and it isn't a substitute for filing software or a tax professional who knows your full situation. The numbers are carefully checked, and the point of this page is to show exactly how, so you can decide how much weight to put on them.