How to Read Your Pay Stub in Canada

Why Your Pay Stub Matters

Your pay stub is more than a receipt — it's a detailed record of how your gross pay becomes your net (take-home) pay. Understanding each line helps you catch errors, plan your finances, and know exactly where your money goes.

Gross Pay

This is your total earnings before any deductions. It may include:

Regular pay — your salary or hourly wages for the pay period
Overtime — hours worked beyond the standard (usually 1.5× your hourly rate)
Bonuses or commissions — additional compensation
Vacation pay — if paid out rather than banked

If you're salaried at $75,000/year, your gross pay on a bi-weekly stub is $75,000 ÷ 26 = $2,884.62.

Statutory Deductions

These are mandatory. Your employer withholds them and remits to the government on your behalf.

1. Federal Income Tax

Calculated using Canada's progressive brackets. Your employer estimates your annual tax and divides it across pay periods. At $75,000, expect roughly $400–$500 per bi-weekly pay withheld for federal tax, depending on your TD1 personal tax credits.

2. Provincial Income Tax

Same concept as federal, but using your province's brackets. This varies significantly — Alberta withholds less than Ontario or Quebec for the same salary.

3. CPP (Canada Pension Plan)

Rate: 5.95% on earnings between $3,500 and $74,600
Maximum annual contribution: $4,230.45
At $75,000, you'll hit the max partway through the year. Early paycheques deduct more; late-year ones deduct less or nothing.

4. CPP2 (Enhanced CPP)

Rate: 4.0% on earnings between $74,600 and $85,000
Maximum: $416.00/year
Only applies if you earn above $74,600. At $75,000, your CPP2 for the year is just $16.00.

5. EI (Employment Insurance)

Rate: 1.63% (or 1.295% in Quebec)
Maximum insurable earnings: $68,900
Maximum annual premium: $1,123.07 (or $892.46 in Quebec)

6. QPIP (Quebec Only)

If you work in Quebec, you also pay into the Quebec Parental Insurance Plan at 0.494% on earnings up to $98,000 (max $484.12/year). This is why Quebec's EI rate is lower — QPIP covers parental benefits instead.

Voluntary Deductions

These are amounts you've opted into:

RRSP contributions — reduces your taxable income
Pension plan — employer-sponsored RPP contributions
Union dues — if applicable
Extended health/dental — group benefit premiums
Life or disability insurance — employer group plans

Year-to-Date (YTD) Totals

Most stubs show cumulative totals for the calendar year. Check these against your T4 slip at tax time — they should match.

Net Pay

This is what lands in your bank account: Gross Pay − All Deductions = Net Pay.

For a $75,000 salary in Ontario, a typical bi-weekly net pay is approximately $2,170 after all deductions.

Common Stub Errors to Watch For

Wrong province — if you moved, your employer may still be using old provincial rates
Missing TD1 credits — if you didn't file a TD1 form, your employer may withhold too much tax
CPP still deducting in December — if you've already hit the annual max, no more should be deducted
Incorrect hours — for hourly workers, verify hours match your records

Calculate Your Own

Use the PayCalc calculator to see a full breakdown of deductions for any salary, province, and pay frequency. Compare the numbers to your actual pay stub to make sure everything lines up.