What deductions does a Canadian paycheque include?

The calculator estimates CPP, or QPP in Quebec, the CPP2 contribution if earnings exceed the maximum, Employment Insurance (EI), QPIP in Quebec, and federal and provincial income tax. Subtracting those deductions from gross gives net pay. Rates as of 2026-01-01.

What calculation method does it use?

The simplified annual method. One period's gross is annualized, the annual deductions are computed once, then divided back by the number of pay runs. This is simpler than CRA's exact T4127 formula, which prorates maximums per period.

Is this accurate enough to run real payroll?

No. It is an estimating and planning tool, not a payroll engine. It does not use CRA's official formula or the Revenu Quebec tables, and every rate is an indicative figure to be confirmed. For compliant payroll, use Odoo Payroll.

How is Quebec handled differently?

For Quebec, the calculator automatically applies QPP instead of CPP, adds QPIP as a separate deduction with a lower EI rate, and reduces the federal tax withheld through the Quebec abatement.

What is the CPP2 or QPP2 contribution?

It is the second additional pension contribution, applied to a band of earnings above the ordinary maximum pensionable earnings. It only appears for higher salaries and stays at zero below that threshold.

Is the employer portion included?

No. The calculator shows only the employee portion, the part that reduces net pay. The employer separately remits its own share of CPP, EI, and QPIP, which does not show on the pay stub and is not computed here.

How do I move from this estimate to real payroll?

Configure Odoo Payroll with Canadian salary rules, T4 and RL-1 slips, and CRA and Revenu Quebec remittances. Our guide on Canadian payroll in Odoo covers the setup, and an Octura architect can implement it.

Free Tool · Updated June 20, 2026

What gets deducted from a Canadian paycheque?

CPP or QPP, EI, QPIP in Quebec, federal and provincial income tax, and net pay, across all 13 provinces and territories. Built by Octura's Odoo architects. No email required.

Every deduction, at onceCPP or QPP, EI, QPIP in Quebec, and federal and provincial tax, computed together down to net pay.
All 13 provinces and territoriesPick a province, and Quebec automatically switches in QPP, QPIP, and the federal abatement.
Per period or annualizedEnter one pay period's gross and the frequency, get deductions per pay run and for the year.

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Estimate only. This is not the exact CRA formula and not tax advice. Rates as of 2026-01-01.

Gross Pay per Period Gross amount paid each pay run (CAD)

Pay Frequency Number of pay runs per year

Province or Territory Quebec applies QPP, QPIP, and the federal abatement

Pay Period Number (optional) For reference; does not change the simplified annual method

CPP / QPP exemptEI exempt

Net Pay per Period$1,573.0226 pay runs per year

Total Deductions per Period$426.98Annualized net $40,898.52

Per periodAnnualized

CPP$110.99$2,885.75

EI$32.80$852.80

Federal tax$206.95$5,380.65

Provincial tax$76.24$1,982.28

Total deductions$426.98$11,101.48

Net pay$1,573.02$40,898.52

Annualized gross$52,000.00

Simplified annual method: gross is annualized, annual deductions are computed, then divided by the number of pay runs. The employer portion, the exact T4127 formula, and taxable benefits are not included. For real payroll, configure Odoo Payroll.

Set Up Odoo Payroll →

How This Calculator Works

You enter one pay period's gross pay, the frequency, and the province. The calculator annualizes the gross (gross times the number of pay runs), computes the annual deductions once, then divides them back by the number of pay runs for a per-period figure. This is the simplified annual method. It gives a clean, stable estimate, but it is not the exact CRA formula.

CRA publishes the official formula in the T4127 guide, which prorates maximums per period and carries year-to-date amounts. Our annualized approach is simpler and built for planning, not for producing a T4 slip. Every rate shown is an indicative 2026 figure pending confirmation.

CPP, EI, and Income Tax Explained

CPP (Canada Pension Plan). A contribution on earnings between the $3,500 basic exemption and the year\'s maximum pensionable earnings. Above that maximum, the CPP2 second contribution applies on a further band. EI (Employment Insurance). A percentage of insurable earnings, capped at an annual maximum. Income tax. Computed in brackets, federal then provincial, after the basic personal amount reduces the tax owed.

These three deductions, added together, make up the difference between gross and net. That is the employee portion. The employer also remits its own share of CPP and EI, which does not appear on the pay stub and is not computed here.

What Is Different in Quebec

When you pick Quebec, the calculator changes three things automatically. QPP instead of CPP. The Quebec Pension Plan replaces CPP, at a slightly higher rate. QPIP. The Quebec Parental Insurance Plan is a separate deduction, and Quebec\'s EI rate is lower as a result. Federal abatement. Quebec residents receive an abatement that reduces the federal tax withheld, because Quebec collects a larger share of income tax itself.

What This Calculator Does Not Cover

It does not compute the employer portion of CPP, EI, and QPIP, or provincial payroll taxes. It does not use CRA's exact T4127 formula or the Revenu Quebec tables. It ignores taxable benefits, extra TD1 personal amounts, union dues, garnishments, and pension plan contributions. Treat the result as a planning reference, not an official pay stub.

From Estimate to Real Payroll in Odoo

An estimate is a starting point. Real payroll needs the exact salary rules, T4 and RL-1 slips, CRA and Revenu Quebec remittances, and year-over-year compliance. Odoo Payroll handles all of it. See our guide on Canadian payroll in Odoo (CPP, EI, T4, RL-1), then talk to an architect to configure it properly.

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Frequently Asked Questions

01What deductions does a Canadian paycheque include?
The calculator estimates CPP, or QPP in Quebec, the CPP2 contribution if earnings exceed the maximum, Employment Insurance (EI), QPIP in Quebec, and federal and provincial income tax. Subtracting those deductions from gross gives net pay. Rates as of 2026-01-01.
02What calculation method does it use?
The simplified annual method. One period's gross is annualized, the annual deductions are computed once, then divided back by the number of pay runs. This is simpler than CRA's exact T4127 formula, which prorates maximums per period.
03Is this accurate enough to run real payroll?
No. It is an estimating and planning tool, not a payroll engine. It does not use CRA's official formula or the Revenu Quebec tables, and every rate is an indicative figure to be confirmed. For compliant payroll, use Odoo Payroll.
04How is Quebec handled differently?
For Quebec, the calculator automatically applies QPP instead of CPP, adds QPIP as a separate deduction with a lower EI rate, and reduces the federal tax withheld through the Quebec abatement.
05What is the CPP2 or QPP2 contribution?
It is the second additional pension contribution, applied to a band of earnings above the ordinary maximum pensionable earnings. It only appears for higher salaries and stays at zero below that threshold.
06Is the employer portion included?
No. The calculator shows only the employee portion, the part that reduces net pay. The employer separately remits its own share of CPP, EI, and QPIP, which does not show on the pay stub and is not computed here.
07How do I move from this estimate to real payroll?
Configure Odoo Payroll with Canadian salary rules, T4 and RL-1 slips, and CRA and Revenu Quebec remittances. Our guide on Canadian payroll in Odoo covers the setup, and an Octura architect can implement it.