Payroll deduction calculator
Reviewed by EverStone CPA · July 2026
Quick answer: Enter one employee's gross pay and see the CPP, EI and income tax to withhold, the employer's matching contributions, and the total that has to reach the CRA.
Estimates for general information — not tax advice specific to your situation. Rates and rules change and your result depends on details a calculator cannot capture. We confirm the numbers for your circumstances in a free consult.
Nothing you type here leaves your browser. This calculator runs entirely on your device — no figures are sent to us or to anyone else.
What comes off an employee’s pay, and what does the employer have to remit?
An employer running payroll, and any incorporated owner paying themselves a salary. It calculates statutory deductions. It does not handle taxable benefits, garnishments, union dues, or additional tax requested on a TD1.
A worked example
These are the numbers already in the calculator above, so you can follow the arithmetic against the result it is showing.
| Step | Figure |
|---|---|
| Method | The CRA T4127 payroll deductions formulas |
| CPP | 5.95% to the $74,600 year’s maximum pensionable earnings |
| CPP2 | 4% on earnings between $74,600 and $85,000 |
| EI | $1.63 per $100 to $68,900 of insurable earnings; the employer pays $2.28 |
| Federal first bracket | 14% for 2026 |
| Basic personal amount | $16,452, with the Canada employment amount at $1,501 |
What it assumes, and where it stops
Every estimate rests on assumptions. These are the ones that would change your number most.
| Assumption | What it means for your number |
|---|---|
| Standard TD1 claim codes | An employee who has claimed additional credits, or asked for extra tax to be withheld, will not match. |
| No taxable benefits in the gross | A company vehicle, employer-paid insurance or a housing allowance all add to pensionable and taxable income before this calculation begins. |
| Per-period ceilings | CPP and EI stop once the annual maximums are reached, so late-year cheques deduct less. A single-period calculation cannot see that. |
| It is the employee side plus the employer match | The employer also remits its own CPP and 1.4× the EI. That is a real cost of a salary and belongs in the salary-versus-dividend decision. |
General information, not advice. Have a CPA confirm it for your situation
What a pay run actually owes the CRA
Three statutory amounts come off a Canadian pay cheque: Canada Pension Plan contributions, employment insurance premiums and income tax. Two of the three cost the employer as well. The corporation matches CPP dollar for dollar, and pays EI at 1.4 times the employee premium unless a reduced rate has been approved. Income tax is withheld only — there is no employer share. Add the employee deductions to the employer contributions and you have the amount that must reach the CRA through your payroll program account.
How the income tax figure is built
The CRA does not tax a pay cheque in isolation. Its published method annualises the pay period — multiply the pay by the number of periods in the year — works out the federal and provincial tax on that annual figure after the basic personal amount and the CPP, EI and Canada employment credits, then divides the answer back by the number of pay periods. That is why moving an employee from biweekly to semi-monthly changes the tax on each cheque even when annual pay is identical, and why a one-off bonus needs its own calculation rather than being dropped into a regular run.
This tool follows the same method, using the rates in CRA guide T4127, Payroll Deductions Formulas, 123rd edition, effective 1 July 2026. It assumes the basic personal amount only. An employee who has claimed tuition, a spouse, or an eligible dependant on their TD1 will have less tax withheld than shown here.
The parts a calculator cannot see
CPP has an annual basic exemption and an annual ceiling, so contributions stop once an employee reaches the maximum — and start again on 1 January. A calculator that assumes a full year at a steady wage cannot know an employee started in September, changed provinces, or already hit the ceiling with a previous employer. Taxable benefits, RRSP contributions taken at source and union dues all move the tax figure too. Treat the result as a check on your payroll software rather than a replacement for it, and reconcile against year-to-date totals before the T4s go out.
What sits outside the CRA remittance
British Columbia employers also carry WorkSafeBC premiums and, above $1,000,000 of annual BC remuneration, the Employer Health Tax. Neither goes through the payroll account. Once you know the total per pay run, the payroll remittance calculator tells you when it is due, and how the RP account works explains the mechanics. If you would rather not run any of it, we run payroll as part of a monthly engagement.
Free to use on your own site — the snippet keeps a credit link back to this page.
Payroll Deduction Calculator FAQ
Are these the same numbers the CRA’s own calculator produces?+
Why does British Columbia use a 6.14% bottom rate here?+
When is an employee exempt from CPP or EI?+
What is CPP2 and why is it shown separately?+
Why is the employer EI figure larger than the employee’s?+
What does this calculator not account for?+
How do I use this alongside my remittance schedule?+
Deciding how much salary to run through payroll in the first place is a separate question — the salary vs. dividends calculator covers the trade-off for an owner-manager, and paying a spouse a salary has to be defensible before the deductions matter.
Want these numbers confirmed for your business?
A free consult with a Fraser Valley CPA — we will check the figures against your actual situation and quote a fixed fee.
Want the reading behind the numbers? The payroll hub covers remittance schedules, T4 deadlines and paying yourself.