Payroll deduction calculator
Updated
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.
The deduction arithmetic is the easy part; remitting on the right schedule is where penalties come from. How payroll is run here, or ask which remitter type you are.
If these figures differ from your payroll software, settle the gap before the next remittance; that is what running payroll for you prevents.
Opens your own email app with the numbers filled in — add your question and a CPA replies, usually the same business day.
Estimates for general information, not tax advice. Rates and rules change, and we confirm the numbers for your situation once we review your enquiry.
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.
On this page
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 pay cheque: Canada Pension Plan contributions, employment insurance premiums and income tax. The employer matches CPP, pays EI at 1.4 times the employee premium (unless a reduced rate is approved), and has no share of income tax. Both sides go to the CRA through your payroll program account.
How the income tax figure is built
The CRA annualises each pay period: it multiplies the pay by the periods in the year, works out federal and provincial tax after the basic personal amount and the CPP, EI and Canada employment credits, then divides back. That is why switching from biweekly to semi-monthly changes the tax per cheque at the same annual pay, and why a one-off bonus needs its own calculation.
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. This is not the CRA payroll deduction calculator itself, though it follows the same method and the T4127 rates described above.
The parts a calculator cannot see
CPP has an annual exemption and ceiling, stopping at the maximum and restarting on 1 January. A full-year calculator cannot know about a September start, a provincial move or a ceiling reached with another employer. Taxable benefits, RRSP deductions at source and union dues also change the tax. Use this as a check on your software, and reconcile year-to-date totals before the T4s go out.
What sits outside the CRA remittance
BC employers also pay WorkSafeBC premiums and, above $1,000,000 of BC remuneration, the Employer Health Tax, outside the payroll account. See the payroll remittance calculator for due dates and how the RP account works, or we run payroll for you.
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 the payroll deduction calculator not account for?+
How do I use this alongside my remittance schedule?+
How much salary to run through payroll is a separate question: see the salary vs. dividends calculator, and make sure paying a spouse a salary is defensible first.
Related reading
What happens when you get in touch
If the numbers here are a monthly chore rather than a one-off check, this is what handing it over looks like.
- A free thirty-minute conversation. What you do, what is filed and what is overdue. You leave with a fixed fee in writing and no obligation to take it.
- Access, in the first week. We are authorized with the CRA, so notices and balances get looked up rather than requested from you. If you are switching firms, your file is requested the same week.
- Current, then ahead. Books set up or brought current, anything overdue scheduled oldest year first, and the next twelve months of deadlines set before they arrive.
Send an enquiry, or ask one question first — both go to a CPA, not a queue.
Who this is for, and who it is not
This is for checking one pay run quickly. It is not a payroll system: when remittances, T4s and the year-end summary all have to line up, payroll we run is the cheaper answer than a calculator and a spreadsheet. A payroll deductions calculator answers what to withhold from one cheque; it does not track remittance dates, T4s or year-to-date totals.
Where we work
One fee everywhere. We serve Abbotsford businesses, the Chilliwack valley, Langley, Mission, the Fraser Valley and the Lower Mainland.
Want these numbers confirmed for your business?
Send an enquiry to a Fraser Valley CPA. We will check the figures against your actual situation and quote a fixed fee.
Have a question about this?
Ask free through the quick-question form; a CPA replies by email within one business day. A 45-minute paid Advice Call is $225 plus GST, booked by email and credited to your first invoice if you become a client within 60 days. Want us to take it on? Send an enquiry.
“…He is very knowledgeable and has saved me tons in taxes by restructuring my group of companies — the best accountant I've worked with in the last 10 years, after switching from three different firms.”
Want the reading behind the numbers? The payroll hub covers remittance schedules, T4 deadlines and paying yourself.