Payroll Calculator Ontario: See Exactly Where Your 2026 Paycheque Goes
Estimate take-home pay after federal and provincial income tax, CPP, CPP2 and EI, plus what a hire really costs the employer. Updated with CRA rates effective January 1, 2026.
What This Employee Costs You
Excludes Employer Health Tax, WSIB premiums, vacation pay and benefits.
Get Full Payroll CostingDisclaimer: This calculator provides estimates for general information only, based on 2026 CRA rates for an employee in the province claiming the basic personal amounts (TD1 claim code 1), with income spread evenly across the year. It is not tax, accounting or legal advice. Actual payroll deductions depend on your TD1 elections, benefits, year-to-date maximums and other factors. For exact figures use the CRA Payroll Deductions Online Calculator, or contact Bestax for professional payroll services.
Why Use a Payroll Calculator for Ontario in 2026?
A provincial payroll calculator shows what actually reaches your bank account after federal tax, provincial tax, CPP, CPP2 and EI. In 2026, mandatory deductions take between 15% and 37% of gross pay depending on income, and knowing your number matters for offers, raises and budgets.
Your paycheque never matches your salary. Someone earning $75,000 takes home roughly $56,900 in 2026. About $18,100 disappears before the money ever lands in their account. The free calculator above shows exactly where every dollar goes: federal tax, provincial tax, CPP, CPP2 and EI, broken down per pay period.
The numbers changed again this year. According to the Canada Revenue Agency, the CPP maximum pensionable earnings rose to $74,600 for 2026 (up from $71,300), and EI maximum insurable earnings climbed to $68,900. The lowest federal tax rate also dropped to 14%. Small shifts, but they change every paycheque.
This guide explains what the calculator does, how each deduction actually works, and what an employee really costs on the employer's side, which is something most calculators skip entirely.
How Does the Payroll Calculator Work?
Enter your gross pay and pay frequency, and the calculator applies 2026 CRA rates to estimate federal tax, provincial tax, CPP, CPP2 and EI. It assumes the basic personal amounts (TD1 claim code 1) and shows net pay per period plus annual totals.
Behind the scenes, it runs the same logic CRA's payroll tables use:
- Annualizes your pay. A $2,900 bi-weekly salary becomes $75,400 per year.
- Calculates CPP and EI first. These come off gross pay before tax math starts.
- Applies the enhanced CPP deduction. Part of your CPP contribution reduces your taxable income, and most free calculators quietly skip this step.
- Runs federal and provincial tax brackets against taxable income, then subtracts your non-refundable credits.
- Adds the provincial extras. The surtax and the health premium, which can add up to $900 per year on its own.
- Divides everything back into your pay period.
That last point matters more than it sounds. Payroll deductions calculators that ignore the surtax and health premium can be off by $75+ per month for higher earners. Ours includes both.
What Deductions Come Off a Paycheque in 2026?
Every paycheque loses four mandatory amounts: federal income tax, provincial income tax, CPP contributions (including CPP2 for earnings above $74,600), and EI premiums. Your employer withholds all four and remits them to CRA on your behalf.
Here are the 2026 figures the calculator uses:
| Deduction | 2026 Rate | Applies To | Annual Maximum (Employee) |
|---|---|---|---|
| CPP (base) | 5.95% | Earnings between $3,500 and $74,600 | $4,230.45 |
| CPP2 (additional) | 4.00% | Earnings between $74,600 and $85,000 | $416.00 |
| EI premium | 1.63% | Earnings up to $68,900 | $1,123.07 |
| Federal tax | 14% – 33% | Five brackets, starting at 14% up to $58,523 | No cap |
| Provincial tax | 5.05% – 13.16% | Five brackets, starting at 5.05% up to $53,891 | No cap |
| Health premium | $0 – $900 | Taxable income above $20,000 | $900 |
Two things people consistently miss.
First, CPP and EI stop once you hit the annual maximum. Earn $120,000 and your CPP deductions end partway through the year, which is why paycheques often get bigger in the fall. Combined, a high earner pays at most $5,769.52 in CPP, CPP2 and EI for 2026.
And second: the health premium isn't a separate bill. It's collected through payroll as part of your provincial tax, maxing out at $900 once taxable income passes $200,600. Most people have no idea they're paying it.
Why Is My Take-Home Pay Lower Than the Tax Brackets Suggest?
Bracket rates only tell part of the story. CPP and EI take up to $5,770 before income tax even starts, the province adds a surtax of 20% to 56% on provincial tax above set thresholds, and the health premium stacks on top. Together they push your real deduction rate well past the headline bracket.
The provincial surtax is the sneaky one. It's a tax on your tax: 20% on provincial tax above $5,818, plus another 36% above $7,446 (2026 thresholds). Once your income passes roughly $110,000, your effective provincial rate is meaningfully higher than the 11.16% bracket rate printed in most tables.
That's why a payroll tax calculator you can trust needs to model the surtax explicitly rather than just stacking bracket rates. Run $150,000 through the calculator above and compare the provincial tax line against a basic bracket table. The difference is the surtax and health premium doing their quiet work.
There's some good news in 2026, though. The lowest federal rate fell to 14%, and the EI rate ticked down from 1.64% to 1.63%. Lower earners actually keep slightly more this year.
How Much Does an Employee Actually Cost an Employer in Ontario?
Employers pay well beyond gross salary. For 2026, they match every CPP and CPP2 contribution dollar-for-dollar and pay 1.4 times the employee's EI premium. On a $75,000 salary, that's roughly $5,900 in mandatory employer contributions before benefits, vacation pay, EHT or WSIB.
This is the section of the calculator that employers use most, and it sits in the dark "For Employers" card above. It shows total payroll cost, not just what the employee sees.
Budget around 1.08 to 1.15 times salary for the true cost of a hire, depending on your industry and benefits. Get that wrong across a ten-person team and you've misjudged your payroll budget by tens of thousands.
If you're hiring your first employee, the remittance side trips up more owners than the math does. CRA expects payroll deductions remitted by the 15th of the following month for new employers, and late remittances trigger penalties of 3% to 10%. Our payroll services team handles the whole cycle, including calculations, remittances and T4s, so that deadline never becomes your problem.
The mandatory employer stack:
- CPP match: up to $4,230.45 per employee (plus up to $416 for CPP2)
- EI at 1.4×: up to $1,572.30 per employee
- Employer Health Tax (EHT): 1.95% on payroll, though most private businesses get a $1,000,000 exemption, meaning many small businesses pay nothing
- WSIB premiums: industry-specific rates on insurable earnings, mandatory in most sectors
- Vacation pay: minimum 4% of wages (6% after five years of employment) under the Employment Standards Act
Is This Calculator as Accurate as CRA's PDOC?
For a standard salaried employee claiming basic personal amounts, the results closely match CRA's Payroll Deductions Online Calculator. Differences appear with mid-year raises, bonuses, taxable benefits, or custom TD1 claims, where year-to-date figures change the withholding math.
| Tool | Best For | Limitation |
|---|---|---|
| This calculator | Quick, accurate estimates with employer costs | Assumes basic TD1 amounts, even pay all year |
| CRA PDOC | Official verification of a specific paycheque | Slower, requires pay date and YTD inputs, no cost planning |
| Payroll software | Running actual payroll with remittances | Monthly cost; overkill for estimates |
Use the calculator above for planning a job offer, a raise, or a hiring decision. Use PDOC when you need to verify an official statement of earnings. And once you have even one employee, honestly, stop calculating by hand. One missed remittance costs more than a year of professional payroll support.
The rates in our calculator are updated every January when CRA publishes the new payroll deduction tables. The figures on this page reflect rates effective January 1, 2026.
When Should You Talk to an Accountant Instead of a Calculator?
Calculators handle clean scenarios. Talk to an accountant when you have bonuses or commissions, taxable benefits, multiple jobs, shareholder-employee wages, or when you're setting up payroll for the first time. Withholding errors compound quietly and surface at tax time, or worse, in a CRA review.
A few situations we see constantly at Bestax:
- Business owners paying themselves. Salary vs. dividends changes your CPP, your RRSP room, and your corporate tax. A calculator can't weigh that trade-off; our corporate tax advisors can.
- Bonuses taxed "wrong." They're not. CRA requires a different withholding method for lump sums, which is why a $5,000 bonus feels heavily taxed on the paystub. It usually washes out at filing.
- Employees with two jobs. Each employer withholds as if they're the only one. Both apply the basic personal amount, and the employee ends up owing in April. A TD1 adjustment fixes it in advance.
- New employers. Registering a payroll account, choosing a remittance schedule, setting up WSIB. The setup is where mistakes get baked in. Our small business accounting team sets it up right the first time.
Run your numbers above. If something looks off, or you'd rather never think about a remittance deadline again, remember that payroll is one of those things that's cheap to do right and expensive to do wrong.
Bestax can help if:
Frequently Asked Questions About Ontario Payroll
How much tax is deducted from a paycheque in Ontario?
Between roughly 15% and 37% of gross pay, depending on income. A $60,000 salary loses about 22% to combined taxes, CPP and EI in 2026; a $150,000 salary loses about 30%. Use the calculator above for your exact number.
What is deducted from a $75,000 salary in 2026?
Approximately $8,260 federal tax, $4,450 provincial tax (including surtax and health premium), $4,246 in CPP, and $1,123 in EI, for about $18,080 total, leaving roughly $56,920 in take-home pay, or about $2,189 per bi-weekly paycheque.
What is CPP2 and who pays it?
CPP2 is the second CPP contribution tier introduced in 2024. In 2026, anyone earning above $74,600 pays an extra 4% on earnings up to $85,000, to a maximum of $416. Employers match it dollar-for-dollar.
Why did my paycheque get bigger later in the year?
You hit the CPP or EI annual maximum. Once contributions reach $4,646.45 (CPP + CPP2) or $1,123.07 (EI) for 2026, deductions stop for the rest of the year and your net pay rises until January.
Do employers pay payroll tax?
Yes. Employers match CPP contributions, pay 1.4 times the EI premium, and may owe Employer Health Tax at 1.95% of payroll, though the $1M EHT exemption means most small private businesses are exempt. WSIB premiums apply in most industries.
Is this payroll calculator free?
Yes, completely free with no sign-up. It uses official 2026 CRA rates and is updated each January. For exact withholding on an official paystub, CRA's PDOC is the authoritative source.