Net income is your take-home pay after all deductions. Your employer deducts CPP contributions, EI premiums, federal and provincial income tax, and any other deductions (pension, benefits, union dues) from your gross pay. What is deposited into your bank account is your net income.

How do I calculate my net income in Canada?

Net income = Gross income – CPP contributions – EI premiums – Federal tax – Provincial tax – Other deductions (pension, benefits, etc.). For a quick estimate, most Canadians earning $50,000–$80,000 take home roughly 70–75% of their gross salary. Use a payroll calculator for exact figures.

What is the difference between gross income and net income?

Gross income is your total salary before any deductions. Net income is what you actually receive after CPP, EI, federal tax, provincial tax, and other deductions are taken off. For example, a $60,000 gross salary in Ontario results in approximately $47,000–$48,000 net income.

What Is Net Income? (Canadian Guide)

Gross Income vs Net Income

Term	Definition	Example ($70,000 salary in Ontario)
Gross income	Total salary/wages before deductions	$70,000
Net income (take-home)	What you receive after all deductions	~$54,000
CRA line 23600 net income	Gross income minus specific tax deductions (RRSP, union dues, childcare)	Varies
Taxable income	Net income minus personal amounts — what your tax rate applies to	Varies

What Gets Deducted from Your Paycheque

Mandatory Deductions

Deduction	2026 Rate	Maximum Annual	Purpose
CPP (Canada Pension Plan)	5.95% of pensionable earnings ($3,500–$71,300)	~$3,867 (base) + CPP2	Retirement pension
CPP2 (second ceiling)	4% on earnings $71,300–$81,200	~$396	Enhanced retirement pension
EI (Employment Insurance)	1.64% of insurable earnings	~$1,077	Unemployment, parental leave
Federal income tax	15–33% (progressive brackets)	Varies	Federal government services
Provincial income tax	5–21% (varies by province)	Varies	Provincial government services

Optional/Employer Deductions

Deduction	Typical Amount	Notes
Employer pension (DB or DC)	3–9% of salary	Matched by employer
Group RRSP	Varies	May include employer match
Health/dental benefits	$50–200/month	Employer-sponsored plan
Union dues	1–3% of salary	If unionized
Parking / transit	Varies	If applicable
Life insurance / disability	Varies	Employer-sponsored

Net Income by Salary Level (Ontario, 2026)

Gross Annual Salary	Biweekly Gross	Federal Tax	Provincial Tax	CPP	EI	Biweekly Net	Annual Net
$40,000	$1,538	$110	$55	$75	$25	~$1,273	~$33,100
$50,000	$1,923	$165	$85	$100	$32	~$1,541	~$40,100
$60,000	$2,308	$225	$130	$125	$38	~$1,790	~$46,500
$70,000	$2,692	$295	$180	$150	$44	~$2,023	~$52,600
$80,000	$3,077	$370	$230	$150	$50	~$2,277	~$59,200
$100,000	$3,846	$530	$345	$150	$50	~$2,771	~$72,000
$120,000	$4,615	$715	$465	$150	$50	~$3,235	~$84,100
$150,000	$5,769	$990	$630	$150	$50	~$3,949	~$102,700

Estimates assume single, no dependents, only basic personal tax credits. Actual amounts vary.

Net Income by Province ($70,000 Salary)

Province	Provincial Tax Rate	Approximate Annual Net	Effective Tax Rate
Alberta	8% (first bracket, to $61,200)	~$55,600	~20.6%
British Columbia	5.06–20.5%	~$53,900	~23.0%
Ontario	5.05–20.53%	~$52,600	~24.9%
Quebec	14–25.75% (+ lower CPP)	~$50,500	~27.9%
Manitoba	10.8–17.4%	~$52,100	~25.6%
Saskatchewan	10.5–14.5%	~$53,000	~24.3%
Nova Scotia	8.79–21%	~$51,800	~26.0%
New Brunswick	9.4–19.5%	~$52,200	~25.4%

Quebec has its own pension plan (QPP) instead of CPP with slightly different rates.

How to Read Your Pay Stub

Line	What It Shows	Where It Goes
Gross pay	Total earnings this period	Starting point
Federal tax	Income tax withheld for CRA	Federal government
Provincial tax	Income tax withheld for province	Provincial government
CPP/QPP	Pension contribution	Your future CPP pension
EI	Employment insurance premium	EI fund
Other deductions	Benefits, pension, union, etc.	Various
Net pay	What hits your bank account	Your account
YTD earnings	Cumulative gross pay this year	Reference
YTD deductions	Cumulative deductions this year	Reference

Net Income for Tax Purposes (Line 23600)

CRA “net income” on your tax return (line 23600) is different from your paycheque net income:

What Reduces CRA Net Income	Example
RRSP contributions	Deduct contributions from gross income
Union/professional dues	Deduct from gross income
Childcare expenses	Deduct eligible amounts
Moving expenses (for work/school)	Deduct if you moved 40+ km closer
Employment expenses (if eligible)	Home office, vehicle, supplies

CRA net income affects eligibility for benefits like CCB, GST/HST credit, and OAS clawback.

Net income calculation example (Ontario, $70,000 salary, 2025)

Item	Amount
Gross salary	$70,000
Federal income tax	−$9,640
Ontario provincial tax	−$4,910
CPP contributions	−$3,867
EI premiums	−$1,049
After-tax take-home	~$50,534

Approximate; excludes Ontario surtax phase-in, additional credits, RRSP deductions.

Take-home is approximately 72% of gross salary at this income level in Ontario. The percentage varies by province:

Province	Take-home % at $70K	Key driver
Alberta	~74%	No provincial sales tax; lower provincial rate
Ontario	~72%	Average
BC	~72%	Similar to Ontario
Quebec	~67%	High provincial tax + Quebec Pension Plan
Nova Scotia	~70%	Higher provincial rates

Frequently asked questions

What is the difference between net income and take-home pay? Net income (Line 23600 on your T1) is your total income minus certain deductions (RRSP contributions, union dues, childcare, etc.) — used for calculating benefit eligibility and provincial income tax. Take-home pay is what actually deposits in your bank account after all payroll deductions (taxes, CPP, EI). They are different numbers: net income does not subtract income taxes owed; take-home pay does.