Every deduction on a Canadian pay stub outside Quebec comes from one publication: the Canada Revenue Agency’s T4127, Payroll Deductions Formulas. It is what payroll software is built on, and this page runs the same formulas, cheque by cheque, for the whole of 2026. Each line on the cheque above shows the arithmetic behind it.
CPP is 5.95% of pay above a small exemption on each cheque, until you have paid the year’s maximum. CPP2 is a further 4% on earnings between $74,600 and $85,000. EI is 1.63% of insurable earnings up to its own maximum. When each one maxes out, it simply stops, which is why cheques get bigger in the fall for anyone earning above those levels.
Income tax on a cheque is worked out by pretending every cheque this year looks like this one: the cheque is multiplied up to a year, the federal and provincial tax on that year is calculated with your credits, and the result is divided back down. That is why a cheque with overtime is taxed as if you earned that much all year, and why the year-end estimate matters: it does the same arithmetic on what you actually earned.
Mid-year changes. British Columbia, Newfoundland and Labrador and Prince Edward Island changed their 2026 tax rules in the spring. Payroll uses the January rules until June and a prorated rate from July so the year comes out right, and each cheque here uses the rules in force on its pay date.
Two jobs. Each employer deducts as if it were your only one: it starts you at the bottom tax bracket, gives you the full CPP exemption and charges CPP and EI until its own maximums. The extra CPP and EI come back on your return. The tax that was too low does not, which is how people with two jobs end up owing in April.
Your schedule. Turn on My schedule and the page works out every day of 2026 from your shift pattern: overtime by your province’s daily and weekly limits (or your agreement’s), shift premiums by the clock and the weekday, statutory holidays, vacation and sick days, extra shifts and raises. Each cheque then pays for its own period, which is why cheques with overtime, a stat or a night rotation differ from the rest. Stat pay uses a fixed number of hours rather than each province’s averaging formula, and weeks run Sunday to Saturday.
Raises and the years ahead. A raise can be a percentage or a new rate, from any date. One that was settled late can be paid from a later date: the cheques until then pay the old rate, and the difference since the raise took effect arrives as one lump sum, taxed the way payroll taxes a bonus. The years after 2026 are projections, not published rules: 2026’s rules carried forward, with tax brackets and credits rising with prices (British Columbia has frozen its own for 2027 to 2030), the CPP and EI maximums rising with wages, and every rate held where it is. Stat holidays for later years come from each holiday’s rule, without the days some provinces move when a holiday lands on a weekend.
What it does not model yet: Quebec, self-employment and commission-only pay.