MyCalculatorHow this is calculated
Federal tax is calculated progressively across five 2026 brackets (14%–33%), then reduced by a non-refundable Basic Personal Amount (BPA) credit worth 14% of $16,452 for most taxpayers. The BPA itself tapers down to $14,829 for income between $181,440 and $258,482. CPP is 5.95% on earnings between the $3,500 basic exemption and the $74,600 Year's Maximum Pensionable Earnings (YMPE). CPP2 adds 4% on earnings between $74,600 and $85,000. EI is 1.63% of insurable earnings up to $68,900.
Worked example
On a $70,000 salary: federal tax is approximately $8,243 after the BPA credit. CPP is $3,956.75 (5.95% of $66,500 pensionable earnings). No CPP2 applies since income is below the $74,600 YMPE. EI is capped at its 2026 maximum of $1,123.07. Estimated federal take-home: approximately $56,677 — before provincial tax.
Assumptions & limitations
- Provincial/territorial tax is not included — this varies significantly across Canada's 13 provinces and territories.
- Quebec residents pay QPP and QPIP instead of CPP and standard EI rates — not modeled here.
- Does not include RRSP deductions or other tax credits beyond the BPA.
Sources
CRA federal tax brackets and Basic Personal Amount for 2026; CRA T4127 Payroll Deductions Formulas for CPP/CPP2/EI rates. See our sources page.
Frequently asked questions
Does this include provincial tax?
No. Each province and territory sets its own income tax rates and brackets on top of the federal system — this calculator covers federal tax only.
What is CPP2?
A second-tier CPP contribution introduced in 2024, applying to earnings between the YMPE ($74,600) and a second ceiling, the YAMPE ($85,000), at 4%.
Does this apply to Quebec?
Not fully — Quebec residents contribute to QPP (not CPP) and pay a reduced EI rate alongside a separate QPIP premium, which this calculator does not model.