About Payroll Calculator
Calculate Canadian employee net pay with CPP, CPP2, EI, and federal/provincial tax withholdings. Includes employer costs and CRA remittance totals. Free for 2025.
How to use
- Select the country (Canada or US) and the employee's province or state. This determines the applicable tax brackets, payroll deduction rates, and employer contribution requirements. Each Canadian province has different income tax rates, and Quebec has its own QPP/QPIP system instead of the federal CPP/EI.
- Enter the employee's gross pay amount and select the pay frequency: weekly, bi-weekly, semi-monthly, or monthly. The pay frequency determines how annual deduction thresholds are prorated for each pay period. An employee earning $60,000 annually receives $2,307.69 per bi-weekly period.
- Review the automatic deduction calculations. For Canadian employees: CPP at 5.95% on earnings between $3,500 and $71,300 per year, CPP2 at 4% on earnings between $71,300 and $81,900, EI at 1.64% up to $65,700, federal income tax, and provincial income tax. All deductions are prorated to the pay period.
- Check the employer cost breakdown. Canadian employers pay CPP matching (5.95% — same as employee), EI at 1.4x the employee rate (2.296%), and any additional benefits. On a $60,000 salary, employer payroll costs add roughly $5,500-$6,000 beyond the gross salary.
- View the CRA remittance amount — the total you must send to the CRA each period. This combines employee deductions (CPP + EI + income tax) plus employer contributions (CPP match + EI premium). Regular remitters send this by the 15th of the following month.
- Run calculations for each employee individually or as a batch. Compare costs across provinces to understand the impact of location on total compensation costs. An employee in Quebec costs approximately 2-3% more than the same salary in Ontario due to QPP and QPIP differences.
Frequently asked questions
How are Canadian payroll deductions calculated?
Canadian payroll deductions include four components: (1) CPP at 5.95% on pensionable earnings between $3,500 and $71,300, maxing at $4,034.10/year per employee; (2) EI at 1.64% on insurable earnings up to $65,700, maxing at $1,077.48/year; (3) federal income tax using progressive brackets from 15% to 33%; and (4) provincial income tax at rates varying by province. Each pay period, these deductions are calculated on the period's gross pay, prorated from annual thresholds. The employer must remit all employee deductions plus their matching contributions to the CRA.
What is CPP2?
CPP2 (second additional CPP enhancement) was introduced in 2024 to increase retirement benefits. It applies a 4% contribution rate on earnings between the first ceiling ($71,300 YMPE) and the second ceiling ($81,900 YAMPE). Both the employee and employer contribute 4% each on this earnings range, with a maximum annual contribution of $422 each. CPP2 only affects employees earning above $71,300. The additional contributions fund enhanced CPP retirement benefits that will be paid out starting in future years. Quebec has an equivalent QPP2 with similar rates and thresholds.
Does this work for US payroll?
Yes, the calculator supports US payroll calculations including FICA (6.2% Social Security on earnings up to $168,600 and 1.45% Medicare on all earnings), federal income tax withholding using standard US brackets, and state income tax for all states that have one. Employer costs include matching FICA (6.2% SS + 1.45% Medicare) and FUTA (6% on the first $7,000, reduced to 0.6% with state unemployment credit). Nine states have no income tax. The calculator automatically applies the correct rates for the selected state.
What is the employer's share of payroll deductions?
In Canada, employers pay: CPP matching at 5.95% (identical to the employee contribution, maxing at $4,034.10/year), EI at 2.296% (1.4 times the employee rate, maxing at $1,508.47/year), and CPP2 matching at 4% (maxing at $422/year). On a $60,000 annual salary, the employer's mandatory payroll cost is approximately $5,500-$6,000 above the gross salary. This means an employee costing $60,000 in gross pay actually costs the employer $65,500-$66,000. US employers pay matching FICA (7.65%), FUTA (0.6% effective on first $7,000), and state unemployment insurance.
How often do I remit payroll deductions to CRA?
Remittance frequency depends on your average monthly withholding amount over the previous year. Regular remitters (under $25,000/month in withholdings) remit by the 15th of the month following the pay period. Quarterly remitters (under $3,000/month average, for very small employers) remit quarterly. Accelerated remitters (over $25,000/month) remit within 3 days of the pay period end. New employers without remitting history start as regular remitters. Late remittances incur penalties of 3% (1-3 days late) up to 10% (7+ days late) plus daily compound interest. After each payroll run, generate official pay records using the
Pay Stub Generator.
What is the basic personal amount for 2025?
The federal basic personal amount for 2025 is $16,129, which means the first $16,129 of income is effectively tax-free at the federal level (it generates a non-refundable credit of 15% x $16,129 = $2,419). Each province also has its own basic personal amount ranging from approximately $10,000 to $21,000. Employees declare their personal tax credits on the TD1 form when hired. The payroll calculator uses these amounts to reduce tax withholding on each paycheck. Higher-income earners (over $173,205) have a reduced federal basic personal amount.
How do I handle payroll for Quebec employees?
Quebec uses its own provincial pension and insurance plans instead of federal CPP and EI. QPP (Quebec Pension Plan) replaces CPP at a rate of 6.40% employee / 6.40% employer (slightly higher than CPP). QPIP (Quebec Parental Insurance Plan) replaces federal parental EI benefits at 0.494% employee / 0.692% employer. Quebec EI rate is reduced to 1.32% (vs. 1.64% for other provinces) since QPIP covers parental benefits. Quebec employers must also deduct provincial income tax using Revenu Quebec tables and remit Quebec deductions separately from federal deductions.
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