Whether you’re salaried or paid hourly, it’s important to know and understand the information on your pay stub. It’s a detailed document that provides relevant details of your employment and pay. Read on to understand the main components of your Canadian pay stub and what they mean.
Personal information
The first section is devoted to personal information. It contains basic details about you and your employment: like your name, address, and employee ID number. It also includes private information like your SIN, so you should treat your pay stub as a private document.
Your pay stub will also have employment-specific information, like the pay period and date for that pay stub, as well as information on your employment status, i.e. whether you are full-time, part-time, or on contract.
Earnings
Gross pay
Your gross pay is the amount you earn before any deductions are applied. How your gross pay is calculated differs depending on whether you’re salaried or hourly.
If you’re salaried, the gross pay on your pay stub is calculated by taking your annual salary and dividing it by the number of pay periods. Depending on your company, the pay periods could be monthly, biweekly, weekly, etc. So if you are paid biweekly, you’ll have a pay stub coming in biweekly as well. This will show your gross pay for that pay cycle.
For hourly employees, your pay stub will show your hourly wage, multiplied by the number of hours you worked during that pay period. If you work more or fewer hours than usual, your pay stub will also reflect those differences. Verify to make sure they’re accurately calculated, especially if your hours can vary greatly across pay periods. Track your hours yourself so you can make sure the pay stub matches your own records. Any overtime and bonuses will also be added to this section.
YTD
This section, called YTD, or year to date, shows your total earnings from January 1 till your present pay period. This means that the YTD section will “reset” every year, starting fresh from the first of January every year. Every pay stub’s YTD will hence include that pay period’s income + whatever else you have earned so far that year.
Deductions, taxes, withholdings
The big one is taxes. You can calculate your federal and provincial taxes using our updated income tax calculator. You can also compare how much someone at your income level would pay in other provinces. Some tax programs, like CPP and EI, receive contributions from almost every employed Canadian. Other deductions and withholdings will depend on your personal situation, like those that are not employer-related.
Federal income tax
Some amount from each pay cheque is withheld for federal taxes. This amount will depend on your income and the information you filled out on your TD1 form, which is a personal tax credit return form.
Federal taxes are used to fund a range of public services, infrastructure, and social programs. They support OAS (Old Age Security) payments, childcare benefits, healthcare funding, infrastructure projects, education, defence, foreign aid, environmental programs and more. Federal taxes also fund government operations, agencies, and the repayment of federal debt.
Provincial income tax
Most provinces and territories in Canada collect their own income taxes as well. This is listed on your pay stub separate from the federal tax. This way, you will be able to see how much of each pay cheque goes to federal and provincial taxes individually. Most provinces have their own calculation methods like the CRA has for federal taxes. The exception is Alberta, which has a flat 10% provincial income tax irrespective of income.
Provincial taxes are used to fund healthcare services and hospitals, education including postsecondary, social services, welfare programs, provincial infrastructure, provincial emergency services and law enforcement, provincial parks and facilities, and natural resource management.
You can find personal income tax information for Canadian provinces and territories here:
- Alberta
- British Columbia
- Manitoba
- New Brunswick
- Newfoundland and Labrador
- Nova Scotia
- Ontario
- Prince Edward Island
- Quebec
- Saskatchewan
- Northwest Territories
- Nunavut
- Yukon
CPP (Canada Pension Plan)
This deduction goes to the country’s national pension system. As of 2025, the CPP base contribution rate is 5.95% of pensionable earnings, with a basic exemption of $3,500, for a YMPE of $71,300. YMPE stands for the year’s maximum pensionable earnings.
Employers also contribute 5.95% of pensionable earnings to CPP for each employee. This brings the maximum employee and employer contribution to $8,068.20 for the year.
Once the maximum annual contribution for the year has been reached, the employer must stop deducting CPP and CPP2 (if applicable).
EI (Employment Insurance)
Employment Insurance provides financial assistance if you’ve been laid off or lost your job. As of 2025, the EI premium contribution rate for employees is 1.64% of maximum annual insurable earnings up to $65,700.
For employers, the maximum contribution rate is 2.296%. This brings the maximum employee premium for the year to $1,077.48, and maximum employer premium to $1,508.47.
Once the maximum annual contribution rate has been reached, the employer must stop deducting EI.
Any other deductions
You could also have other deductions for workplace benefits, like health, vision, dental, or more.
You may have other salary deductions as well, even non-employer-related. RRSP contributions if you have opted in, paying union dues if you’re part of a union, and wage garnishment are all other deductions you may see depending on your situation.
Net income
This section is what you get in your hand every paycheque. This is your take-home pay after all the deductions are applied. Similar to your YTD (year-to-date) gross income, your YTD net income shows your total take-home income so far for the year, starting January 1st.
Vacation and sick days
Many Canadian companies show your available vacation and/or sick days on your pay stub. How many days you get or how they accrue varies by employer, province, and job role.
The importance of understanding your pay stub
- When you understand the components of your pay stub, you can track your deductions and see where your money is going.
- You will have the ability to plan your finances efficiently and keep an eye on your take-home pay. This can help you plan your budget better too, so you don’t need to put yourself in debt between paycheques. In addition, this will also help you note any discrepancies immediately, so you can let your employer know that something needs to be rectified.
- You can maximize your benefits and contributions. For example, if your employer offers contribution matching, you can start contributing to your RRSP up to the full employer match. It’s extra money towards your RRSP account from your paycheque, matched by your employer!
- You can ensure that your pay and deductions are accurate and that you’re aware of any changes, modifications, or updates. This way, you’re updated with what’s going on with your paystub, so a cheque of a different amount would not raise cause for concern.
Key Takeaways
Pay stubs in Canada generally include the same components, the first being a personal information section. Next comes earnings, with gross pay and year-to-date income information. After this, you’ll see deductions, which will vary based on your province and income. These include federal and provincial taxes, plus CPP and EI deductions.
After all the deductions, you can see your net income, which is your take-home pay. Understanding your pay stub can support your financial goals and ability to plan effectively. It can help you keep track of any changes or modifications to your income. This is especially important if you’re on a tight budget or have debt to clear. If you’re currently dealing with debt, you can contact one of our trained credit counsellors for advice – they can help you figure out which debt relief strategy could be the right fit for your specific situation.
