Canadian Paycheque Hub: How to Read Every Line on Your Pay Stub

A Canadian job offer tells you what you earn. Your pay stub tells you what actually happened.

It shows the hours or salary you were paid for, the period those earnings belong to, taxes and payroll contributions withheld, workplace deductions, employer-paid items, year-to-date totals, and the amount that reaches your bank account. Once you know how to read those lines, a pay stub becomes less of a payroll receipt and more of a quick audit of your job.

The three numbers to find first are gross pay, total deductions, and net pay.

Gross pay is what you earned before deductions. Net pay, also called take-home pay, is what remains after income tax, CPP or QPP, EI, benefit premiums and other deductions. If your gross pay is $2,500 and your net pay is $1,900, the missing $600 has not vanished. Your pay stub should show where it went.

Most pay stubs use different layouts and abbreviations, but the underlying pieces are remarkably consistent. This guide decodes them from top to bottom using current 2026 Canadian payroll rules.

The pay stub in one table

Start at the top: employer, employee and pay-period information

The first block usually identifies the employer and employee. You may see your name, employee number, department, work location, job code, pay group, province of employment and payroll number.

The province of employment can matter for payroll withholding. It is not always the same thing as the province where you live. Employers use CRA rules to determine the province or territory of employment for payroll purposes, and that affects which provincial or territorial tax deductions are taken. Quebec also administers its own provincial income tax and has additional payroll deductions.

Next, find the pay period and pay date.

They are not the same thing.

If your pay period is August 17 to August 30 and your pay date is September 4, the work belongs to the August pay period even though the money arrives in September. This becomes important when checking overtime, vacation, a raise that took effect mid-period, or your final pay after leaving a job.

Biweekly and semi-monthly are not the same

Two common Canadian pay schedules sound almost identical:

• Biweekly: once every two weeks, usually 26 pays per year.
• Semi-monthly: twice per month, usually 24 pays per year.

A $60,000 salary paid biweekly is about $2,307.69 of gross salary per normal pay period before adjustments. The same salary paid semi-monthly is $2,500 per normal pay period.

That difference does not change your annual salary. It changes the size and timing of each cheque.

If you are comparing a job offer with your first real deposit, use Canooq's Salary After Tax Calculator and select the same pay frequency as your employer.

Earnings: how your gross pay is built

The earnings section is the part to read before looking at deductions. Payroll cannot deduct the right amount from the wrong earnings.

Regular pay

For hourly employees, this line usually shows:

hours × hourly rate = regular earnings

If you worked 75 regular hours at $24 per hour:

75 × $24 = $1,800

Check all three pieces. A missing shift, old hourly rate or incorrect number of hours can make every deduction below it look wrong even when payroll calculated those deductions correctly.

Salaried employees may see a fixed amount per pay period instead of an hourly calculation. Some payroll systems still display standard hours even though the employee is paid a salary.

Overtime

Overtime may appear on a separate line with its own number of hours and rate.

Do not assume the same overtime rule applies across Canada. Employment standards are mostly provincial or territorial, with separate federal standards for federally regulated workplaces. The threshold for overtime, overtime rate and which employees are exempt can vary.

The pay stub is still easy to audit: compare the overtime hours shown with your approved time records and the rate with the rule that applies to your workplace.

Shift premiums, call-in pay and other premiums

Evening, night, weekend, on-call or special-duty premiums may appear as separate earnings. Some are required by a collective agreement or employment contract rather than employment standards legislation.

A line such as `SHIFT PREM`, `NIGHT DIFF`, `CALL BACK` or `STANDBY` is earnings, not a deduction.

Bonus and commission

Bonuses and commissions add to employment income. The amount withheld for tax on a bonus can look unusually large compared with a normal paycheque because payroll may use a different withholding calculation for irregular payments.

That does not mean Canada has a special final tax rate that applies only to bonuses. Your tax return ultimately calculates tax using your total taxable income for the year, deductions and credits. Payroll withholding is a prepayment toward that calculation.

Vacation pay

Vacation can show up several ways.

Some employers pay vacation pay on each cheque. Others accrue it and pay normal wages while you take vacation. A pay stub may therefore show `VAC PAY`, `VAC ACCRUED`, `VAC BALANCE`, `PTO` or another employer-specific label.

Vacation entitlement and vacation-pay rules depend on the employment-standards jurisdiction and, in some cases, your length of service. Do not assume a percentage copied from someone else's pay stub is the rule for your job.

Statutory holiday or public holiday pay

Holiday pay may appear separately when a statutory holiday falls in the pay period. Some payroll systems combine it with regular earnings, while others show the holiday hours and amount on their own line.

Again, provincial, territorial and federal rules differ. The useful check is whether the holiday was handled under the rule that covers your workplace.

Retroactive pay

`RETRO`, `RETRO PAY` or `RETROACTIVE` usually means payroll is correcting pay for an earlier period, often after a raise, new collective agreement or payroll correction.

The current cheque can therefore be much larger than usual even though your new regular rate is only slightly higher.

Gross pay: the amount you earned before deductions

Gross pay is the total earnings for the pay period before payroll deductions.

It can include:

• regular wages or salary;
• overtime;
• commissions;
• bonuses;
• vacation pay;
• statutory holiday pay;
• shift premiums;
• retroactive pay; and
• other taxable cash earnings.

Gross pay is the number commonly used when people talk about a $70,000 salary or a $28 hourly wage. It is not the amount available for rent, groceries or debt payments.

Use net pay for a household budget.

If you want to see how the same gross salary changes across the country, Canooq's Take-Home Pay by Province compares federal and provincial or territorial tax, CPP or QPP, EI and QPIP assumptions using the same income.

Why taxable gross can be different from gross pay

This is one of the most confusing lines on a detailed pay stub.

Gross pay measures what you earned. Taxable gross is the amount payroll uses as taxable remuneration after accounting for the tax treatment of certain benefits and deductions.

A taxable benefit can increase taxable income even when no extra cash lands in your account. Depending on the benefit, examples can include personal use of an employer vehicle, employer-paid parking or some employer-provided insurance.

Some qualifying payroll deductions can move the other way and reduce remuneration used in the withholding calculation.

That means a pay stub can legitimately show:

gross pay ≠ taxable gross

Do not try to force the two numbers to match before checking the benefits and pre-tax deductions sections.

The CRA has separate tax rules for cash, non-cash and near-cash benefits, so the effect on income tax, CPP and EI is not identical for every benefit.

Income tax: the biggest deduction on many paycheques

The `TAX`, `INCOME TAX`, `FED TAX`, `CIT`, `PROV TAX` or similar line is income tax withheld by your employer.

For most employees outside Quebec, payroll calculates federal and provincial or territorial tax through the payroll system and remits it to the CRA. The pay stub may show one combined income-tax amount or separate federal and provincial lines.

Quebec employees can see federal income tax and Quebec provincial income tax handled separately because Revenu Québec administers the provincial system.

Withholding is not your final tax bill

The tax taken from each cheque is an estimate of the tax that should be prepaid during the year.

Your annual tax return does the final calculation using your actual annual income, deductions and credits. The result can be:

• a refund;
• no balance; or
• tax owing.

A tax refund often means more tax was prepaid than your final calculation required. It is not an extra payment on top of the tax system.

What changes the tax deducted from your pay?

Common reasons include:

• a raise;
• overtime;
• a bonus or commission;
• a taxable benefit;
• a change in province of employment;
• a different pay frequency;
• pension or qualifying registered-plan contributions;
• a new TD1;
• having more than one employer; or
• requesting extra tax to be withheld.

When you start a job, your employer will normally ask for a federal TD1 Personal Tax Credits Return and the applicable provincial or territorial form. Quebec uses its own provincial form.

The amounts claimed on those forms help payroll determine how much income tax to withhold. If your situation changes, or if you have two jobs and both employers are effectively giving you the same credits, the withholding can be too low.

Canooq's TD1 Personal Tax Credits Helper walks through the main fields.

For a broader annual estimate, use the Canadian Tax Calculator.

CPP: Canada Pension Plan contributions outside Quebec

Most employees outside Quebec contribute to the Canada Pension Plan on pensionable employment earnings.

For 2026:

The 5.95% rate includes the base CPP contribution and the first additional CPP contribution.

You do not simply pay 5.95% of your entire salary. The $3,500 annual basic exemption and payroll calculation matter, and contributions stop once the applicable annual maximum is reached with that employer.

Your employer also contributes its own share. The employer contribution is not another deduction from your pay.

What is CPP2?

CPP2 is the second additional CPP contribution introduced as part of the CPP enhancement.

In 2026, it applies to pensionable earnings above $74,600 and up to $85,000. The employee rate on that band is 4%.

If you earn below the first ceiling, you should not see CPP2.

If you earn above it, a CPP2 line can begin later in the year after your pensionable earnings cross the threshold.

QPP: Quebec Pension Plan contributions

Employees in Quebec generally contribute to the Quebec Pension Plan instead of CPP.

For 2026:

The 6.30% employee rate consists of a 5.30% base contribution rate plus the 1% first additional contribution.

Quebec has its own rules for workers 65 and older who receive a CPP or QPP retirement pension and may elect to stop contributing, as well as an age at which contributions end. Those situations are worth checking directly with Revenu Québec if they apply to you.

EI: Employment Insurance premiums

Most employees in insurable employment pay Employment Insurance premiums.

For 2026 outside Quebec:

EI is calculated only up to the annual maximum insurable earnings.

Once you reach the maximum employee premium with the same employer, EI deductions stop for the rest of that calendar year. They start again in January.

The employer also pays an EI premium on your behalf. That employer amount is not deducted from your cheque.

Quebec EI is lower because Quebec also has QPIP

Quebec employees pay a lower EI rate because the province operates its own parental-insurance system.

For 2026 in Quebec:

• EI employee rate: 1.30%
• maximum EI employee premium: $895.70
• maximum EI insurable earnings: $68,900

A Quebec pay stub can therefore show EI + QPIP + QPP, while an otherwise similar Ontario or Alberta pay stub would normally show EI + CPP.

QPIP: Quebec Parental Insurance Plan

QPIP funds Quebec's parental, maternity, paternity and adoption benefits.

For 2026:

If you do not work in Quebec, QPIP should not normally appear on your pay stub.

Why CPP, QPP, EI or QPIP can suddenly disappear

For employees who earn enough to reach an annual contribution maximum, the cheque can get larger later in the year because one or more payroll contributions have reached their cap.

For example, EI outside Quebec stops after the employee has paid the 2026 annual maximum of $1,123.07 with that employer.

CPP can also stop after the first contribution maximum, although higher earners can then have CPP2 contributions on the additional earnings band.

This creates a small trap for budgeting: the larger late-year paycheque is not necessarily your new permanent take-home pay. The annual limits reset in January and deductions begin again.

Changing employers can change the pattern

A new employer does not simply inherit the payroll totals from your old employer. Each employer calculates CPP/QPP and EI based on its own payroll records.

If you change jobs during the year, you can therefore contribute more than the employee annual maximum across multiple employers. Eligible CPP/QPP or EI overpayments are generally reconciled through your tax return.

Your YTD column is useful, but remember that it normally shows the totals with that employer, not every employer you have had during the year.

Pension, group RRSP and retirement deductions

Workplace retirement deductions can appear under labels such as:

• `PENSION`;
• `RPP`;
• `RRSP`;
• `GROUP RRSP`;
• `DCPP`;
• `PRPP`;
• `SUPERANNUATION`; or
• a plan-specific abbreviation.

These are not government payroll deductions like CPP or EI. They are contributions to an employer pension or savings arrangement.

Check:

1. the employee contribution rate;
2. whether it is based on all earnings or only pensionable salary;
3. whether the employer matches contributions; and
4. whether the employer contribution appears elsewhere on the stub.

An employer match is part of your compensation even though it does not increase the deposit in your chequing account today.

Some payroll systems show employer pension or RRSP contributions in a separate `Employer Paid`, `Company Contributions` or `Benefits` section. Do not subtract those amounts from net pay a second time.

Health, dental, disability and life-insurance deductions

Workplace benefits often create several small payroll lines instead of one simple `BENEFITS` charge.

You might see:

• extended health;
• dental;
• short-term disability;
• long-term disability;
• life insurance;
• accidental death and dismemberment insurance;
• health spending account charges; or
• benefit-plan administration deductions.

Some are fully employer-paid. Some are employee-paid. Some are shared.

Their tax treatment also differs. A benefit being shown on the stub does not automatically mean the amount is being deducted from your cash pay.

If a benefits deduction changes after enrolment or after a waiting period ends, compare it with the benefits election you signed rather than assuming payroll made an error.

Union dues

Unionized employees may have dues deducted directly from payroll.

The line can appear as `UNION`, `DUES`, a union acronym or a local number.

If the amount changes, the cause may be a percentage-of-pay formula, a flat monthly amount, an initiation charge or a change under the collective agreement.

Eligible union or professional dues can also matter on the annual tax return, so YTD totals are worth retaining even though your employer will normally report the applicable amount on your tax slip.

Other deductions you might see

A pay stub can include deductions that have nothing to do with tax.

Common examples include:

• parking;
• transit pass;
• employee stock purchase plan;
• charitable donations;
• social-club fees;
• equipment or uniform amounts where permitted;
• payroll savings;
• repayment of an advance;
• overpayment recovery; or
• a court-ordered garnishment.

Do not ignore an unfamiliar line because the amount is small. Payroll abbreviations are often terrible. Ask payroll or HR for the full name and basis of any deduction you cannot identify.

Employer-paid amounts: visible, but not deducted from your pay

Some stubs show what your employer contributes toward:

• CPP or QPP;
• EI;
• QPIP;
• pension plans;
• group RRSP matching;
• health and dental benefits; or
• other insurance.

This is useful compensation information.

It can also make the page look as if much more money has been deducted than actually has. Employer-paid contributions usually sit in a separate informational column and do not reduce your net pay.

Use this section when comparing two job offers. A company paying $3,000 more salary is not automatically the better offer if another company contributes thousands more to a pension or benefits plan you would otherwise pay for yourself.

Current vs YTD: the two columns you should not mix up

Most pay stubs show at least two amount columns:

Current means this pay period.

YTD, or year to date, means the accumulated total since January 1 for that employer.

If your current income tax is $350 and YTD income tax is $6,800, you did not lose $7,150 from this cheque. The $6,800 already includes the earlier periods.

What YTD is good for

Use it to:

• see how much gross pay you have earned this year;
• track income tax withheld;
• see how close CPP/QPP and EI are to their annual maximums;
• check retirement-plan contributions;
• reconcile payroll after a correction;
• estimate where your T4 or RL-1 totals are heading; and
• compare the pay stub with your own records.

YTD numbers are particularly useful after a bonus, retroactive raise, leave of absence or payroll correction.

Net pay: the number that reaches your bank account

The basic relationship is:

gross cash earnings − employee taxes and deductions = net pay

Taxable benefits and payroll-specific adjustments can make the full calculation more complicated behind the scenes, but net pay is still the amount the employer actually pays you after deductions.

Compare it with your bank deposit every payday.

If the stub shows $2,146.37 of net pay and the direct deposit is $2,146.37, the final step reconciles.

For monthly planning, use your normal net pay, not annual gross salary. Canooq's Canadian Finances 101 guide starts the household money flow from the same number.

A practical pay-stub audit in five minutes

You do not need to recalculate an entire payroll system every two weeks.

Run these checks instead:

1. Confirm the period

Make sure the pay period covers the dates you expected.

2. Reconcile earnings

Check regular hours, hourly rate, overtime, premiums, vacation, bonus or commission.

3. Scan mandatory deductions

Look for income tax, CPP or QPP, EI, and QPIP if you work in Quebec.

4. Identify every workplace deduction

Know what each benefit, pension, union or miscellaneous deduction is.

5. Match net pay to the deposit

The net amount on the stub should match what actually reached your account.

A difference in gross pay is usually an earnings problem. A difference in deductions is usually a withholding, benefit or payroll-settings question. A difference between net pay and the actual deposit needs to be resolved directly with payroll.

Why your paycheque changed even though your salary did not

A different deposit does not always mean your employer changed your salary.

Common causes include:

Compare two consecutive pay stubs line by line. The first line that changed usually explains the deposit.

Your pay stub and your T4 are connected, but they are not the same document

The pay stub is a running payroll record.

The T4 Statement of Remuneration Paid summarizes employment income and deductions that your employer reports for the calendar year. Quebec employees can also receive an RL-1.

Your final YTD pay-stub totals can help you spot a major mismatch when tax slips arrive, but the amounts are not guaranteed to map line for line. Taxable benefits, pension adjustments, reporting rules, corrections and the timing of payroll entries can affect the annual slips.

Keep your last pay stub of the year, especially if you changed jobs or had a payroll correction.

What to do if a pay stub looks wrong

Start with the underlying record, not the tax calculation.

If the problem is hours or earnings, collect:

• your schedule;
• timesheets;
• approved overtime;
• offer letter or employment agreement;
• notice of a raise;
• commission statement; and
• the previous pay stub.

If the problem is a deduction, collect:

• your TD1;
• benefits enrolment;
• pension election;
• union or plan information; and
• the pay stub where the amount first changed.

Send payroll a specific question such as:

My August 17 to August 30 pay stub shows 72 regular hours, but my approved timesheet shows 80. Can you confirm the missing eight hours and when the correction will be paid?

That is much easier to resolve than "my pay looks wrong."

Employment standards, pay-statement requirements, wage deductions, overtime and vacation rules vary by jurisdiction. If the dispute is about whether a deduction or pay practice is legally permitted rather than a simple payroll error, check the employment-standards authority that covers your workplace.

Canooq's Employment Basics in Canada explains the broader Canadian employment setup, including offers, employee status, benefits and records worth keeping.

Frequently asked questions

What is the difference between a paycheque and a pay stub?

The paycheque is the payment. Today that is usually a direct deposit. The pay stub, also called a statement of earnings, is the record showing how the employer calculated the payment.

Why is my net pay so much lower than my salary?

Salary is normally quoted before income tax and payroll deductions. Income tax, CPP or QPP, EI, QPIP in Quebec, benefits, pensions and other workplace deductions reduce the amount deposited.

Is gross pay before or after tax?

Gross pay is before income tax and payroll deductions. Net pay is after deductions.

What does YTD mean on a pay stub?

YTD means year to date. It is the accumulated total from the beginning of the calendar year through the current pay period, normally for that employer.

Why did CPP stop coming off my pay?

You may have reached the annual employee contribution maximum with that employer. Higher earners can also move into CPP2 or QPP2 before all pension-plan contributions stop for the year. The limits reset in January.

Why did EI disappear from my paycheque?

EI premiums stop once you reach the annual employee maximum with that employer. In 2026, the maximum employee EI premium is $1,123.07 outside Quebec and $895.70 in Quebec.

What is CPP2 on my pay stub?

CPP2 is the second additional Canada Pension Plan contribution. In 2026 it applies to pensionable earnings above $74,600 and up to $85,000 outside Quebec. Quebec has a corresponding QPP2 contribution.

Why do I have QPIP on my pay stub?

QPIP is the Quebec Parental Insurance Plan. Quebec employees pay QPIP premiums and a lower EI rate than employees elsewhere in Canada.

Why is taxable gross higher than gross pay?

A taxable non-cash benefit can increase the amount treated as taxable income even though you did not receive that value as cash. The exact treatment depends on the benefit.

Why is taxable gross lower than gross pay?

Certain qualifying pre-tax or registered-plan deductions can reduce the remuneration used for income-tax withholding. Payroll systems label these amounts differently, so check the deductions section before assuming there is an error.

Are bonuses taxed more heavily in Canada?

There is no separate final income-tax system just for bonuses. Payroll withholding on a bonus can look higher because of the way irregular payments are calculated, but your annual tax return ultimately taxes your total taxable income under the normal tax rules.

Should my employer's CPP contribution reduce my pay?

No. Your employee CPP contribution reduces your pay. The employer pays its own contribution separately. Some pay stubs display both for information.

Is vacation pay always shown on a pay stub?

Not in the same way. It can be paid on each cheque, paid when vacation is taken, or tracked as an accrued balance depending on the employment arrangement and applicable rules.