How can I calculate my payroll? New to payroll processing in Canada?
Use this free, simple, yet powerful tax deduction calculator to calculate payroll for your employees – paid salary or hourly – in any province or territory in Canada.
Fill in the fields below for a quick calculation. Be sure to turn on advanced mode for a more accurate calculation.
Please note that the ADP Canadian Payroll Calculator “(the Calculator”) is designed to provide general guidance and estimates only. The Calculator is not intended to provide tax, legal or other professional advice. While every effort is made to provide current information, tax laws change regularly, and laws may vary depending on the province/territory of the employer and of the employee. You should consult a professional advisor or accountant for advice on any specific requirements or concerns. For more information, you may visit Canada Revenue Agency (CRA) online payroll calculator.
Payroll calculator guide
Although our payroll calculator does much of the heavy lifting, it may be helpful to take a closer look at a few of the calculations essential to payroll.
How to calculate gross pay
Gross pay is a fundamental concept in payroll and financial planning for employers and employees. A Canada payroll calculator can supply the gross pay for budgeting and forecasting labour costs for businesses. Conversely, for employees, understanding gross pay is essential for personal financial planning, budgeting, and evaluating job offers.
In loan applications or financial verifications, institutions may check an individual's gross pay as it provides a clearer picture of pay after tax and income before any mandatory or voluntary deductions. Ensuring the accurate calculation of gross pay is pivotal for maintaining transparent financial and employment records. When considering how to calculate payroll, a salary calculator can provide a precise understanding of earnings.
Gross pay is earned wages before payroll deductions and employers typically use this figure when discussing compensation with employees. (i.e. $60,000 annually, or $25 per hour). Calculating gross pay depends on how the employee is paid. For salaried employees, gross pay is equal to their annual salary divided by the number of pay periods in a year (see chart below).
| Pay Schedule | Pay Periods |
| Weekly | 52 |
| Bi-weekly | 26 |
| Semi-monthly | 24 |
| Monthly | 12 |
To calculate gross pay for hourly workers, multiply the hourly rate by the hours worked during a pay period.
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How to calculate insurable earnings
Insurable earnings are the amounts reported on a worker’s earnings statement, and any income reported in box 14 of the T4 slip as gross earnings. It plays a vital role in determining an employee's entitlement to various benefits, particularly in systems like the Employment Insurance (EI) program in Canada.
An online payroll calculator to calculate monthly income after tax can help determine insurable earnings so that the correct reporting is made towards government programs.
How do I calculate my CPP deductions?
The Canada Pension Plan (CPP) is a foundational component of Canada's social safety net, ensuring citizens can access financial support during retirement. With tools like a payroll deductions online calculator, individuals can get a clearer picture of their contributions. Using a payroll calculator, Canada social services payments can be precise.
All employees pay CPP at a rate outlined by the Canada Revenue Agency (CRA). It’s not as difficult as you may think to manually calculate your CPP contributions. Follow the steps below.
- Divide the basic pay-period exemption amount by the number of pay periods per year. Do not round off to the nearest cent.
- Calculate the total pensionable income. This is the sum of an employee’s gross pay, including any taxable benefits and allowances the employee received in the pay period.
- Subtract the basic pay period exemption amount from step 1 from the total pensionable income amount in step 2.
- Multiply the result in step 3 by the current year’s CPP rate. The result of this is the CPP contribution you should deduct from the employee.
- As an employer, you must pay the same amount as your employee. Multiply the result from step 4 by 2.
Please refer to the CRA’s page for more information on calculating Canada Pension Plan (CPP) contribution.
How do I calculate my EI deductions?
As an employer, you must deduct Employment Insurance (EI) from the insurable earnings you pay to your employees. Follow the steps below to manually calculate an employee’s EI premium.
- Determine the employee’s insurable earnings.
- Determine the EI rate for the year.
- Multiply the amount in step 1 by the rate in step 2. The result of this is the EI to be deducted for your employee.
As an employer, you must pay 1.4 times the amount as your employee. Multiply the result from step 3 by 1.4.
Please refer to the CRA’s page for more information on calculating Employment Insurance (EI) premiums deductions.
How much do taxes take out of my pay cheque?
The amount of tax deducted from a pay cheque, aside from CPP and EI is known as income tax. In Canada, this tax varies based on where an employee lies on the federal and provincial tax bracket. Tax bracket is determined by the taxable income and there are currently five federal income tax brackets. Provincial tax varies by province.
How do I calculate Québec Pension Plan (QPP)?
As an employer in Quebec, it is your responsibility to also collect QPP contributions. In 2023, the contribution rate is 12.80% of an employee’s gross earnings. This rate includes contributions to the basic plan and the additional plan. An employer pays half (6.40%) and deducts the other half from the employee’s pay. The contribution rate is applied to only the portion of pay included between the basic exemption ($3500) and the maximum pensionable earnings.
Having operated in the province of Quebec for over 40 years, ADP Canada has significant expertise in creating and supporting French workplaces. Learn more about ADP's Payroll services.
How do I calculate Québec Parental Insurance Plan (QPIP)?
Wage earners, self-employed workers, and employers all pay premiums into QPIP. The yearly rate can be found here. QPIP premium rates and amounts for an employer in Quebec can be found here.
ADP has nearly 600 associates located in Quebec. Talk to us today and find out more about our bilingual payroll services.
