Ontario Tax Calculator 2026 – Federal and Ontario Tax, CPP, EI and Take-Home Pay
One salary, five deductions, two levels of government. This calculator runs the official 2026 figures for Ontario in Canadian dollars — federal tax, Ontario tax with its surtax and health premium, CPP, CPP2 and EI — so you can see exactly what leaves your pay and what actually lands in your account.
Your 2026 income (C$)
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Your 2026 take-home pay
- Every rate, threshold and cap comes from the CRA payroll guide T4032-ON for 2026 — the same source an Ontario payroll department uses.
- CPP, CPP2 and EI stop at their 2026 caps, which is why they stay thin bars even on a large salary.
- The surtax is a tax on your tax: Ontario’s published top rate of 13.16% really reaches 20.53%, and the health premium inside the figure is not a bracket at all.
- Where each dollar of your income goes
- Keep going on the same numbers
- How it works
- The formula behind the Ontario estimate
- The official 2026 figures this calculator runs on
- Two Ontario wrinkles worth understanding
- Two incomes, one engine: C$85,000 versus C$100,000
- The surtax: how Ontario’s top rate really reaches 20.53%
- CPP, CPP2 and EI: the caps that shape every Ontario paycheque
- What this estimate is, and what it is not
- The health premium: a separate charge inside the Ontario figure
Where each dollar of your income goes
Your total income, split live between the five deductions and the pay you keep. At higher incomes the tax slices grow; CPP, CPP2 and EI stop at their 2026 caps, which is why they stay thin bars even on a large salary.
The bar, the legend and every figure in the calculator rebuild live from your inputs above — change the income and watch the slices move.
Keep going on the same numbers
An annual Ontario picture usually sits next to a per-paycheque one. These tools pick up where this estimate stops.
How it works
Three steps between an Ontario salary and the number that reaches your account.
Payroll deductions first
CPP takes 5.95% of employment income between C$3,500 and C$74,600, CPP2 takes 4% of the slice from C$74,600 to C$85,000, and EI takes 1.63% up to C$68,900 of insurable earnings. On C$85,000 all three are at their 2026 maximums: C$4,230.45, C$416.00 and C$1,123.07.
Taxable income, then two tax bills
The enhanced part of CPP — the 1% first additional portion plus all of CPP2 — is deducted before tax, leaving taxable income of C$83,873 on the default. Federal brackets and credits produce C$10,226.60; Ontario brackets, the surtax and the health premium produce C$5,558.90.
What is left is yours
Total deductions of C$21,555.02 on C$85,000 leave take-home pay of C$63,444.98 — C$5,287.08 a month, or C$2,440.19 every two weeks across 26 pay periods. The effective rate, everything included, is 25.36%.
The formula behind the Ontario estimate
Step 1 — payroll. On C$85,000 of employment income, CPP is capped at C$4,230.45, CPP2 at C$416.00 and EI at C$1,123.07. The CPP enhanced deduction is the 1% first additional portion of CPP (C$711.00 on the maximum contributory earnings) plus all C$416.00 of CPP2: C$1,127.00.
Step 2 — taxable income. C$85,000 − C$1,127.00 = C$83,873. The same taxable income feeds both the federal and the Ontario calculation.
Step 3 — federal tax. The brackets charge C$13,389.97. Credits at the 14% lowest rate — the basic personal amount of C$16,452, the Canada employment amount of C$1,501, the base CPP portion of C$3,519.45 and EI premiums of C$1,123.07 — total C$3,163.37, leaving federal tax of C$10,226.60.
Step 4 — Ontario tax. The Ontario brackets charge C$5,464.85. The basic personal credit (C$12,989 at 5.05%) removes C$655.94, leaving C$4,808.90 — below the C$5,818 surtax threshold, so the surtax is C$0, and at this income the LIFT credit has phased out completely. The health premium on C$83,873 of taxable income is C$750. Ontario tax: C$5,558.90.
Step 5 — take-home. C$10,226.60 + C$5,558.90 + C$4,230.45 + C$416.00 + C$1,123.07 = C$21,555.02 of deductions, so C$85,000 of income becomes C$63,444.98 of take-home pay.
The official 2026 figures this calculator runs on
Every rate, threshold and cap below comes from the Canada Revenue Agency payroll guide T4032-ON for 2026 and Ontario publications — the same sources an Ontario payroll department uses.
| Federal rate | Taxable income range (C$) |
|---|---|
| 14% | C$0 – C$58,523 |
| 20.5% | C$58,523 – C$117,045 |
| 26% | C$117,045 – C$181,440 |
| 29% | C$181,440 – C$258,482 |
| 33% | over C$258,482 |
| Ontario rate | Taxable income range (C$) |
|---|---|
| 5.05% | C$0 – C$53,891 |
| 9.15% | C$53,891 – C$107,785 |
| 11.16% | C$107,785 – C$150,000 |
| 12.16% | C$150,000 – C$220,000 |
| 13.16% | over C$220,000 |
| Item (2026) | Figure |
|---|---|
| CPP — rate, earnings band, maximum | 5.95% on C$3,500 – C$74,600 · max C$4,230.45 |
| CPP2 — rate, earnings band, maximum | 4% on C$74,600 – C$85,000 · max C$416.00 |
| EI — rate, insurable earnings, maximum | 1.63% up to C$68,900 · max C$1,123.07 |
| Federal basic personal amount | C$16,452, phasing down to C$14,829 between net income of C$181,440 and C$258,482 |
| Canada employment amount (maximum) | C$1,501 |
| Ontario basic personal amount | C$12,989 (credit worth C$655.94 at 5.05%) |
| Ontario surtax | 20% of basic Ontario tax over C$5,818, plus 36% of the amount over C$7,446 |
| Ontario health premium | C$0 at taxable income of C$20,000 or less, rising in bands to C$900 above C$200,600 |
Sources: CRA T4032-ON Payroll Deductions Tables (January 2026) for the federal and Ontario brackets, personal amounts, surtax, health premium formula, CPP, CPP2 and EI figures, and ontario.ca for the health premium and the Low-Income Workers Tax Credit (LIFT).
Two Ontario wrinkles worth understanding
The surtax and the health premium are the two pieces most Ontario pay estimates quietly get wrong.
Ontario does not stop at its five bracket rates. Once your basic Ontario tax — the bracket tax minus the basic personal credit — passes C$5,818, the province adds a surtax of 20% on the amount above that line. Past C$7,446 of basic tax, a second slice of 36% applies on top. A taxpayer deep in both tiers pays 56% extra on the top slice of their basic Ontario tax, which is how a 13.16% top bracket rate becomes an effective top Ontario rate of about 20.53% before the federal side is even added.
The surtax is also why two people in the same Ontario bracket can face different marginal rates: below C$5,818 of basic tax there is no surtax at all (the default C$85,000 salary sits just under the line), while above C$7,446 every extra dollar of basic Ontario tax is grossed up by the full 1.56 factor. This calculator applies both tiers exactly, on the basic tax after the basic personal credit and before the LIFT credit.
The Ontario health premium is charged on taxable income, not on tax, and it climbs in steps with phase-in ranges between them. Nothing is owed at C$20,000 of taxable income or less. From there the premium phases in at 6% of the excess until it reaches C$300 at C$25,000, sits flat through the rest of that band, phases up again to C$450 by C$38,500, then to C$600 by C$48,600 and to C$750 by C$72,600. Only above C$200,000 does it move again, reaching the C$900 maximum at C$200,600.
Two consequences follow. First, most full-time Ontario workers pay exactly C$750 — the long flat band from C$72,600 to C$200,000 of taxable income covers the bulk of salaries. Second, inside a phase-in range the premium adds a real marginal cost — 25 cents per extra dollar of taxable income in the C$48,000 to C$48,600 and C$72,000 to C$72,600 ranges — which is why this calculator runs the official formula rather than a rounded table.
Two incomes, one engine: C$85,000 versus C$100,000
The same 2026 engine, the same CRA T4032-ON figures, two different incomes. The comparison shows where the extra C$15,000 actually goes.
At C$85,000 of employment income, take-home pay is C$63,444.98 a year, or C$5,287.08 a month and C$2,440.19 every two weeks. Total deductions are C$21,555.02, an effective rate of 25.36%, and the marginal rate on the next dollar is 29.65%, made of federal 20.50% plus Ontario 9.15%, with the surtax effect where it applies. At C$100,000, take-home pay is C$73,924.80 a year, or C$6,160.40 a month and C$2,843.26 every two weeks. Total deductions are C$26,075.20, an effective rate of 26.08%, and the marginal rate is 31.48%.
| Employment income | Take-home per year | Total deductions | Effective rate | Marginal rate |
|---|---|---|---|---|
| C$85,000 | C$63,444.98 | C$21,555.02 | 25.36% | 29.65% |
| C$100,000 | C$73,924.80 | C$26,075.20 | 26.08% | 31.48% |
The extra C$15,000 of income produces C$10,479.82 of extra take-home pay, and C$4,520.18 of extra deductions, which is 30.13% of the raise. That is close to, but not equal to, either marginal rate, because the raise crosses payroll caps as well as tax brackets: CPP is already capped at C$4,230.45 and CPP2 at C$416.00 on the C$85,000 income, so the extra C$15,000 attracts no further CPP or CPP2, while EI is already capped at C$1,123.07 as well. The extra deductions on the raise are therefore almost entirely income tax, federal and Ontario, plus the health premium effect, and the payroll lines that dominate a lower income’s deductions contribute nothing further at these levels. That is why the effective rate rises only slowly, from 25.36% to 26.08%, even as the marginal rate jumps from 29.65% to 31.48%: the caps flatten the payroll side while the brackets steepen the tax side.
The surtax: how Ontario’s top rate really reaches 20.53%
Ontario’s published top bracket rate is 13.16%, but no high earner actually pays 13.16% at the top. The surtax is the reason, and it is a tax on your tax.
Once basic Ontario tax, the bracket tax minus the basic personal credit, passes C$5,818, the province adds a surtax of 20% on the amount above that line. Past C$7,446 of basic tax, a second slice of 36% applies on top. A taxpayer deep in both tiers therefore pays 56% extra on the top slice of their basic Ontario tax: the 13.16% bracket rate, multiplied by 1.56, becomes an effective top Ontario rate of about 20.53%, before the federal side is even added. That is the figure this page quotes, and it is the figure that explains why Ontario’s marginal rate at high incomes looks so much larger than either published schedule suggests on its own.
On the default C$85,000 example the surtax does not bite at all. The Ontario brackets charge C$5,464.85, the basic personal credit removes C$655.94, leaving basic Ontario tax of C$4,808.90, below the C$5,818 surtax threshold, so the surtax is C$0 and the LIFT credit has phased out completely at this income. The health premium on C$83,873 of taxable income is C$750, giving Ontario tax of C$5,558.90. The surtax is therefore invisible at C$85,000 and decisive at higher incomes, which is exactly the pattern that catches people out: a taxpayer who has never seen a surtax line on their assessment can meet it suddenly after a raise, a bonus, or a second income, and the marginal rate on that extra income will be far higher than the bracket rate they were expecting.
The planning consequence is narrow but real. Income that can be timed, such as a bonus or a capital gain, should be timed with the surtax thresholds in mind, because a dollar that lands just above the C$7,446 basic-tax line costs 56% more Ontario tax than the same dollar just below the C$5,818 line would have cost in surtax terms. And any comparison of Ontario with another province that uses only the published bracket rates understates Ontario’s top marginal rate by the whole surtax effect. The honest comparison uses the surtax-inclusive marginal rate, which is the rate this calculator reports.
CPP, CPP2 and EI: the caps that shape every Ontario paycheque
Three payroll lines, three caps, and a combined effect that flattens deductions once income passes C$85,000.
CPP is charged at 5.95% on earnings from C$3,500 to C$74,600, to a maximum of C$4,230.45. CPP2, the second tier, is charged at 4% on earnings from C$74,600 to C$85,000, to a maximum of C$416.00. EI is charged at 1.63% on insurable earnings up to C$68,900, to a maximum of C$1,123.07. On the default C$85,000 income all three caps are exactly reached: CPP C$4,230.45, CPP2 C$416.00, EI C$1,123.07. That is not a coincidence. C$85,000 is the top of the CPP2 band, so it is the income at which the payroll system stops taking more from each extra dollar, and the comparison in the first section shows the consequence: the extra C$15,000 to C$100,000 attracts no further CPP, CPP2 or EI at all.
Below the caps the picture is different, and the payroll lines are a large share of deductions. A worker earning well below C$68,900 pays CPP, CPP2 where applicable, and EI on nearly every dollar, and the combined payroll rate on those dollars is 5.95% plus 4% in the CPP2 band plus 1.63% for EI, before any income tax is considered. That is why lower incomes can feel heavily deducted even at low tax brackets: the payroll lines are flat-rate charges on the first dollars, not progressive charges on the last ones. The enhanced CPP deduction softens the income-tax side slightly: the 1% first additional portion of CPP, C$711.00 on the maximum contributory earnings, plus all C$416.00 of CPP2, gives a C$1,127.00 deduction from income before the tax brackets are applied, which is why taxable income on the default example is C$83,873 rather than C$85,000.
The employer side is the mirror image, and it is worth stating because it never appears on the pay stub as income. The employer matches CPP and CPP2 dollar for dollar and pays EI at 1.4 times the employee premium, so the true cost of a C$85,000 salary is considerably more than C$85,000. A worker negotiating a raise should know that a C$1,000 raise costs the employer more than C$1,000 while the payroll caps are not yet reached, and exactly C$1,000 once they are. That asymmetry is part of why raises get harder to win at higher incomes, and it is entirely a product of the caps described here.
What this estimate is, and what it is not
An annual engine built from the CRA payroll tables, with stated limits. The limits matter as much as the figures.
This calculator estimates Ontario take-home pay for employment income, using the 2026 federal brackets from 14% to 33%, the Ontario brackets from 5.05% to 13.16%, the basic personal amounts, the surtax, the health premium, and the CPP, CPP2 and EI figures from CRA guide T4032-ON for 2026. It uses basic personal claim amounts only, federal TD1 and Ontario TD1ON, which means it does not model other credits, deductions, or claim amounts a particular worker may have. A worker with significant credits beyond the basic amounts, with income that is not employment income, or with a TD1 that claims more than the basic amounts, will have a different real tax bill, and the difference can be large.
It is also an Ontario calculator, not a Canadian one. The Ontario brackets, surtax, health premium and LIFT credit are Ontario-specific, and another province’s figures would produce a different result on the same income. The payroll companion on this page’s strip, the CRA payroll calculator, takes the same annual engine and spreads it across pay periods, so the two tools agree on the year and differ only in the period view. And like every estimate on this site, this one is not a T1 return: it does not file anything, it does not account for the final reconciliation of CPP and EI on the return, and it should be checked against a real return or a payroll department’s figures before being used for anything that depends on the exact dollar.
The health premium: a separate charge inside the Ontario figure
The Ontario tax figure on this page includes the health premium, but the premium is not a tax bracket, and it behaves differently from every bracket in the calculation.
The premium is C$0 at taxable income of C$20,000 or less, and it rises in bands to C$900 above C$200,600 of taxable income. On the default example, taxable income of C$83,873 carries a premium of C$750, which is added to the basic Ontario tax after the surtax calculation, giving Ontario tax of C$5,558.90 from basic tax of C$4,808.90 plus the C$750 premium. The premium is therefore visible inside the Ontario total but invisible inside the bracket rates, which is why a taxpayer who adds up the Ontario brackets alone will fall C$750 short of the Ontario figure on the default example, and by a different amount at any other income.
Two features of the premium matter for planning. First, it is banded, not marginal: moving across a premium band boundary changes the premium by a step, not by a percentage of the extra income, so the marginal rate on a dollar that crosses a boundary is temporarily much higher than the bracket rate suggests, and then returns to normal. Second, it is not OHIP coverage. Paying the premium does not buy health insurance, and the common confusion between the premium and OHIP coverage is worth correcting wherever it appears: OHIP eligibility is a residency matter, and the premium is a revenue charge collected through the tax system. A taxpayer who budgets for Ontario tax should budget for the premium as part of it, and a taxpayer comparing Ontario with another province should compare the surtax-inclusive, premium-inclusive marginal rate, because that is the rate actually paid on the next dollar.
RRSP withdrawals and Ontario tax: taxed as income, withheld at source
The calculator leaves RRSP deductions out. Withdrawals are a different story: they are taxed as income, and the tax is withheld before the money reaches you.
Every dollar withdrawn from an RRSP is added to your taxable income for the year and taxed at your marginal rate, federal and Ontario together. The financial institution withholds tax at the time of withdrawal, at a flat rate set by the CRA that depends on the size of the withdrawal: 10% up to C$5,000, 20% from C$5,001 to C$15,000, and 30% over C$15,000, outside Quebec. On a C$10,000 withdrawal the institution withholds C$2,000 and you receive C$8,000; on a C$20,000 withdrawal it withholds C$6,000 and you receive C$14,000.
The withholding is a prepayment, not the final tax. The withdrawal goes on the return — line 12900, with the tax withheld on line 43700 — and the real tax is set when you file, at your marginal rate for the full year. If your marginal rate is higher than the withholding rate, you owe more at filing time; if it is lower, you get a refund. Splitting a withdrawal into smaller ones to get a lower withholding rate does not cut the tax: the CRA treats a series of withdrawals made to minimise withholding as a single larger withdrawal. Two withdrawals are exempt from withholding altogether: the Home Buyers’ Plan and the Lifelong Learning Plan, which follow their own repayment rules. And the room does not come back — unlike a TFSA, an RRSP withdrawal permanently loses the contribution room it used.
Ontario tax questions, answered
What is included, what the Ontario-only pieces are, and where an estimate like this one stops.
What does this Ontario tax calculator include?
It includes all five deductions a typical Ontario employee sees in 2026: federal income tax, Ontario income tax with the surtax and the health premium, CPP, CPP2 and EI. On the credit side it includes the federal basic personal amount (with the high-income phase-out), the Canada employment amount, the base CPP portion and EI premiums as federal credits, the Ontario basic personal amount, and the LIFT credit for lower incomes. All figures are the official CRA T4032-ON and Ontario amounts for 2026, in Canadian dollars.
What is the Ontario surtax?
The surtax is an extra Ontario tax charged on your basic Ontario tax, not on your income. For 2026 it is 20% of the basic Ontario tax above C$5,818, plus a further 36% of the amount above C$7,446. Because it stacks, the top Ontario bracket rate of 13.16% becomes about 20.53% for taxpayers in both surtax tiers. It is calculated after the Ontario basic personal credit and before the LIFT credit and the health premium.
Is the Ontario health premium the same as OHIP coverage?
No. The health premium is a separate amount collected through the tax system, and Ontario states that it is not linked to OHIP eligibility — you owe it based on taxable income whether or not you use health services. For 2026 it is C$0 at taxable income of C$20,000 or less and rises through a series of bands to a maximum of C$900 above C$200,600. Most full-time workers land on the long flat band and pay C$750.
What is CPP2, and why is there a second CPP line?
CPP2 is the second additional Canada Pension Plan contribution, introduced as part of the CPP enhancement. Regular CPP for 2026 takes 5.95% of earnings between C$3,500 and C$74,600, to a maximum of C$4,230.45. CPP2 then takes 4% of the next slice of earnings — from C$74,600 up to C$85,000 — to a maximum of C$416.00. Only higher earners pay it, and like the enhanced part of regular CPP it is deducted from income before tax rather than claimed as a credit.
What is the LIFT credit, and who gets it?
The Low-income Individuals and Families Tax Credit — Ontario also calls it the Low-Income Workers Tax Credit — reduces Ontario tax for people with employment income. It is the lowest of C$875 and 5.05% of your employment income, reduced by 5% of net income above C$32,500, which phases it out completely by C$50,000 for an individual. It can reduce your Ontario income tax to zero but cannot reduce the health premium. Ontario publishes these parameters as its current rules (presented as applying from 2022 onward), and this calculator applies them on that basis.
Why is this an estimate and not a T1 return?
A real T1 return layers on many things this calculator deliberately leaves out: RRSP deductions, tuition, medical and donation credits, child care expenses, capital gains rates, rental and business details, and family-level credits and benefits. Self-employed income also follows different CPP rules — both the employee and employer shares — and a different filing path. Treat the result here as an accurate picture of the standard employee deductions for 2026, and file the actual return, or use tax software or an accountant, for the binding figure.
Why is my effective rate lower than my marginal rate?
Because the effective rate averages over every dollar, while the marginal rate describes only the next one. On C$85,000 of income, total deductions are C$21,555.02, an effective rate of 25.36%, but the marginal rate on the next dollar is 29.65%. The gap exists for three reasons: the first dollars are taxed at the lowest bracket rates, the basic personal amounts shelter the first dollars entirely, and the payroll lines are capped, so the highest dollars attract no further CPP, CPP2 or EI. A raise is taxed at the marginal rate, but the whole income is never taxed at the marginal rate, and confusing the two overstates the tax bill on any income.
When does the Ontario surtax start to apply?
When basic Ontario tax, the bracket tax minus the basic personal credit, passes C$5,818. Below that line there is no surtax at all: on the default C$85,000 example, basic Ontario tax is C$4,808.90, so the surtax is C$0. Above C$5,818, the province adds 20% on the amount above the line, and past C$7,446 of basic tax a second slice of 36% applies on top, so a taxpayer deep in both tiers pays 56% extra on the top slice of basic Ontario tax. That is how the published 13.16% top bracket rate becomes an effective top Ontario rate of about 20.53%. The surtax is invisible at C$85,000 and decisive at higher incomes, which is why a raise can bring a marginal rate jump that no bracket table alone predicts.
What is the LIFT credit, and why is it zero here?
LIFT, the Low-Income Workers Tax Credit, is an Ontario credit for low-income workers, and it phases out as income rises. At C$85,000 of income it has phased out completely, which is why it contributes nothing to the default example’s Ontario tax of C$5,558.90. The phase-out is the reason a low-income worker’s marginal rate can look surprisingly high in the phase-out range: each extra dollar of income not only attracts tax, it also reduces the credit. At C$85,000 that effect is finished, and the marginal rate is the straightforward combination of the federal and Ontario bracket rates with the surtax effect where it applies. A worker at a much lower income should expect LIFT to feature in their calculation, and should check the current LIFT parameters rather than assuming it is zero.
Why does my pay stub differ from this calculator?
Most often because the calculator uses basic personal claim amounts only, federal TD1 and Ontario TD1ON, while a real pay stub reflects the worker’s actual TD1 claims, other credits, and any deductions or claim amounts beyond the basic ones. Timing also matters: CPP and EI stop partway through the year once their annual maximums are reached, so a late-year paycheque is larger than an early-year one on the same salary, while this annual engine uses the capped full-year amounts throughout. And this calculator is not a T1 return: it does not reconcile CPP and EI on the return, it does not model income that is not employment income in the same way, and it should be checked against a payroll department’s figures before being used for anything that depends on the exact dollar.
How much tax is deducted from a paycheque in Ontario?
Five things, at capped rates: federal income tax and Ontario income tax, worked out from the CRA T4032-ON tables; CPP at 5.95% of employment income between C$3,500 and C$74,600, capped at C$4,230.45; CPP2 at 4% of the slice from C$74,600 to C$85,000, capped at C$416.00; and EI at 1.63% up to C$68,900 of insurable earnings, capped at C$1,123.07. The exact split for your income is on the calculator above.
How are dividends taxed in Ontario?
Dividends are taxed differently from salary, and the difference is deliberate: the company has already paid tax on the profits, so the shareholder is not taxed twice on the same dollars. Eligible dividends — generally from large public Canadian corporations — are grossed up and then a federal and provincial dividend tax credit is applied, which brings the effective rate well below the rate on the same dollars as salary. Non-eligible dividends, usually from small private corporations, get a smaller gross-up and a smaller credit. Capital gains are taxed differently again: only half the gain is included in income. The calculator does not cover dividends or capital gains, so a return with significant investment income needs the full T1 treatment.
How much tax will I pay on an RRSP withdrawal in Ontario?
The withdrawal is added to your taxable income and taxed at your marginal rate, federal and Ontario together. The institution withholds 10% up to C$5,000, 20% from C$5,001 to C$15,000, and 30% over C$15,000 — so a C$10,000 withdrawal arrives as C$8,000. That withholding is only a prepayment: the final tax is set when you file, and you owe more or get a refund depending on your marginal rate for the year. Home Buyers’ Plan and Lifelong Learning Plan withdrawals are exempt from withholding under their own rules.
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Related guides
Deeper reading on Ontario tax.