1. What is Ontario Pay Calculator?

The Ontario Pay Calculator helps employees and employers calculate net pay after all mandatory deductions including federal tax, Ontario provincial tax (5.05%), CPP contributions, and EI premiums.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( Gross \) — Total earnings before deductions (CAD)
• \( Federal \) — Federal income tax amount (CAD)
• \( ON \) — Ontario provincial tax at 5.05% (CAD)
• \( CPP \) — Canada Pension Plan contribution (CAD)
• \( EI \) — Employment Insurance premium (CAD)

Explanation: The calculator automatically calculates Ontario provincial tax at 5.05% of gross pay and subtracts all deductions from gross pay to determine net pay.

3. Understanding Payroll Deductions

Details: In Ontario, employees must contribute to federal tax, provincial tax (5.05%), CPP for retirement benefits, and EI for unemployment insurance. These deductions are mandatory and calculated based on earnings.

4. Using the Calculator

Tips: Enter gross pay in CAD, federal tax amount, CPP contribution, and EI premium. The calculator will automatically compute Ontario tax and net pay. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the current Ontario tax rate?
A: The basic Ontario provincial tax rate is 5.05% on taxable income.

Q2: How are CPP contributions calculated?
A: CPP contributions are calculated as a percentage of pensionable earnings between basic exemption amount and maximum pensionable earnings.

Q3: What is the EI premium rate?
A: EI premiums are calculated as a percentage of insurable earnings up to a maximum annual amount set by the government.

Q4: Are there other deductions not included?
A: This calculator includes mandatory deductions. Additional deductions like union dues, health benefits, or RRSP contributions may apply.

Q5: Is this calculator for employees or employers?
A: It can be used by both employees to estimate take-home pay and employers to calculate payroll deductions.