Why your raise feels smaller than expected
Your offer letter shows a gross raise. Your bank account receives the net raise. Between those numbers, federal and Ontario income tax, CPP contributions, and EI premiums each take a portion. Your raise is taxed at your marginal rate — the rate on your highest slice of income — not your average effective rate. If your raise crosses a bracket threshold or triggers the Ontario surtax, the deduction rate on the raise alone can be noticeably higher than your overall effective rate. CPP and EI deductions may also change depending on whether your current salary is already near or above the annual maximums. For detailed questions about brackets, surtax, and payroll deductions, see the FAQ.
What Is Not Included
Results are estimates for a typical Ontario employee with a single employer and may not reflect your actual tax situation. This calculator does not account for RRSP contributions, childcare deductions, union dues, registered pension plan contributions, or other deductions that reduce taxable income. It does not include charitable donation credits, tuition or medical expense credits, spousal or dependent amounts, the Canada Workers Benefit, or other individual tax credits. The Ontario Health Premium is not included in the raise deduction calculation. Investment income, self-employment income, and non-standard pay arrangements are outside scope. If you have multiple income sources or situation-specific deductions, your actual results will differ. For precise figures, consult a tax professional or the CRA Payroll Deductions Online Calculator.
Example: How a Raise Changes Take-Home Pay
For example, a raise can increase your taxable income and may also change CPP, EI, Ontario tax, federal tax, and Ontario Health Premium exposure. The calculator estimates the after-tax difference between your current annual salary and new annual salary so the raise is framed as take-home pay, not just gross pay.