Ontario · 2026 CRA Rates
Ontario Raise Calculator
Find out exactly how much of your raise you actually keep after Ontario income tax, federal income tax, CPP, and EI deductions.
Calculate Your After-Tax Raise
Ontario 2026 — federal + provincial tax, CPP, CPP2, EI
Your After-Tax Raise Breakdown
Where your raise goes
| Item | Amount on raise |
|---|---|
| Gross raise | — |
| Additional federal income tax | — |
| Additional Ontario income tax | — |
| Additional CPP / CPP2 | — |
| Additional EI premium | — |
| Net raise (take-home) | — |
Note: Amounts shown are the incremental difference on the raise — not your total annual deductions.
Before vs. after your raise
Why your raise feels smaller than expected
The number on your offer letter is a gross amount. Your bank account receives the net. Between those two numbers sit federal income tax, Ontario provincial income tax, CPP contributions, and EI premiums — each of which takes a slice of every dollar you earn.
The critical point: your raise is not taxed at your blended effective rate. It is taxed at your marginal rate — the rate that applies to the highest slice of your income. If a $7,000 raise pushes income from $110,000 to $117,000 in Ontario, that $7,000 sits in the 43.4% combined marginal bracket (federal 26% + Ontario 11.16% + Ontario surtax). More than $3,000 of that raise goes to taxes before you see it.
This is normal. It is not a mistake by your employer or a bug in payroll. It is how progressive taxation works. The Ontario Raise Calculator shows you exactly what to expect.
The 2026 rate change that helps you
For 2026, the federal bottom tax rate dropped from 14.5% (2025) to 14% — the first reduction to the federal bottom bracket since 2016. If your raise keeps you below $58,523, you benefit from this change. The calculator applies the correct 2026 rates automatically.
When CPP and EI stop being deducted
CPP contributions stop once your earnings hit $74,600 (2026 YMPE). CPP2 contributions stop at $85,000. EI premiums stop at $68,900. If your current salary already exceeds these thresholds, your raise will not trigger additional CPP or EI deductions — making your net raise higher than it would be at a lower income level.
Example calculation
Scenario: Alex earns $75,000/year in Ontario and receives a raise to $85,000 — a $10,000 gross raise.
| Item | Current ($75K) | New ($85K) | Difference |
|---|---|---|---|
| Gross salary | $75,000 | $85,000 | +$10,000 |
| Federal income tax | ~$9,614 | ~$11,666 | +$2,052 |
| Ontario income tax | ~$3,884 | ~$4,800 | +$916 |
| CPP | $4,230 | $4,230 | $0 |
| CPP2 | $16 | $416 | +$400 |
| EI | $1,123 | $1,123 | $0 |
| Net income | ~$56,366 | ~$63,001 | +$6,635 |
Alex keeps approximately $6,635 of a $10,000 gross raise — about $553/month or $255 per biweekly pay period. The effective deduction rate on the raise is approximately 33.7%.
Note: CPP is maxed at both salaries (YMPE $74,600). CPP2 applies on earnings above $74,600 — at $75K it's only $16/year (on $400 above YMPE), but at $85K it's $400 (on $10,400 above YMPE). EI is also maxed at both salaries. Use the calculator above for your exact numbers.
Common scenarios
- Promotion with salary increase: You're moving from $65,000 to $80,000. Your raise crosses the second Ontario bracket ($53,891) and CPP is already near its ceiling — so most of your raise lands in higher marginal territory. Expect to keep roughly 60–65%.
- Cost-of-living adjustment: A 3% raise on $55,000 adds $1,650 gross. At that income level, your combined marginal rate (federal + Ontario) is roughly 30%. You'll keep about $1,155/year — less than it sounds on paper.
- Raise crossing a CPP/EI ceiling: If your current salary is $60,000 and your raise brings you to $75,000+, CPP contributions hit their 2026 cap at $74,600 — and CPP2 kicks in above that. The raise from $70K to $75K+ includes about $416 in new CPP2 deductions.
- High-income raise: A raise from $150,000 to $165,000 is in the top Ontario combined bracket. CPP and EI are already maxed. Tax alone claims roughly 45% of the raise — but no new payroll deductions apply.
- New job negotiation: You're deciding between $95,000 and $105,000. The $10,000 difference sits in a bracket where combined federal + Ontario marginal rates exceed 43%. Your real gain is closer to $5,700 — useful to know before you negotiate.
Methodology
This calculator computes net income at both your current and new salary independently, then reports the difference. All deductions are calculated from scratch for each salary — not estimated by percentage — which correctly handles bracket crossings, CPP ceiling interactions, and Ontario surtax triggers.
2026 rates used
| Item | 2026 Rate / Threshold | Source |
|---|---|---|
| Federal bracket 1 | 14% on first $58,523 | CRA T1 2026 |
| Federal bracket 2 | 20.5% on $58,523–$117,045 | CRA T1 2026 |
| Federal bracket 3 | 26% on $117,045–$181,440 | CRA T1 2026 |
| Federal bracket 4 | 29% on $181,440–$258,482 | CRA T1 2026 |
| Federal bracket 5 | 33% above $258,482 | CRA T1 2026 |
| Federal BPA | $16,452 | CRA 2026 |
| Ontario bracket 1 | 5.05% on first $53,891 | ON Min. Finance 2026 |
| Ontario bracket 2 | 9.15% on $53,891–$107,785 | ON Min. Finance 2026 |
| Ontario bracket 3 | 11.16% on $107,785–$150,000 | ON Min. Finance 2026 |
| Ontario bracket 4 | 12.16% on $150,000–$220,000 | ON Min. Finance 2026 |
| Ontario bracket 5 | 13.16% above $220,000 | ON Min. Finance 2026 |
| Ontario BPA | $12,989 | CRA T4032-ON 2026 |
| Ontario surtax tier 1 | 20% on Ontario tax above $5,818 | ON Min. Finance 2026 |
| Ontario surtax tier 2 | +36% on Ontario tax above $7,446 | ON Min. Finance 2026 |
| CPP rate | 5.95% (YMPE: $74,600; exempt: $3,500) | ESDC / CRA 2026 |
| CPP2 rate | 4.00% ($74,600–$85,000) | ESDC / CRA 2026 |
| EI rate | 1.63% (MIE: $68,900) | ESDC 2026 |
What this calculator does not model
- RRSP, TFSA, FHSA, or pension deductions (these reduce taxable income and would lower your tax bill)
- The Ontario Health Premium (adds up to $900/year for higher incomes)
- Other non-refundable credits (childcare, disability, tuition, union dues)
- Quebec parental insurance plan (QPIP) — this calculator is Ontario only
- Employment benefits that affect taxable income
- Year-to-date CPP/EI caps (for raises mid-year — use the full annual estimate as a guide)
Frequently asked questions
Why is my raise smaller than expected after taxes?
Because raises are taxed at your marginal rate, not your blended average rate. Every dollar of your raise sits on top of your existing income, where the highest brackets apply first. In Ontario, a raise that crosses from $90,000 to $100,000 lands in a combined marginal bracket above 43%. That means less than 57 cents of each dollar of raise reaches your bank account.
What is the "effective tax/deduction rate on your raise"?
It is the total percentage of your gross raise consumed by taxes and deductions — calculated as: 1 − (net increase ÷ gross raise). This is not the same as your blended effective tax rate on all income. It isolates the marginal impact on the raise only, which is always higher than your overall effective rate.
Does CPP or EI affect my raise calculation?
Only if your salary is below the ceiling. CPP applies on earnings between $3,500 and $74,600 (2026). CPP2 applies between $74,600 and $85,000. EI premiums apply on earnings up to $68,900. If your current salary already exceeds these ceilings, additional CPP or EI will not be deducted from your raise.
Is this calculator accurate for 2026?
Yes. It uses 2026 CRA federal brackets (14% bottom rate for the full year), 2026 Ontario provincial brackets, 2026 Ontario surtax thresholds ($5,818 and $7,446), and 2026 ESDC CPP/EI rates. Sources: CRA T4032-ON January 2026, Ontario Ministry of Finance 2026, ESDC CPP/EI rate tables 2026.
My employer said I'd get a $500/month raise. Is that gross or net?
Employer-quoted raises are almost always gross figures — the pre-tax amount. If they quoted you "$500/month more," that is approximately $6,000/year gross. Your net gain will be lower. Use this calculator with your current and new annualized salaries to see what you'll actually take home.
Can I reduce the tax impact of a raise?
Yes — the most effective tool is an RRSP contribution. RRSP deductions reduce your taxable income, which can lower the amount of your raise subject to higher brackets. For example, contributing the raise amount to an RRSP defers the tax entirely until withdrawal. You receive the raise now, pay the tax later (ideally at a lower retirement income rate).
What is the Ontario surtax and does it affect my raise?
The Ontario surtax is an additional tax on top of your Ontario provincial tax — applied when your Ontario tax payable exceeds $5,818 (20% surtax) or $7,446 (an additional 36% = 56% total surtax). This kicks in at incomes roughly above $94,000–$100,000 in Ontario. If your raise pushes Ontario tax above these thresholds, the effective rate on your raise increases significantly.
What if my raise is a one-time bonus, not a salary increase?
A one-time bonus is also taxed — typically at your marginal rate for the year it is received. Enter your current salary as your regular annual salary and your "new" salary as your regular salary plus the bonus. The calculator will show you the net amount of the bonus after all deductions.
Related calculators
Part of the Calc-HQ.ca Canadian calculator network.
Also from the Ontario cluster: Ontario Income Tax Calculator — see your full annual tax picture at any salary level.
Ontario Take-Home Pay Calculator — calculate your net pay per pay period.