Payroll Deductions Calculator

How are CPP and EI deductions calculated in Ontario?

In 2026, CPP is calculated at 5.95% of pensionable earnings (gross pay minus the basic exemption of $3,500 annually), with a maximum annual contribution of $4,055.25. EI is 1.66% of insurable earnings up to a maximum of $1,049.12 annually. Ontario employers in Mississauga, Toronto, and across the GTA must withhold these amounts from employee paycheques and remit them to the CRA along with matching employer contributions.

What is the federal basic personal amount for 2026?

The federal basic personal amount for 2026 is $15,705. This means employees can earn up to this amount before paying federal income tax. Claim Code 1 represents the standard claim. Employees with additional deductions or credits may use a higher claim code. Our Mississauga CPA team helps Ontario businesses set up accurate payroll tax withholdings based on employee TD1 forms.

How much should I withhold for provincial tax in Ontario?

Ontario provincial tax rates for 2026 start at 5.05% on the first $51,446 of taxable income, increasing progressively to 13.16% on income over $220,000. The Ontario basic personal amount is $11,865. Businesses in Mississauga, Brampton, Oakville, and across the Greater Toronto Area must calculate provincial withholdings based on annualized income and apply the correct tax brackets. Our CPA firm provides payroll compliance services for Ontario employers.

What happens if I don't remit payroll deductions on time?

The CRA imposes penalties for late or missed payroll remittances: 3% if 1-3 days late, 5% if 4-5 days late, 7% if 6-7 days late, and 10% if more than 7 days late or if you fail to remit. Repeat offences can result in increased penalties up to 20%. Ontario businesses must remit deductions monthly, quarterly, or more frequently depending on their average monthly withholding amount. Insight Accounting helps GTA businesses stay compliant with CRA payroll deadlines.

Should I hire a CPA for payroll in Ontario?

Yes. Ontario payroll involves CPP, EI, federal and provincial tax withholdings, WSIB, EHT (for employers with payroll over $490,000), and complex regulations. Mistakes can result in CRA penalties, employee disputes, and audit risk. A Mississauga CPA ensures accurate calculations, timely remittances, T4 preparation, and compliance with Ontario and federal payroll laws. Insight Accounting CPA offers full-service payroll for businesses in Toronto, Mississauga, and across the GTA.