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Gross Pay and Payroll Basics in Canada

Understand pre-deduction earnings, separate gross pay from net pay, identify common earning components and avoid using a broad gross-pay estimate as the wage base for every statutory formula.

Gross-pay resources

Start with the guide when you need to decide which earnings belong in the number, then use the calculator for broad pre-deduction arithmetic.

Three payroll numbers to keep separate

Before deductions

Gross pay

Earnings for the pay period before income tax, CPP or QPP, EI and other deductions.

Withholdings

Payroll deductions

Amounts calculated under current tax, contribution, premium, court-order or authorized-deduction rules.

After deductions

Net or take-home pay

The amount remaining after deductions. The current WageWise Gross Pay Calculator does not estimate this figure.

Common gross-pay components

Base earnings

Hourly or salary pay

Regular hours multiplied by a wage, or salary allocated to the selected pay period.

Variable earnings

Additional hours and premiums

User-entered additional-rate earnings and shift premiums, without deciding legal entitlement.

Other earnings

Tips, bonuses and commissions

Amounts entered for the pay period, which may not repeat when annualized.

Important: A broad gross-pay estimate is not automatically taxable income, insurable earnings, pensionable earnings or the correct wage base for vacation, holiday, overtime or termination calculations. Those definitions depend on the applicable rule and purpose.

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