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Jobs and Taxes
First Paycheque0/3 questions
In this lesson
  1. Introduction
  2. Gross pay
  3. Common deductions
  4. Net pay
  5. Example
  6. Put it into practice
  7. Check your understanding
  8. Official sources
  9. In short
Jobs and Taxes

Understand Your First Paycheque

Learn why deposited pay may be lower than the hours you calculated.

6 minutesBeginnerReviewed July 23, 2026Lesson 10 of 15
By the end of this lesson, you will be able to…
  • Tell gross pay, deductions, and net pay apart on a pay stub.
  • Recognize the deductions that commonly appear on a Canadian pay stub.
  • Know what to do if a pay stub doesn't make sense.

Hourly wage multiplied by hours does not always equal the amount deposited. A pay stub separates gross pay, deductions and net pay.

Key takeaway

Gross pay is earnings before deductions; net pay is what's actually deposited.

Gross pay

Gross pay is earnings before deductions and may include wages, overtime, vacation pay or bonuses.

Canada-specific

Common deductions

Possible deductions include income tax, CPP or QPP, Employment Insurance, benefits and other authorized deductions.

Amounts depend on income, location, payroll period, age and employee information. There is no universal percentage, and this site does not estimate one for you.

Age matters for CPP. Contributions generally begin the month after an employee turns 18, so a younger worker may see no CPP line at all. Workers in Quebec contribute to the QPP under its own rules. Confirm your own situation with the CRA or, in Quebec, Revenu Quebec.

Net pay

Net pay is the amount remaining after deductions.

Review your hours, wage, gross pay, deductions and net pay.

Key terms in this lesson
Gross pay

Earnings before any deductions.

Net pay

The amount that remains after deductions — what actually reaches your account.

Quick check

Which of these is generally NOT a payroll deduction?

Example

Gross pay: $540 · Deductions: $58 · Net pay: $482. This is an example, not a universal tax calculation.

Sample pay stub
Gross pay
$540
Deductions
-$58
Net pay
$482

Put it into practice

0/3 done
  1. Open the Paycheque Decoder tool.Open the Paycheque Decoder
  2. Enter each deduction shown on your own pay stub.
  3. Review the net pay and percentage removed.
Check your understanding

3 questions

Progress is saved in this browser

Questions completed: 0 of 3

Question 1 of 3
What is the difference between gross pay and net pay?
Question 2 of 3
Which items commonly appear as deductions on a Canadian pay stub?
Question 3 of 3
Your pay stub shows an amount you do not understand. What should you do?

In short

  • Gross pay is earnings before deductions; net pay is what's actually deposited.
  • Common deductions include income tax, CPP or QPP, and EI.
  • Deduction amounts depend on pay period, location, age, and personal information.
  • Ask your employer or payroll contact to explain anything on your stub you don't understand.
Educational content only. TaxLoophole.ca provides general educational information and does not provide personalized tax, legal or financial advice. Rules may change and may differ based on your province, territory and circumstances. Verify important decisions with the Canada Revenue Agency, another appropriate government source or a qualified professional.

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