Short answer: A pay stub shows your gross pay (what you earned), your deductions (income tax, pension contributions and Employment Insurance premiums, plus any benefits), and your net pay (what is deposited in your bank).
What are the parts of a pay stub?
- Pay period: the dates the payment covers.
- Earnings: regular hours and rate, overtime, vacation pay, bonuses.
- Gross pay: total earnings before deductions.
- Deductions: amounts taken off, listed one by one.
- Net pay: your take-home amount.
- Year-to-date (YTD): running totals since January 1.
What are the standard deductions?
| Deduction | What it is for |
|---|---|
| Income tax | Federal and provincial tax paid in advance on your behalf |
| CPP (or QPP in Quebec) | Contributions to the public pension plan |
| EI | Employment Insurance premiums, which fund benefits if you lose your job or take certain leaves |
| QPIP (Quebec only) | Quebec’s parental insurance plan |
Your employer also pays its own share of pension and EI on top of what comes off your pay.
What other deductions might appear?
Depending on the job: health and dental plan premiums, a workplace pension or group retirement savings plan, union dues, and repayment of advances. An employer cannot deduct for things like cash shortages or uniforms unless the law in your province allows it and, usually, you have agreed in writing.
Why does your first pay look small?
Often you were paid for only part of a pay period, or the employer holds back a week. Check the pay period dates. Tax may also look high or low until the payroll system has your tax credit form, which you fill in when you start.
What is vacation pay?
Employees earn vacation pay as a percentage of their wages. Some employers pay it on every cheque, and others hold it until you take time off. Your stub should show which.
What is a T4?
A slip your employer provides by the end of February each year, summarizing your earnings and deductions for the previous year. You use it to file your tax return. Keep your final pay stub of the year to check the T4 against.
What if something looks wrong?
Ask payroll or your manager first; most errors are simple. If it is not resolved, your provincial employment standards office can help. See your basic rights at work.
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