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Payroll Deductions Online Calculator Ontario 2020

Reviewed by Calculator Editorial Team

Calculating payroll deductions in Ontario for 2020 requires understanding several key components including Employment Insurance (EI), Canada Pension Plan (CPP), and income tax deductions. This calculator provides a straightforward way to determine these deductions based on your gross salary.

Introduction

Payroll deductions in Ontario for 2020 include mandatory contributions to Employment Insurance (EI) and the Canada Pension Plan (CPP), as well as income tax deductions. These deductions reduce your take-home pay but are essential for your employment benefits and retirement savings.

This guide explains how to calculate these deductions and provides a calculator to quickly determine your net pay after deductions.

How the Calculator Works

The payroll deductions calculator for Ontario 2020 uses the following inputs to determine your deductions:

  • Gross salary (before deductions)
  • Employment Insurance (EI) rate (2.7% in 2020)
  • Canada Pension Plan (CPP) rate (4.95% in 2020)
  • Income tax rate (varies based on tax bracket)

The calculator applies these rates to your gross salary to determine the total deductions and your net pay.

Types of Payroll Deductions

Employment Insurance (EI)

EI is a federal program that provides temporary income support to workers who lose their jobs through no fault of their own. The EI rate for 2020 was 2.7% of your gross salary.

Canada Pension Plan (CPP)

CPP is a retirement savings program where both employees and employers contribute. The CPP rate for 2020 was 4.95% of your gross salary.

Income Tax

Income tax rates in Ontario vary based on your taxable income. For 2020, the progressive tax rates were:

  • 15% for the first $44,701 of taxable income
  • 20.5% for taxable income between $44,701 and $89,404
  • 26% for taxable income between $89,404 and $134,409
  • 29% for taxable income between $134,409 and $205,842
  • 33% for taxable income over $205,842

Formula Used

The total payroll deductions are calculated as follows:

Total Deductions = (Gross Salary × EI Rate) + (Gross Salary × CPP Rate) + (Gross Salary × Income Tax Rate) Net Pay = Gross Salary - Total Deductions

Where:

  • EI Rate = 2.7% (0.027)
  • CPP Rate = 4.95% (0.0495)
  • Income Tax Rate depends on your tax bracket

Worked Example

Let's calculate the payroll deductions for someone earning $50,000 gross salary in 2020.

  1. Determine the income tax rate: $50,000 falls into the 20.5% tax bracket.
  2. Calculate EI deduction: $50,000 × 2.7% = $1,350
  3. Calculate CPP deduction: $50,000 × 4.95% = $2,475
  4. Calculate income tax: $50,000 × 20.5% = $10,250
  5. Total deductions: $1,350 + $2,475 + $10,250 = $14,075
  6. Net pay: $50,000 - $14,075 = $35,925

Note: This example uses the 20.5% tax rate. Your actual tax rate may vary based on your specific tax situation.

Frequently Asked Questions

What are the payroll deduction rates for Ontario in 2020?

The payroll deduction rates for Ontario in 2020 were:

  • Employment Insurance (EI): 2.7%
  • Canada Pension Plan (CPP): 4.95%
  • Income Tax: Progressive rates from 15% to 33%

How do I calculate my net pay after deductions?

Subtract the total deductions (EI, CPP, and income tax) from your gross salary to determine your net pay. Use the calculator above for a quick calculation.

Are there any additional deductions I should consider?

Additional deductions may include provincial sales tax (PST), union dues, or other voluntary contributions. These are not included in the standard payroll deductions calculator.