Your take‑home pay in Ontario can shift a lot throughout the year, and it’s rarely caused by just one thing. Raises, bonuses, overtime, and even stable salaries interact with Ontario’s progressive tax system and annual CPP/EI resets, creating changes that catch many workers off guard.
These factors explain why paycheques fluctuate, but the real impact depends on your income, pay frequency, and deductions. This page outlines the causes, but the only way to see your exact change is to calculate your own take‑home pay.
Estimate your take-home pay and check our hub for related topics.
Why is it the more money I make and the more taxes they take?
Your taxes increase as your income rises because Canada uses a progressive tax system. Instead of taxing all your income at one flat rate, each portion of what you earn is taxed in layers. When your salary goes up, the next dollars you earn fall into a higher marginal bracket, so they’re taxed at a higher rate than the rest of your income. For example, if you normally pay around 20% tax on a $70,000 salary and your income increases to $80,000, only the extra $10,000 is taxed at the higher rate — not your entire income.
CPP, EI and other benefits
CPP (Canada Pension Plan) and EI (Employment Insurance) are federal contributions taken from every eligible paycheque in Canada. These deductions are mandatory and help fund retirement benefits (CPP) and income support during job loss (EI).
Depending on your employer and type of work, you may also see additional deductions such as:
- health insurance premiums
- dental plans
- extended medical coverage
- union dues
- company pension contributions
These extra benefits vary by employer and are subtracted from your gross pay, reducing your final take‑home amount.
Increase in tax brackets
Ontario has tax brackets for each year depending on your gross income. Below is the official tax bracket as of 2025.
| Tax Rate | Taxable Income Threshold |
|---|---|
| 5.05% | on the portion up to $52,886 |
| 9.15% | on the portion over $52,886 up to $105,775 |
| 11.16% | on the portion over $105,775 up to $150,000 |
| 12.16% | on the portion over $150,000 up to $220,000 |
| 13.16% | on the portion over $220,000 |
Note: This explanation covers Ontario’s provincial tax rates only. Your actual take‑home pay also includes federal tax and mandatory contributions like CPP and EI. Calculate your Ontario tax and net pay estimate.