Once a new year begins, employees start contributing again toward the annual CPP and EI limits, which increases deductions on early paychecks and reduces take-home pay. As the year progresses and these contribution limits are reached, deductions decrease and net pay typically increases. Learn more about taxes by exploring the Alberta guide.

CPP and EI reset in January

CPP and EI reset every January because both have yearly contribution limits. Once you hit the maximum for the year, the deductions stop — and they start again the following January.

Why January feels worse than other months

January often feels worse because CPP and EI start over at the beginning of the year. When these deductions reset, more money comes off each paycheque, which makes your take‑home pay feel lower compared to the end of the previous year. Learn more on why CPP and EI deductions change throughout the year.

Why your salary hasn’t actually decreased

Your salary hasn’t actually decreased — it just feels lower because January often includes fewer working hours due to the holidays. With fewer hours worked, your net income naturally drops even though your pay rate hasn’t changed.

Estimate your Alberta take home pay by using the calculator provided.