How to Create a Pay Stub in Canada: Complete 2026 Guide

What is a Pay Stub?

A pay stub (also called a paycheque stub, earnings statement, or wage statement) is a document that accompanies an employee's paycheque. It provides a detailed breakdown of the employee's earnings, deductions, and net pay for a specific pay period.

In Canada, while not all provinces legally require employers to provide pay stubs, it's considered best practice and is required in many provinces including Ontario, British Columbia, Alberta, and Quebec.

What Information Must Be Included on a Canadian Pay Stub?

A compliant Canadian pay stub should include:

Employee Information

• Full legal name
• Address (optional but recommended)
• Social Insurance Number (last 3 digits only for privacy)
• Employee ID number

Employer Information

• Company name
• Business address
• Contact information

Pay Period Details

• Pay period start date
• Pay period end date
• Pay date
• Pay frequency (weekly, bi-weekly, semi-monthly, monthly)

Earnings Breakdown

• Regular hours worked and hourly rate
• Overtime hours and overtime rate
• Vacation pay
• Bonuses and commissions
• Other earnings (tips, allowances, etc.)
• Gross pay (total before deductions)

Statutory Deductions

• CPP (Canada Pension Plan) - 5.95% in 2026 (or QPP in Quebec at 6.4%)
• EI (Employment Insurance) - 1.64% in 2026 (1.32% in Quebec)
• Federal income tax - Based on federal tax brackets
• Provincial income tax - Varies by province
• QPIP (Quebec only) - Quebec Parental Insurance Plan

Voluntary Deductions

• RRSP contributions
• Union dues
• Health benefits premiums
• Life insurance premiums
• Charitable donations

Net Pay

The final amount the employee receives after all deductions.

Year-to-Date (YTD) Totals

Running totals for the calendar year for all earnings and deductions.

Step-by-Step: Creating a Pay Stub in Canada

Step 1: Gather Employee Information

Collect all necessary employee details including their TD1 form to determine the correct tax claim code.

Step 2: Calculate Gross Earnings

Add up all earnings for the pay period:

• Regular pay = Hours worked × Hourly rate
• Overtime pay = OT hours × OT rate (usually 1.5x regular rate)
• Add vacation pay, bonuses, and other earnings

Step 3: Calculate CPP/QPP Contributions

For 2026:

• CPP rate: 5.95% of pensionable earnings
• Basic exemption: $3,500 annually
• Maximum pensionable earnings: $71,300
• Maximum employee contribution: $4,034.10

Quebec employees pay QPP instead:

• QPP rate: 6.4%
• Maximum employee contribution: $4,339.20

Step 4: Calculate EI Premiums

For 2026:

• EI rate: 1.64% (1.32% in Quebec)
• Maximum insurable earnings: $65,700
• Maximum employee premium: $1,077.48 ($867.24 in Quebec)

Step 5: Calculate Income Tax

Use the CRA's payroll deductions tables or formulas to calculate:

• Federal income tax
• Provincial/territorial income tax

Step 6: Apply Voluntary Deductions

Subtract any voluntary deductions the employee has authorized.

Step 7: Calculate Net Pay

Net Pay = Gross Pay - Total Deductions

Using PaystubPRO to Create Pay Stubs

The easiest way to create accurate Canadian pay stubs is to use PaystubPRO:

1. Enter company information - Name, address, province
2. Add employee details - Name, address, employee ID
3. Set pay period - Start date, end date, pay date, frequency
4. Enter earnings - Hours, rate, overtime, bonuses
5. Review calculations - Our system automatically calculates all deductions
6. Download PDF - Get your professional pay stub instantly

PaystubPRO automatically handles:

• All CPP/QPP calculations with annual maximums
• EI premiums with Quebec adjustments
• Federal and provincial tax brackets for all provinces
• Year-to-date tracking

Common Mistakes to Avoid

1. Incorrect tax calculations - Always use current year rates
2. Missing YTD totals - Required for employee tax planning
3. Wrong pay period dates - Must match actual work period
4. Forgetting provincial differences - Quebec has unique deductions
5. Not updating for rate changes - CPP, EI rates change annually

Conclusion

Creating accurate pay stubs is essential for Canadian employers. Whether you're a small business owner or managing payroll for a larger company, understanding the components of a pay stub helps ensure compliance and builds trust with your employees.

Try PaystubPRO today and create your first Canadian pay stub in under 2 minutes!