1. Calculating Net pay
we will need a copy of
the Payroll Deduction
Tables

2. Demonstrate an
understanding of
calculations for gross
pay and net pay earned
through income sources
including
· Wages
· Salary

3. There are 2 steps to
calculate net pay
1. Find taxable income
2. Find net pay

4. Finding taxable income
taxable income is what your taxes are
based on, it is your income minus all
allowable deductions.
allowable deductions
dental plan
union dues
child care
RSPs
tuition

5. taxable income =
gross pay - allowable deductions
example
Steve's gross pay is $450 per week. He
pays $4 to his union, $12 dollars for a
dental plan. What is his taxable income?
Solution
450 - 4 - 12 = $434

6. Finding net pay
Net pay, or take-home pay, is the
money you actually get to spend. It's
your gross pay minus all deductions
and taxes
Deductions
allowable deductions
CPP
EI
Federal Tax
Provincial Tax

7. Net Pay = gross pay - allowable
deductions - CPP - EI - Federal tax -
Provincial tax

8. How to find CPP, EI, Federal Tax and
Provincial tax.
Use taxable income and
look in the Payroll
Deduction Tables
You need a claim code
for the 2 taxes.

9. Example
Steve makes 450 per week and has $16
dollars of allowable deductions. His claim
code is 1. How much does he pay for:
remember taxable income = 450 - 16 = 434
CPP: $18.15
EI: $7.51
Federal Tax: $28.95
Provincial Tax: $27.30

10. 450 - 16 - 18.15 - 7.51 - 28.95 - 27.30
= $352.09
His net pay is $352.09

11. Example 2
Betty makes $2000 per month. She
pays $150 to her union and
contributes $100 to RSPs. What is her
net pay if she falls in claim code 2?

12. Solution
taxable income = 2000 - 100 - 150 = 1750
CPP = 72.19
E.I. = 30.28
Fed IT = 94.80
Prov IT = 96.80
Net pay = 2000 - 250 - 72.19 - 30.28 -
94.80 - 96.80 = $1455.93