How to read your first pay stub

Your first pay stub can be a shock. You worked 32 hours at $17.60, so you were expecting about $563. What actually landed in your account is less. Here’s where the difference goes, line by line.

Gross pay vs. net pay

Gross pay is what you earned before anything comes off: your hours times your hourly rate, plus any overtime, vacation pay or tips run through payroll.

Net pay is what actually lands in your bank account. The gap between the two is your deductions.

The three deductions everyone has

CPP (Canada Pension Plan)

CPP is a retirement pension you pay into while you work. In 2026 the rate is 5.95% of your pay, but the first $3,500 you earn in a year is exempt. Your employer matches every dollar you put in.

CPP only starts the month after you turn 18. If you’re 16 or 17, that line should be $0. If it isn’t, ask your employer.

EI (Employment Insurance)

EI pays you for a while if you lose your job through no fault of your own. In 2026 it’s 1.63% of your pay, and there’s no minimum age. Your employer pays a bit more than you do on top.

Income tax

This is federal and provincial tax combined. Payroll works it out as if every cheque continued all year. So if you only work a summer job, or you start in September, too much tax usually comes off. You get the difference back when you file a tax return. See your first tax return.

The TD1 form

On your first day you’ll fill in a TD1 form, and in most provinces a provincial TD1 too. It tells your employer which tax credits to apply. Most people with one job just claim the basic personal amount, the amount you can earn before paying income tax.

If you have two jobs, only claim the basic amount at one of them. If you claim it at both, too little tax comes off and you’ll owe money in the spring.

Other lines you might see

• Vacation pay. In most provinces you’re owed at least 4% of your pay as vacation pay. Some employers add it to every cheque, others pay it when you take time off.
• Stat holiday pay. Extra pay for public holidays, with rules that depend on your province.
• YTD (year to date). Your running total for the year. It should match your T4 slip in February.
• Union dues, benefits or RRSP. Only if your job has them.

Check every stub

Mistakes happen, and they’re easier to fix early. Each payday, take 30 seconds to check:

1. Your hours match what you actually worked.
2. Your hourly rate is right.
3. CPP is $0 if you’re under 18.
4. The pay period dates are correct.

Keep your stubs, or screenshots of them, until you’ve filed your tax return for that year.