Canadian payroll & pay stub glossary

Every term you might see on a Canadian pay stub or payroll document, explained in one plain sentence. Quebec equivalents are noted where they differ.

Gross Pay

Your total earnings before any deductions are taken off — the full amount your employer owes you for the pay period.

Net Pay

The amount that actually lands in your bank account after all deductions are subtracted from your gross pay; also called take-home pay.

CPP (Canada Pension Plan)

A mandatory federal program most employees and employers contribute to each pay period, funding retirement, disability and survivor benefits. Quebec uses QPP instead.

CPP2 (Second Additional CPP)

Additional CPP contributions required on earnings above the first annual ceiling up to a second ceiling, introduced as part of the CPP enhancement. Quebec has a QPP equivalent.

EI (Employment Insurance)

A mandatory federal program funded by employee and employer premiums, providing income support if you lose your job, become ill, or take certain leaves.

QPP (Quebec Pension Plan)

Quebec's equivalent of CPP — a provincial program administered by Revenu Québec that provides similar retirement, disability and survivor coverage.

QPIP (Quebec Parental Insurance Plan)

A Quebec-specific program funding parental, maternity, paternity and adoption benefits; separate from federal EI parental benefits.

Federal Income Tax

The portion of your earnings withheld each pay period and remitted to the CRA, based on your projected income and your TD1 claim amounts.

Provincial Income Tax

The portion withheld for your province or territory, calculated separately from federal tax. Quebec collects its own through Revenu Québec.

TD1 (Personal Tax Credits Return)

A CRA form you complete when starting a job that tells your employer how much personal tax credit to apply, which affects how much tax is withheld.

T4 (Statement of Remuneration Paid)

A year-end slip your employer issues showing your total employment income and the deductions withheld during the calendar year; used to file your tax return.

T4A (Statement of Pension, Retirement, Annuity, and Other Income)

A year-end slip for non-employment income such as self-employment fees, pensions or certain benefits; not the same as a T4.

ROE (Record of Employment)

A document your employer issues when your employment ends or insurable hours are interrupted, used by Service Canada to assess your EI entitlement.

RL-1 (Relevé 1)

The Quebec equivalent of the T4, issued by employers to Quebec employees and filed with Revenu Québec.

Taxable Benefit

Something of value your employer provides beyond cash wages — such as personal use of a company car or employer-paid life insurance — that the CRA treats as income.

RPP (Registered Pension Plan)

A workplace retirement plan registered with the CRA; contributions appear as deductions on your pay stub and reduce your taxable income.

RRSP (Registered Retirement Savings Plan)

A personal retirement account you can contribute to through payroll deduction; contributions reduce your taxable income up to your annual limit.

Union Dues

Fees collected each pay period by your employer and remitted to your union on your behalf; usually tax-deductible and shown as a deduction.

Garnishment

A legal order requiring your employer to deduct part of your wages and send it directly to a creditor or agency, for example for support payments.

Vacation Pay

A percentage of your vacationable earnings your employer must pay, either accrued each period or paid as a lump sum when you take vacation.

Vacationable Earnings

The types of pay your vacation pay percentage is calculated on, typically regular wages and often overtime and commissions; the exact list varies by province.

Statutory Holiday Pay

Pay an eligible employee receives for a public holiday not worked, or a premium when worked; amount and eligibility rules vary by province.

Overtime

Hours worked beyond the standard threshold set by your province; employers must pay a premium rate for those hours. Thresholds vary by province.

Year-to-Date (YTD)

A running total on your pay stub showing your cumulative earnings, deductions and contributions from January 1 to the end of the current pay period.

Pensionable Earnings

The portion of your income on which CPP (or QPP in Quebec) contributions are calculated; not all pay qualifies, and there is an annual ceiling.

Insurable Earnings

The portion of your income on which EI (or QPIP in Quebec) premiums are calculated; like pensionable earnings, there is an annual maximum.

Pay Period

The recurring span of time your wages are calculated for, such as every two weeks; distinct from your pay date, which is when the money arrives.

Pay Frequency

How often you are paid — weekly, bi-weekly, semi-monthly or monthly — which sets the number of pay periods in a year.

Source Deductions

The amounts an employer is required to withhold directly from your pay — income tax, CPP/QPP and EI/QPIP — and remit to the government.

Remittance

The act of an employer sending the source deductions withheld from pay to the CRA (or Revenu Québec) by the required deadline.

Net Claim Amount

The total of the personal tax credit amounts on your TD1 form; your employer uses it to calculate how much income tax to withhold.

Severance Pay

Compensation an employer may provide on dismissal, sometimes beyond the statutory minimum; it is taxable income and entitlements vary.

Termination Pay

A statutory minimum lump sum an employer must pay when ending employment without working notice; set by provincial employment standards.

Pay in Lieu of Notice

Money paid instead of requiring you to work through a notice period; it equals the wages you would have earned during that period and is taxable.

Premium (Overtime or Stat)

The extra pay above your regular rate owed for overtime hours or for working a statutory holiday, usually expressed as a rate multiplier.

Gross-Up

A calculation where an employer increases a payment so that, after tax is withheld, you receive the full intended net amount.

Retroactive Pay (Retro Pay)

A lump sum correcting wages that should have been paid earlier, for example when a raise is back-dated to an earlier effective date.

Notice of Assessment (NOA)

A document the CRA sends after you file your return, confirming how your income was assessed and showing any refund, balance owing, or RRSP room.