The 12 payroll red flags on a Canadian pay stub

Which year's figures apply to the document in your hand

This matters more than any single number below, and it is the easiest thing to get wrong.

A pay stub issued in August 2026 is a 2026 stub. The 2026 CPP, CPP2 and EI figures apply to it.

A T4 or RL-1 you are physically holding right now is the slip for the 2025 tax year. Employers had to issue 2025 slips by the end of February 2026. The 2026 T4 and RL-1 do not exist until early 2027.

So a mid-year stub check runs on 2026 figures, and a check against the slip in your filing drawer runs on 2025 figures. Both sets are below, labelled by year.

Comparing a 2025 slip against a 2026 ceiling produces a difference that is not an error. It is a year mismatch, and it is the false alarm this page is most careful to prevent.

The figures you need before you start, 2026 and 2025

Figures verified against the sources at the foot of this page on 27 August 2026. CRA and Revenu Québec reset these each January, so a figure read here after the next reset should be re-checked at source.

CPP outside Quebec (CRA). 2026: maximum pensionable earnings $74,600, basic exemption $3,500, employee rate 5.95%, maximum employee contribution $4,230.45. 2025: maximum pensionable earnings $71,300, basic exemption $3,500, employee rate 5.95%, maximum employee contribution $4,034.10.

CPP2, the second additional contribution (CRA). 2026: 4% on pensionable earnings between $74,600 and $85,000, maximum $416.00. 2025: 4% between $71,300 and $81,200, maximum $396.00.

EI (CRA). 2026: maximum insurable earnings $68,900; employee rate 1.63% outside Quebec to a maximum of $1,123.07, and 1.30% in Quebec to a maximum of $895.70. 2025: maximum insurable earnings $65,700; 1.64% outside Quebec to a maximum of $1,077.48, and 1.31% in Quebec to a maximum of $860.67.

Federal basic personal amount (CRA indexation page). 2026: up to $16,452, falling to $14,829 for individuals whose net income reaches the bottom of the 33% bracket. 2025: up to $16,129, falling to $14,538.

Quebec basic amount used for source deductions (Revenu Québec). 2026: $18,952. 2025: $18,571.

Quebec figures for QPP, QPP2 and QPIP are set out in the Quebec note at the foot of this page, for both years.

1. CPP or EI still coming off after the annual maximum

On the stub: a CPP or EI deduction late in the year, while the year-to-date box already shows $4,230.45 for CPP or $1,123.07 for EI on 2026 figures.

Why it happens: a second employer starts your CPP and EI counters at zero, and a new payroll account can do the same. A move between provinces with the same employer does not. A CPP-to-QPP or QPP-to-CPP switch inside one year is reconciled on Form RC381, Inter-Provincial Calculation for CPP and QPP Contributions and Overpayments, when you file, and does not by itself produce an overpayment.

What it points to: two employers or two payroll accounts in the same year, each withholding correctly on its own count. CRA describes the recovery route. Excess CPP or QPP goes on line 44800 of the federal return and excess EI on line 45000.

The Quebec carve-out: CRA's line 44800 page states that the line does not apply to you if you were resident in Quebec on 31 December. A Quebec resident claims excess QPP on the Revenu Québec income tax return instead. For EI, CRA's line 45000 page states that a Quebec resident completes Schedule 10, Employment Insurance and Provincial Parental Insurance Plan Premiums, and that the excess on line 45000 is reduced by the QPIP premiums payable. CRA also notes that where the difference is $1 or less, no refund may follow.

What it can mean instead: one employer whose year-to-date figures did not carry across a payroll system change. That the employer can correct on a later pay in the same year.

The arithmetic: CPP per period is (pensionable earnings minus the period exemption) x 5.95%. The biweekly exemption is $3,500 / 26 = $134.61. On $2,500 biweekly: (2,500 - 134.61) x 0.0595 = $140.74. EI outside Quebec is 2,500 x 0.0163 = $40.75. Add every CPP box for the year and compare with $4,230.45.

A question you can put to payroll: "My CPP year-to-date is $X, above the 2026 maximum of $4,230.45. Was a prior payroll account's year-to-date carried into this one?"

2. A CPP2 line appears and looks like a mistake

On the stub: a second line called CPP2, CPP second additional or QPP2, starting partway through the year on top of ordinary CPP.

Why it happens: since 1 January 2024 CRA has required a second additional contribution on pensionable earnings above the first earnings ceiling. The line starts in the period your pensionable earnings pass that ceiling, which is why it appears mid-year rather than in January.

What it points to: a system doing what the rule requires. For 2026, CPP2 is 4% of pensionable earnings between $74,600 and $85,000, so no more than $416.00 can come off. For 2025 it was 4% between $71,300 and $81,200, so no more than $396.00 (CRA).

What it can mean instead: the wrong ceilings loaded. CPP2 sits above the first ceiling, so base CPP reaching $4,230.45 comes first. Both lines running while base CPP is far below that figure points at the ceiling configuration rather than at your earnings.

The arithmetic: take year-to-date pensionable earnings in the period CPP2 first appeared, subtract $74,600, multiply by 4%. That is the CPP2 owed to date, capped at $416.00 for the year.

A question you can put to payroll: "CPP2 began on my [date] pay. Can you confirm my year-to-date pensionable earnings at that point, and that base CPP had reached $4,230.45 first?"

3. A taxable benefit inflates gross pay without adding cash

On the stub: gross pay jumps, a line appears named group life, taxable benefit, parking or standby charge, and your deposit does not rise.

Why it happens: employer-paid group life and personal use of a company vehicle are taxable benefits. They run through payroll so income tax and CPP are calculated on them, then come back out so you are not paid the same value twice.

Parking is narrower than it looks. CRA states that parking you are provided or reimbursed is generally a taxable benefit, then sets out exceptions: scramble parking, where there are not more than two spaces for every three employees who want one, spaces are unassigned and the offer is open to all; parking where the employee regularly uses a vehicle for work duties at least three days in a five-day work week; a shopping centre or industrial park lot open to the public without charge; and parking for an employee with a severe and prolonged mobility impairment or who is blind.

Gift cards are narrower still. Under CRA's policy in force since 1 January 2022, a gift card is treated as non-cash only where all three conditions are met: it comes preloaded and can be used only at a single retailer or a group of retailers identified on the card; its terms and conditions state that the amount loaded cannot be converted to cash; and the employer keeps a log recording the employee, the date, the reason, the type of card, the amount and the retailers. A non-cash gift card can then sit inside CRA's $500 annual limit for non-cash gifts and awards, including taxes, and be non-taxable. A cash-convertible card is near-cash and taxable in full. A correctly coded, logged, single-retailer card inside the $500 limit is not a payroll error.

What it points to: where the benefit is taxable, the value appears in Box 14 of your T4 and, unless another code covers it, again under code 40 in the Other information area (CRA T4 slip guidance).

What it can mean instead: wrong coding. CRA's benefits and allowances chart sets pensionability and insurability line by line. A non-cash taxable benefit is generally pensionable for CPP but not insurable for EI, while cash and near-cash benefits are insurable.

The arithmetic: net pay should fall only by the income tax and the pension contribution the benefit triggers. Multiply the benefit by your marginal tax rate, then add 5.95% if your pensionable earnings for the year are below $74,600, 4% if they are between $74,600 and $85,000, or 6.30% under QPP in Quebec. Compare that with the drop in your deposit.

A question you can put to payroll: "The [date] stub shows $X coded [benefit name] in gross. Is that a non-cash taxable benefit, and were EI premiums charged on it?"

4. Vacation pay that accrues and never gets paid, or is paid at the wrong percentage

On the stub: a vacation bank that grows every period and never falls, or a percentage that has not moved past a service anniversary.

Why it happens: two lawful models exist. Pay the percentage on each cheque, or hold it and pay it when leave is taken. A rate step is tied to a service anniversary, so a rate change loaded late shows up as a percentage that stays flat after the anniversary date has passed.

What it points to: under the accrual model, the bank should equal your rate multiplied by vacationable earnings since the last payout. A bank that has never fallen since you started means nothing has been paid out of it.

What it can mean instead: the earnings base is narrower than the statute allows. Which earnings are vacationable is set by each jurisdiction, and the treatment of overtime, commission and bonuses differs between them, so the base is worth naming explicitly rather than assumed.

The arithmetic: vacationable earnings for the vacation year x your rate. Ontario sets a minimum of 4% of gross wages under five years of employment and 6% at five years and over (Ontario ESA). Quebec sets 4% from one year of uninterrupted service, rising to 6% at three years (CNESST). $52,000 x 6% = $3,120.

A question you can put to payroll: "What vacation rate am I on, which earnings are in the base, and on what date does my rate step up?"

5. Statutory holiday pay missing or calculated as a flat day

On the stub: nothing for a week containing a public holiday, or a flat eight hours at base rate when your hours vary.

Why it happens: public holiday pay is a statutory formula set by each jurisdiction, not an ordinary day's pay. Ontario's formula runs on four weeks of wage history, so a payment of exactly one flat day at base rate is not the output of that formula unless your hours happen to be level.

What it points to: for a variable-hours worker, the flat day and the statutory formula give different numbers whenever the four-week average differs from the flat day. The direction of the difference depends on which way your hours moved.

What it can mean instead: no entitlement in your circumstances, an agreed substitute day, or the holiday falling inside an unpaid leave. Eligibility rules differ by jurisdiction.

The arithmetic, Ontario version: the ESA guide states the formula as "all of the regular wages earned by the employee in the four work weeks before the work week with the public holiday plus all of the vacation pay payable to the employee with respect to the four work weeks before the work week with the public holiday, divided by 20." With $3,400 of regular wages and $136 of vacation pay: (3,400 + 136) / 20 = $176.80.

A question you can put to payroll: "Which public holiday pay calculation was used for [holiday], and what four-week wage total went into it?"

6. Overtime paid at the wrong threshold for your province

On the stub: overtime starting at a threshold that does not match where you work, or no overtime line in a week where your hours passed it.

Why it happens: the threshold comes from the employment standards jurisdiction attached to your position in the payroll system. Where that field points at a different jurisdiction, the wrong threshold runs, and nothing on the stub says so.

What it points to: thresholds genuinely differ. Ontario: 1.5x after 44 hours in a work week, weekly and not daily (Ontario ESA). Alberta: the greater of hours over 8 in a day and hours over 44 in a week, the 8/44 rule, at 1.5x (Alberta). British Columbia: 1.5x for time over 8 hours in a day up to 12, 2x beyond 12 hours in a day, and 1.5x over 40 hours in a week, with the rule that "only the first 8 hours worked in a day count towards weekly overtime" (British Columbia).

What it can mean instead: your role is exempt, an averaging agreement is on file, or your employer is federally regulated. Banks, telecoms, airlines and interprovincial trucking fall under the Canada Labour Code, where standard hours are 8 in a day and 40 in a week, and overtime is paid at not less than 1.5 times the regular hourly wage for hours worked beyond those standard hours, or taken as 1.5 hours of paid time off per overtime hour under a written agreement.

The arithmetic: 46 hours in one week at $25 an hour. Ontario: 44 x $25 = $1,100, plus 2 overtime hours at $37.50 = $75, so $1,175. The same 46 hours in British Columbia, worked as four 11.5-hour days: each day gives 8 straight-time hours and 3.5 daily overtime hours, so 32 x $25 = $800 plus 14 x $37.50 = $525, or $1,325. Weekly overtime adds nothing to that, because only the first 8 hours of each day count towards the 40-hour weekly threshold, and four days at 8 hours is 32. The same hours, the same rate, two provinces, a $150 difference.

A question you can put to payroll: "Which employment standards jurisdiction is my position set to, what overtime threshold applies, and is an averaging agreement on file?"

7. An adjustment line nobody has explained

On the stub: a line coded ADJ, RETRO, CORR or MISC, positive or negative, with no description and no period reference.

Why it happens: an adjustment line is how a payroll system carries a correction to an earlier period into the current one. Retroactive raises, missed hours, reversed overpayments and banked time payouts are all posted this way, and the code alone does not distinguish them.

What it points to: a legitimate correction ties to a specific earlier pay period and a stated calculation. Both should be available on request.

What it can mean instead: a recovery of a claimed overpayment. What an employer may deduct from wages, and whether separate written authorisation is required, is set by employment standards law in each jurisdiction and can differ by the type of recovery. Your own jurisdiction's rule is the one that governs, and it is worth reading before agreeing to anything.

The arithmetic: divide the adjustment by your hourly rate. Negative $312.50 at $25 an hour is 12.5 hours. Look back for a period carrying 12.5 hours you did not expect. Where nothing matches, the line is not doing what its code suggests.

A question you can put to payroll: "The [date] stub has $X coded ADJ. Which period does it correct, and what is the calculation? If my jurisdiction requires written authorisation for a deduction of this kind, can you send me a copy of mine?"

8. Year-to-date totals that do not reconcile to the pay periods

On the stub: year-to-date gross that does not equal the sum of the gross on every stub you have been issued this year.

Why it happens: manual cheques, off-cycle payments, reversed pay runs and mid-year system migrations all sit outside the normal run, and each is a point at which a running total can diverge. A second payroll account inside one company does the same.

What it points to: the size and sign of the gap narrows it down. A gap equal to one period's gross points at one transaction, in or out.

What it can mean instead: a period missing from the year-to-date, which understates the income that will land on your T4, or one counted twice, which overstates it. Both matter, because the year-to-date figures become the slip.

The arithmetic: list every stub in a spreadsheet. Sum gross, income tax, CPP, EI and each other deduction, then compare each total with the matching year-to-date box. The gap names the missing event. At year end, compare with Box 14 of your T4, which includes taxable benefits and can legitimately exceed cash pay. Note the year: the T4 you are holding in August 2026 is the 2025 slip, so reconcile it against your 2025 stubs, not your 2026 ones.

A question you can put to payroll: "My year-to-date gross of $X does not match the $Y sum of my pay periods. Can you send the transaction list for the year?"

9. The wrong province of employment driving the wrong provincial tax

On the stub: provincial tax for a province you do not work in, a QPP line when you have never worked in Quebec, or CPP and 1.63% EI when your reporting establishment is in Quebec.

Why it happens: CRA sets province of employment by where the employee physically reports for work or is considered attached to an employer establishment, not by where the employee lives. People move, offices close, roles go remote, and the payroll record is not updated.

What it points to: a stale record means the wrong provincial tax table has run for the year to date. CRA notes that where province of employment differs from province of residence, too much or too little tax may be deducted.

What it can mean instead: correct and counterintuitive. Live in Gatineau, report to an establishment in Ottawa, and Ontario tax and CPP apply on the stub, while you file a Quebec return and settle the difference there.

The arithmetic: divide the EI deduction by the insurable earnings for the period. About 1.63% points outside Quebec for 2026. About 1.30% alongside a separate QPIP line points to Quebec. Then check whether the pension line reads CPP or QPP.

A question you can put to payroll: "What province of employment and which establishment is my payroll record set to, and does that match my reporting location since [date]?"

10. No TD1 on file, so tax comes off at the basic amount only

On the stub: income tax that feels high, and payroll confirms you are on claim code 1.

Why it happens: claim codes translate the total claim amount from your federal and provincial TD1 forms into a withholding column. CRA's 2026 payroll deductions tables title the federal claim code chart "2026 Federal claim codes (using maximum BPA)", so claim code 1 is the column that carries the basic personal amount and nothing beyond it.

CRA's stated rule for continuing employees is narrower than it is often described: "If your employee did not complete the federal and provincial TD1 forms for 2026, you continue to deduct income tax using the same claim code that you used last year" (CRA, T4032 Ontario, January 2026). So a claim code can be inherited from a prior year rather than reflecting anything current.

What it points to: a record that does not know about credits you may be entitled to. Tuition, the disability amount, an eligible dependant and the caregiver amount all raise the total claim amount where they apply.

What it can mean instead: it is right. A claim of the basic amount alone is a normal outcome, and a claim set above entitlement produces a balance owing when the return is filed rather than a saving.

The arithmetic and the paperwork: for 2026 the federal basic personal amount is up to $16,452 (CRA), and Quebec's basic amount for source deductions is $18,952 (Revenu Québec). Where entitlement runs beyond the basic amount and the claim code is 1, CRA's mechanism for changing it is a new federal TD1 plus the provincial TD1. In Quebec, that is the federal TD1 together with Revenu Québec's TP-1015.3-V, which stands in for the provincial TD1 and does not replace the federal one. Filing changes the timing of the tax, not the amount owed for the year.

A question you can put to payroll: "What federal and provincial claim codes am I set to, and when was my last TD1 processed?"

11. Union dues or pension deducted at the wrong rate or on the wrong earnings

On the stub: a dues or pension amount that does not match the collective agreement or plan text, or one that moves in a period when it should be flat.

Why it happens: a dues or pension deduction has two inputs, a rate and an earnings base, and either can be set wrong independently of the other. A collective agreement defines both for dues. A plan text defines both for pension contributions. Where the agreement names base wages and the system is pointed at total earnings, the rate reads correctly and the amount does not.

What it points to: the ratio, not the amount. A deduction that divides cleanly into one earnings figure and not another has named the base in use.

What it can mean instead: a rate change never loaded, or a move between rate tiers or plan classes that the payroll record did not follow.

The arithmetic: divide the deduction by each candidate earnings figure. On $2,000 of base pay plus $300 of overtime with $34.50 of dues: 34.50 / 2,000 = 1.725% and 34.50 / 2,300 = 1.50%. One of those is your agreement's rate, and whichever one it is names the base being used. At year end, dues your union has agreed not to receipt appear in Box 44 of your T4, and registered pension plan contributions in Box 20 (CRA T4 slip guidance).

A question you can put to payroll: "What rate and what earnings base are my dues and pension contributions calculated on, and which version of the agreement is loaded?"

12. A final pay statement with no vacation payout or holiday pay

On the stub: a last cheque that looks ordinary. Hours to the final day, standard deductions, nothing else.

Why it happens: a termination runs through the normal pay cycle, which produces hours and deductions. The accrued balances are separate calculations that have to be added to that run rather than falling out of it: accrued vacation, banked overtime or time off in lieu, statutory holidays inside a notice period, and any termination or severance amount.

What it points to: an ordinary-looking final cheque and a non-zero vacation bank cannot both be right at the same time. The two figures test each other.

What it can mean instead: nothing is owed because vacation pay was paid on every cheque. Where a vacation pay line appears in every period, a zero bank at the end is the expected result.

The arithmetic: vacationable earnings since your last payout x your rate. $28,000 since 1 May at 6% is $1,680. Add banked hours x your current rate, and compare the total with the final stub. Then check the insurable hours and insurable earnings on your Record of Employment, because an ROE built from the same figures carries into any EI claim.

A question you can put to payroll: "Please send my final pay breakdown: the vacation payout with the earnings base and rate used, banked time, statutory holidays in the notice period, and termination pay."

What to do when a check fails

This page is general information about Canadian payroll. It is not legal, tax, accounting or payroll advice for your situation, and PayStub IQ Canada is not affiliated with CRA, Revenu Québec, ESDC, CNESST or any provincial employment standards office.

A written message creates a dated record; a phone call does not. A message that quotes the pay period, the line name exactly as it appears on the stub, the figure shown, the figure you calculated and the arithmetic in one line gives payroll something to check rather than something to interpret.

Asking for a date by which the figure will either be corrected or explained gives both sides a defined next step. Payroll can see what you see once you point at the line, which is why this is the step that resolves a question fastest.

Where nothing comes back, the escalation route runs inside the organisation first, then to the body that governs the issue. Withholding questions go to CRA, or to Revenu Québec for Quebec source deductions. Vacation pay, holiday pay, overtime, deductions from wages and final pay go to your provincial or territorial employment standards office, or to the federal Labour Program where your employer is federally regulated.

Keeping every stub matters, because the reconciliation in item 8 needs the full set. Complaint time limits apply and are set by each jurisdiction, so the applicable limit is the one published by your own standards body.

Frequently asked questions