Narrator: Do you understand everything on your paycheque? Whether you’re a student working your first job, or you’ve been working for years, every payday, you get a statement of earnings, or a pay stub. Depending on your employer, it’ll either come online, or you’ll get a paper one on pay day. Either way, It should look something like this.

So, what’s in a typical pay stub? Why is money being taken off every time? Where does that money go?

We’re here to help!

The biggest number you’ll see is your Gross Income or Gross Pay, which is the total amount you earned during the pay period, before any deductions.

Wait, so if this is how much I earned, why is the amount in my bank account less than that?

Everyone who works in Canada will have amounts deducted from their paycheque. These deductions help pay for services across the country, and help those who are unemployed, retired, or persons with disabilities.

So once you take your Gross Pay, and subtract all the deductions, the amount you see in your bank account is your Net Pay.

Now, let’s walk through the deductions.

The first deduction you’ll most likely see is Income Tax. Just like paying for items at the store, your pay is also taxed.

Your taxes help pay for many things in Canada including, roads, health care, public safety, and so much more. It’s how we all contribute!

Next up – EI – Employment Insurance. A percentage of your gross pay goes to help workers who lose their jobs, and need Employment Insurance to help pay their bills and provide for their family until they find another job. EI may help you if you lose your job too. EI also helps people who are no longer working because they’ve given birth, or adopted a child.

The last deduction you’ll see is CPP/QPP which stands for the Canada Pension Plan or Quebec Pension Plan. This protects your future. A percentage of your pay also helps provide income for Canadians who retire, people who are unable to work because of a disability, or for spouses and families when someone dies. You will also get this when you are older.

For some jobs, you may see other deductions from your gross pay, like union dues, health insurance plans, or private pension plans.

Last thing - You’ll also see a section called YTD, which stands for Year to Date, which is the total amount of all your pay stubs from January 1st until now.

I hope this helps you understand your pay, and how your money helps you and the community!

Don’t forget to check us out on social media, and go to canada.ca for more info.