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Canada doesn’t use the term adjusted gross income. The closest thing on your return is net income, which goes on line 23600, and it does much the same job. It’s your total income from line 15000, less the deductions that come before the personal credits, so an RRSP contribution or a childcare cost brings it down.
What is the Canadian version of adjusted gross income?
If you’ve read American tax advice, you’ve met adjusted gross income. It’s a middle number: everything you earned, minus a short list of deductions, used to decide what else you can claim. Canadian returns have the same shape with different labels.
You get line 23600 by taking line 15000 and subtracting the total of lines 20700 to 23500. Tax itself is worked out on line 26000, taxable income, which is line 23600 minus the amount on line 25700. That’s three numbers to keep straight, and people swap them all the time.
| Line | Name | How you get it | What it drives |
|---|---|---|---|
| 15000 | Total income | Everything you report as income | Starting point |
| 23600 | Net income | Line 15000 minus lines 20700 to 23500 | Credits, benefits, clawbacks |
| 26000 | Taxable income | Line 23600 minus line 25700 | Federal and provincial tax |
Why does line 23600 matter more than the tax?
Because it does two jobs. Your net income feeds the non-refundable credits, and the CRA also uses it, together with your spouse’s or common-law partner’s, to work out benefits. Here’s how the agency puts it on its page for the line.
The CRA also uses your net income (and your spouse’s or common-law partner’s net income) to calculate amounts such as the Canada child benefit, GST/HST credit, social benefits repayment and certain other credits.
Line 23600 Net income, canada.ca
You have to report a spouse’s net income on your return even when it’s zero.
That makes deductions worth more than the tax they save. A dollar off line 23600 can lift a benefit as well. If you’re near a phase-out, the tax saving may be the smaller half of the story. Picture Priya in Winnipeg, a few hundred bucks above a benefit threshold: one RRSP contribution could pull her back under it. You can test that kind of thing with the Canada child benefit calculator and the GST/HST credit calculator.
How much does one deduction change?
Take an Ontario employee earning $80,000 in 2026. Line 15000 is $80,000. Put $5,000 into an RRSP and claim it, and line 23600 falls to about $75,000, or a little less once the enhanced CPP deduction is taken off (about $711 in the calculator, plus $216 for the second CPP tier).
We ran both cases through the tax maths behind the income tax calculator. Federal plus Ontario tax dropped by about $1,480, before credits. That’s roughly 29.6 cents per dollar ($1,480 divided by $5,000), which matches what the marginal tax rate calculator shows around $75,000.
Not $1,480 in your pocket in every case, though. It comes back as a lower bill or a bigger refund, and the RRSP calculator shows the same effect over time.
What sits between total income and net income?
The deductions on lines 20700 to 23500. RRSP contributions, childcare expenses and moving expenses are the ones most people have used, plus the enhanced CPP deduction that an employee never sees on a slip. Employment income isn’t the only thing on line 15000, so interest, rental income and the taxable part of capital gains all sit there too.
The deductions after line 23600, on lines 24400 to 25600, only affect taxable income. They don’t change the net income the benefits look at. That’s the catch when someone says a deduction “lowers income”. Ask which line.
Is net income the same as what lands in your bank account?
No, and this one trips up a lot of people at tax time. Net income is a tax number, worked out before income tax, CPP and EI come off your pay. Your take-home pay is a different thing. A person can have a net income of $75,000 and see a good deal less hit the account each paycheque. Use net income to understand benefits and credits, and use your pay stub to understand your budget.
Common mistakes with net income
The big one is reading line 15000 as the number the CRA uses for benefits. It isn’t. Another is forgetting that a negative result goes on the return as zero, and that you should still note the negative amount because it may be a non-capital loss you can carry back with form T1A.
A third mistake is copying an American figure. If a website tells you your AGI limit for some credit, it’s talking about the US system and it doesn’t map onto Canadian thresholds. Use the dollar amounts the CRA publishes for the year, and for the credits themselves the tax credits calculator gives a federal estimate only.
We couldn’t find one CRA page that lists every deduction line, so if you claim something unusual, check the line’s own page.
Where we got these figures
The line definitions come from the Canada Revenue Agency‘s pages for lines 23600 and 26000. The 2026 tax and CPP amounts in the example come from the federal and Ontario data behind our calculators, which follow the CRA and Ontario published tables. Your own return and your notice of assessment always win over an estimate. This site isn’t part of the CRA or any government.
Frequently asked questions
Is there an adjusted gross income in Canada?
Not by that name. Net income on line 23600 is the nearest match: total income from line 15000 minus the deductions on lines 20700 to 23500.
Which line do child benefits use?
The CRA uses your net income and your spouse's or common-law partner's net income to work out the Canada child benefit and the GST/HST credit.
What is the difference between net income and taxable income?
Taxable income on line 26000 is line 23600 minus line 25700. Net income decides credits and benefits, and taxable income decides the tax.
What if my net income is negative?
Enter zero on line 23600 but keep track of the negative amount. It may be a non-capital loss that you can carry back using form T1A.
Does an RRSP contribution lower net income?
Yes, it is a deduction that reduces line 23600. That can lift benefits as well as cut the tax bill.
- How to file your tax return in Canada: steps and dates
What to gather, when your return is due and how to file in Canada, from the first slip to the notice of assessment that closes the year