Updated Checked by the Tax-Services.ca editorial team How we check
Test any Canadian tax calculator with a known case. Enter $85,000 of employment income in Ontario for 2026, and combined federal and Ontario tax should land near $15,551, or 18.3% of income. A result far from that points to a wrong province, year or deduction. The test works on tools from firms such as EY, software companies or this site.
This site is not EY and has no connection to it. This page shows how to test any Canadian tax calculator, including one from a firm such as EY. The CRA's own Payroll Deductions Online Calculator works out payroll deductions, not a full personal tax estimate. For an estimate of your own pay after tax, try our take-home pay calculator.
What does a good income tax calculator ask you?
Five things, at least. Skip one and you only get half an answer.
| Input | Why it changes the answer |
|---|---|
| Province on December 31 | Each province has its own brackets and credits |
| Employment income | Sets taxable income, CPP and EI |
| Other taxable income | Rent, interest and side work are taxed at your top rate |
| Deductions such as RRSP | Lower taxable income before tax is worked out |
| Tax already withheld | Decides whether you get a refund or owe a balance |
The province matters most. A tool that never asks for it can’t be right for you, since the provincial share in our test case is $5,324.46 of the total.
How do you run the test?
Put $85,000 of employment income for Ontario into the income tax calculator. You should see taxable income of $83,873, federal tax of $10,226.60, Ontario tax of $5,324.46 and total income tax of $15,551.05. That’s 18.3% of income, with CPP and EI on top and separate.
Now say your employer withheld $14,000 over the year. The tax refund calculator then shows a balance owing of $1,551.05, due on 30 April. A refund is tax paid minus tax owed. If your employer withholds less than the real figure, you won’t notice during the year, and the difference turns up as a bill when you file.
Three checks take a minute. First, do the two halves add up? $10,226.60 plus $5,324.46 is $15,551.06 before rounding, so a penny either way is normal. Second, is taxable income lower than pay? It should be, because the enhanced CPP and CPP2 contributions are deductions, which is $1,127 here. Third, does the tool say which year’s rates it uses? A calculator stuck on an old year will be off by a few hundred dollars and look perfectly confident.
Here is where the $15,551 comes from, using the CRA's 2026 rates (14% federal up to $58,523 and 20.5% above it, Ontario 5.05% up to $53,891 and 9.15% above it). Credits are the basic personal amount, CPP and EI contributions and the Canada employment amount.
| Step | Federal | Ontario |
|---|---|---|
| Tax on $83,873 before credits | $13,389.97 | $5,464.85 |
| Non-refundable credits | $3,163.37 | $890.39 |
| Ontario Health Premium | none | $750.00 |
| Tax payable | $10,226.60 | $5,324.46 |
These steps are our arithmetic on the CRA rates, and the calculator's results match them to the cent. Use them as a template for checking any tool: if it cannot show how it reached its total, treat the total with caution.
What does an RRSP contribution do to the estimate?
Add a $10,000 contribution to the same case and tax drops from $15,551 to $12,586. You save $2,965, or 29.65% of the amount you put in, because the $10,000 comes off income taxed at 20.5% federally and 9.15% in Ontario, so the contribution really costs $7,035.
In Quebec, on the same income, the saving is $3,612 on $10,000. That gap comes from each province’s rates, and it’s one more reason to look at the province field first.
How much can you put in? Each year adds room equal to 18% of the prior year’s earned income, so $15,300 here, up to the annual dollar limit of $33,810 for 2026, less any pension adjustment, and unused room carries forward. The CRA lists $35,390 as the 2027 dollar limit, which applies to room built on 2026 earnings. The CRA spells out the formula on its page about how contributions affect your RRSP deduction limit. The RRSP calculator lets you test other amounts. Withdrawals are taxed as income later, so unless your rate drops in retirement, the deduction is mostly a deferral.
Average tax rate or marginal tax rate?
People mix these up all the time. The average rate spreads your whole bill over all your income. The marginal rate is what the next dollar costs you. On $85,000 in Ontario the average is 18.3%, but the next dollar of work income is taxed at 29.6%. When you’re weighing a raise, an RRSP deposit or side income, the marginal tax rate calculator is the one to open.
Why do two tax calculators disagree?
- Some show tax only, others subtract CPP and EI as well, so don’t compare figures from before and after contributions.
- Credits you don’t list aren’t counted. Medical costs, tuition and donations can lower the result.
- Estimates leave out benefits and refundable credits.
- Your employer uses payroll tables, which differ from your final return, so the balance at filing can differ from the estimate.
- A few dollars of difference is rounding and how small credits are treated. Hundreds of dollars points to a wrong input.
We couldn’t confirm the features of any named firm’s tool. To judge one, run the test case above and compare the total, the taxable income and the RRSP saving.
Can a calculator replace your tax return?
No. It’s a ballpark, good for planning a contribution or checking a pay stub, and the real number comes from the return you file with the CRA. Treat any calculator as a second opinion. If its answer and your filing software’s answer differ by a lot, find out why before you hit submit.
How do you read a tax refund or balance owing result?
A calculator can show a balance owing only when it knows how much was withheld during the year. In the test case, total tax is $15,551.05. If the employer withheld $14,000, the difference is a balance owing of $1,551.05.
The sources behind this page
Rates, brackets and contribution limits for 2026 come from the Canada Revenue Agency‘s published rate tables and its RRSP limit page. We ran the examples through this site’s calculators in September 2026 and rebuilt the $85,000 case by hand from the CRA's 2026 rate tables (page dated June 25, 2026) on November 12, 2026. The RRSP limits come from the CRA page on MP, RRSP, TFSA limits and YMPE (page dated October 28, 2026).
Frequently asked questions
How much tax is payable on $85,000 in Ontario?
About $15,551 in federal and Ontario income tax for 2026, which is 18.3% of income. That is $10,226.60 federal and $5,324.46 Ontario, including the Ontario Health Premium, on taxable income of $83,873. CPP and EI are extra and come off separately, so your take-home pay is lower.
Why do two tax calculators give different answers?
They may use different provinces, tax years, deductions or credits, or one may subtract CPP and EI and the other may not. Small gaps of a few dollars come from rounding. A gap of hundreds of dollars usually points to a wrong input, so check the province and the year first.
How much does a $10,000 RRSP contribution save?
In Ontario at $85,000 of income it saves about $2,965, because the contribution comes off income taxed at 20.5% federally and 9.15% provincially. In Quebec on the same income the saving is about $3,612. The saving depends on your province and your income, so test your own figures.
What is my RRSP deduction limit?
It grows by 18% of the prior year's earned income, up to the annual dollar limit, less any pension adjustment, plus unused room carried forward. The CRA lists $33,810 for 2026 and $35,390 for 2027. Your own room is on your CRA notice of assessment and in My Account.
Can a calculator replace my tax return?
No. A calculator gives a ballpark, good for planning an RRSP contribution or checking a pay stub. The real figure comes from the return you file with the CRA, which includes credits and slips a calculator may not ask about. If the two differ by a lot, find out why before you file.
When is a balance owing due?
For most people the balance is due on April 30, even if you file later. Interest starts after that date on any unpaid amount. Self-employed people usually have until June 15 to file but still owe the balance by April 30. Check the CRA page on filing dates for the current year.
All rrsp and retirement calculators
- RRSP, TFSA, FHSA and retirement income in Canada
How the RRSP, TFSA and FHSA differ, the 2026 limits, what happens when you withdraw, and where CPP and OAS fit into your retirement income