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Gross income is what you earn before anything comes off. For an employee that means the pay on the contract, before tax and payroll deductions. On $60,000 of gross income in Ontario you keep about $47,340, according to our take-home pay calculator.
The word gets used in a few ways, and mixing them up is how people end up with the wrong number in a mortgage form or a budget. Here they are in order.
Gross, net and taxable income are not the same thing
On your return the CRA uses separate lines. Total income is line 15000. Net income, line 23600, is total income minus the deductions on lines 20700 to 23500 (RRSP contributions and child care costs, for example). Taxable income, line 26000, is net income minus the amounts on line 25700.
| Term | Return line | What it is |
|---|---|---|
| Total income | 15000 | All your income before deductions |
| Net income | 23600 | Line 15000 minus lines 20700 to 23500 |
| Taxable income | 26000 | Line 23600 minus line 25700 |
Outside the tax return, “gross” usually means the top of your pay stub. “Net” means what lands in your bank account. Those aren’t the CRA’s net income, and that’s the confusion.
What does gross income look like on a pay stub?
Picture Sam in Calgary who signs a job offer for $60,000. Spread over twelve months that’s $5,000 of gross pay a month, or about $30.77 an hour on a 37.5-hour week. Using our Ontario figures for the same salary, the take-home works out to roughly $3,945 a month after income tax, CPP and EI, so about $1,055 a month goes before you ever see it. Alberta’s tax is different, so Sam’s own stub will not match to the dollar.
That gap is why a “$60K job” feels smaller than it sounds. Budget from the lower number, and a few bucks of slack shows up at month end instead of a hole.
What comes off an $85,000 salary
Our income tax calculator shows the steps for someone in Ontario with $85,000 of employment income. Taxable income comes out at $83,873, a bit lower than the pay, because the top-up part of CPP comes off as a deduction (about 1% of pay above $3,500). Federal tax is $10,226.60 and Ontario tax is $5,324.46, so income tax is $15,551.05. CPP and EI take another $5,769.52.
What’s left is $63,679.43. That’s about 75% of the gross figure. The average tax rate shown is 18.3%, yet you keep a good deal less than 81.7% because CPP and EI aren’t part of that rate.
Want it the other way round? If you know the take-home amount you need, the net to gross calculator works backward to the pay you’d have to ask for.
Gross income if you run a business
Self-employed people use the word for revenue before expenses. Your return has lines for both the gross figure and the net figure of self-employment income (lines 13499 to 14300), and it’s the net figure that gets taxed. The CRA points to Guide T4002 for the details of what counts as each.
A business with $150,000 of sales and $90,000 of expenses has $150,000 of gross income and $60,000 of net. Quoting the first to a lender or comparing it with a salary is a common slip. Put the net number next to a salary. The self-employed tax calculator starts from that profit figure. Its deductions lower income tax but not CPP, and it leaves out EI, so treat the result as an estimate.
Companies also talk about gross profit and gross margin, which are different again. If that’s your question, the profit margin calculator is the right tool.
Where gross income gets used
Job offers quote it. Many loan forms ask for it. If you’re sizing up a home loan, the mortgage affordability calculator starts from your income, and lenders’ own rules differ, so we don’t list ratio limits here.
Benefits work differently. The CRA says net income (line 23600) is what it uses for the Canada child benefit and the GST/HST credit. So an RRSP deduction can raise a benefit that a gross-income test would never touch. Does that mean gross income doesn’t matter? It does, for budgeting. It just isn’t what the CRA looks at for those payments.
Is gross income the same as your salary?
Not quite. Salary is one piece. Bonuses, taxable benefits from your employer, tips, interest, rent and a side gig all count as income on your return, and they all push total income past the number on the contract. A $60,000 salary plus $2,000 of bank interest means $62,000 of total income, even though your employer only knows about the first part.
Mistakes to avoid
Don’t budget from gross pay. Don’t compare an hourly wage with a salary until you’ve multiplied it out. And two people on the same gross income don’t keep the same amount, because province, pension plans and RRSP deductions all move the result.
One warning about our own tools. The take-home figure counts the basic personal amount and the pension and EI credits. Other credits and deductions aren’t included, so your own return can differ.
Where we got these figures
The definitions of total income, net income and taxable income are from the CRA‘s guidance for lines 23600 and 26000 and its page on self-employment income. Tax and payroll amounts are from our calculators using 2026 federal and Ontario rates, which rely on CRA data. The monthly and hourly splits are our own arithmetic on the $60,000 example. This site has no tie to the CRA or any government.
Frequently asked questions
What is gross income?
It's income before deductions. On a pay stub it's the pay before tax, CPP and EI. On the tax return, total income on line 15000 plays that role.
Is gross income the same as net income?
No. On your tax return, net income (line 23600) is total income minus deductions such as RRSP contributions. On a pay stub, net means the amount you take home.
Is taxable income lower than gross income?
Usually. Taxable income (line 26000) is net income minus further deductions. For an employee, the enhanced CPP deduction already puts it below pay.
What is gross income for a self-employed person?
It's the revenue before business expenses. The return has separate lines for gross and net self-employment income, and the net figure is what gets taxed.
How much of $60,000 do I keep in Ontario?
About $47,340 a year in our take-home pay calculator. It counts the basic personal amount and the pension and EI credits only.
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