Understanding a first pay stub in Canada

First jobs · 8 min read

The first pay stub is a small document with an outsized effect: it is where a teen discovers that hours times wage is not the amount that arrives. The site's first-jobs guide covers that shock in general terms. This guide goes one level deeper, line by line, using the Canada Revenue Agency's 2026 payroll figures checked on October 13, 2026 — because the most common teen question, why is CPP missing from my stub, has a precise answer that most adult explainers never mention.

Start with the five sections, not the deductions

Before decoding any deduction, read a stub in a fixed order. First, the pay period and the employer and employee names — a stub for the wrong period explains nothing. Second, hours and rate, because every later number is built from them. Third, gross pay for this period: hours multiplied by rate, plus any other pay the employer lists. Fourth, the deductions section, which is the rest of this guide. Fifth, net pay and the year-to-date totals, which show how much has been earned and deducted since January, not just this pay. A stub is a running record, not a single receipt, and the year-to-date column is what connects one paycheque to the tax return that follows it.

One vocabulary point prevents most confusion. Withholding is an estimate paid during the year. Owing is the final calculation at tax time. An employer withholds based on forms and tables; the return settles the difference. A teen can have tax withheld every pay and still owe nothing for the year — and that gap is normal at teen income levels, for reasons explained below.

Income tax: federal and provincial, withheld by estimate

Income tax on a Canadian stub is really two taxes travelling together: a federal part and a provincial or territorial part, withheld by the employer and sent to the government. Employers base that withholding on personal tax credits forms — the federal TD1 and a provincial TD1 — which is why a new hire is handed those forms early. The amounts a teen claims on a TD1 tell payroll roughly how much income to treat as tax-free, so the per-pay withholding lands closer to the final bill.

Why do many teens get withheld tax back? Payroll withholding assumes each paycheque repeats all year. A teen who works full-time only in summer, or a few shifts a week during school, can be withheld as if that pace continued for twelve months, then file a return showing the much smaller actual annual income. The return is where the over-withholding is corrected. That is also why keeping every stub and the employer's year-end T4 slip matters: deductions taken during the year are reported on the T4, and the return cannot claim credit for amounts the teen cannot show.

What this guide deliberately does not do is quote a personal tax-free threshold as a promise for every teen. Rates, credits, and the basic personal amount change by year and by province, and a family's situation can add credits or income from other sources. The safe teen rule is narrower and always true: never budget from gross pay, keep the paperwork, and file the return even when no tax seems owing, because filing is how a refund of excess withholding is released.

CPP: why most teens under 18 see $0 — correctly

The Canada Pension Plan line is where teen stubs differ most from adult stubs. An employer has to deduct CPP contributions only when the employee is 18 to 70 years old; employees under 18 do not contribute to CPP. More precisely, CPP deductions start in the first pay dated in the month after the employee turns 18. A teen who turns 18 mid-month should therefore expect the CPP line to appear on a stub shortly after that birthday, not on the birthday pay itself — and its absence before then is correct payroll, not a mistake to report.

For workers who do contribute, the CRA's 2026 figures are these. The employee rate is 5.95% of pensionable earnings between a $3,500 basic exemption and the year's maximum pensionable earnings of $74,600, for a maximum employee contribution of $4,230.45. No CPP is deducted from the $3,500 basic exemption amount. A second layer, CPP2, applies only to earnings between $74,600 and $85,000 at 4%, with a maximum of $416 — a range no part-time teen job will reach, included here only so a teen who sees CPP2 explained in an adult guide knows why it will not appear on their stub. Quebec workers are the exception to keep in mind: Quebec runs its own pension plan, the QPP, instead of CPP, so a Quebec teen's stub follows that plan's rules rather than the figures in this section.

What does CPP buy? It is a contribution toward retirement and related benefits later in life, matched by the employer. For a teen, the practical lesson is timing, not the benefit math: turning 18 changes take-home pay even if the hourly wage does not move, and a budget built at 17 needs a small adjustment at 18.

EI: the deduction with no age limit

Employment Insurance behaves differently, and the contrast is the easiest way to remember both rules. EI premiums are calculated by the employer, and there is no age limit for EI deductions. A 16-year-old and a 40-year-old both pay EI on insurable earnings from the first pay. For 2026 outside Quebec, the CRA employee premium rate is 1.63% of insurable earnings up to maximum insurable earnings of $68,900, for a maximum annual employee premium of $1,123.07. The employer pays 1.4 times the employee premium — money the teen never sees on the stub as a deduction, but a useful fact when a teen wonders what their job costs the employer beyond the wage.

EI is also the deduction a teen is most likely to benefit from soonest in principle, since it funds temporary income support when a worker loses a job or cannot work in defined circumstances. Eligibility for benefits is a separate question from paying premiums, and this guide does not promise any teen a benefit — it only explains why the premium line appears, at every age, on every stub.

A worked example at $12,000 a year

Numbers make the rules stick, so here is one complete, checkable example using only the 2026 CRA figures above. Suppose a teen earns $12,000 in a year from a part-time job, outside Quebec. The arithmetic is an illustration of the mechanics, not a tax calculation for any real person — actual withholding is per pay period and the final tax bill is settled on the return.

Two lessons fall out of the table. First, the age-18 change is worth $505.75 a year at this income — about $42 a month — which is exactly the kind of quiet change that breaks a budget built on an old net-pay number. Second, EI is the constant: $195.60 in both columns, because its rule has no age condition. A teen who can explain those two facts can read almost any stub they will be handed in the next few years. A related household habit helps the net pay go somewhere useful: deciding in advance what share of earnings goes to savings — some families suggest at least half while a teen lives at home, toward goals such as university, a car, or a laptop — turns each stub from a surprise into a progress report.

How to check a pay stub in five steps

1. Match the pay period on the stub to the shifts actually worked, and confirm the hourly rate matches the agreed rate.
2. Multiply hours by rate and compare with gross pay. If they differ, look for a listed reason — overtime, vacation pay, or a correction — before assuming an error.
3. Check each deduction against the rules above: EI should be present at any age; CPP should be absent under 18 and present after the month following an 18th birthday; tax is an estimate, not a verdict.
4. Confirm net pay equals gross pay minus total deductions, and that the amount deposited matches the net pay on the stub.
5. Glance at the year-to-date totals, then file the stub with the year's other pay paperwork so tax season starts with a complete folder.

What success looks like: the teen can point to any line on the stub and say what it is, why it is there, and whether its size looks right — and can show the folder where this stub and its T4 will live. A stub that passes all five steps needs no further worry until the next pay.

If a check does fail — hours short, rate wrong, CPP deducted before 18 — the first move is a polite question to the employer with the stub in hand, not an accusation. Payroll errors are usually fixable, and learning to raise one calmly, with the document as evidence, is itself a workplace skill worth more than the dollars on any single stub.

Frequently asked questions

Why is there no CPP on a 17-year-old's stub? Because CPP contributions apply to employees aged 18 to 70 and start with the first pay dated in the month after the 18th birthday. Before that, $0 is the correct amount.

Why is EI taken from a teen who cannot be sure of benefits? EI premiums have no age limit and are deducted on insurable earnings from the start of work. Paying premiums and qualifying for a later benefit are governed by separate rules.

Will withheld income tax come back? If more was withheld during the year than the final tax calculation requires, the difference is addressed when the teen files a tax return. Keeping stubs and the T4 is what makes that settlement possible.

General information only — this article is not financial advice. For specific financial questions, talk to a qualified professional.

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