What This Calculator Does
The Ontario Commission Tax Calculator estimates the income tax, CPP, and EI withholding that applies to a single commission payment for an Ontario employee in 2026. It shows the marginal withholding impact of one commission payment when combined with your annual salary and annualised across your pay frequency.
The calculator supports two modes:
- Mode A (No TD1X): Withholding is calculated on the full gross commission — this is the CRA default for most commission earners.
- Mode B (TD1X filed): Income tax withholding is reduced by employment expenses you have claimed on Form TD1X. CPP1, CPP2, and EI always apply to gross commission regardless of mode.
Data Sources — 2026 Rates
All rates are sourced from CRA publications and verified for the 2026 tax year:
- Federal income tax brackets: 14% / 20.5% / 26% / 29% / 33%
- Federal Basic Personal Amount: $16,452 (max) / $14,829 (min), phased out between $181,440–$258,482
- Ontario income tax brackets: 5.05% / 9.15% / 11.16% / 12.16% / 13.16%
- Ontario Basic Personal Amount: $12,989
- Ontario surtax: 20% above $5,818 / additional 36% above $7,446
- CPP1: 5.95% on earnings up to YMPE $74,600; basic exemption $3,500; max $4,230.45
- CPP2: 4.00% on earnings between YMPE $74,600 and YAMPE $85,000; max $416.00
- EI: employee rate 1.63% on insurable earnings up to $68,900; max $1,123.07
Ontario Health Premium is excluded from all calculations.
Calculation Methodology
Income Tax — Annualisation Method
Income tax withholding on commission payments follows the CRA annualisation method described in T4127 (Payroll Deductions Formulas) and T4032 (Payroll Deductions Tables). Your commission is multiplied by the number of pay periods per year to get an annualised commission income, which is added to your annual salary. The marginal federal and Ontario income tax on the commission portion is then extracted by comparing tax on total income versus tax on salary alone, and divided back to a per-payment amount.
CPP1 — Prorated Exemption
CPP1 uses the T4127/T4032 prorated basic exemption method: the $3,500 annual basic exemption is divided by the number of pay periods. CPP1 is calculated on (commission − prorated exemption) × 5.95%, capped at the annual maximum less any YTD contributions already made.
CPP2 — Second Tier
CPP2 applies to the portion of annualised earnings between the YMPE ($74,600) and YAMPE ($85,000). The annual CPP2 amount is prorated per pay period and capped at the annual maximum of $416.00 less YTD CPP2 already paid.
EI
EI premiums are calculated at 1.63% of gross commission, capped so total annual EI premiums do not exceed $1,123.07 (MIE × rate). YTD EI paid is deducted from the remaining room.
Federal BPA Phase-Out
The federal Basic Personal Amount is reduced linearly for income between $181,440 and $258,482, from a maximum of $16,452 to a minimum of $14,829. The BPA tax credit is applied at the 14% federal credit rate.
Ontario Surtax
Ontario surtax is layered on top of basic Ontario income tax: 20% on the amount of Ontario tax exceeding $5,818, plus an additional 36% on the amount exceeding $7,446.
What Is Not Included
- Ontario Health Premium
- Quebec-specific deductions
- Employer CPP/EI matching contributions
- Non-refundable tax credits other than the Basic Personal Amount
- RRSP, pension, or other deductions from income
Full Methodology
Part of the Calc-HQ.ca Network
This calculator is part of the Calc-HQ.ca network of Canadian tax and payroll calculators. All calculators in the network use CRA-sourced rates and follow CRA-published calculation methodologies.