Decoding your First Paycheque

Image of a pay stub

The first paycheque at a new job is an exciting achievement, but it can also be confusing if there are deductions you are unfamiliar with. “Your paycheque will include Canadian Pension Plan, Employment Insurance, Federal Tax and Provincial Tax deductions, which are mandatory, but they may also include other deductions that vary from company-to-company,” explains Rodrigo Ramirez, Human Resources Coordinator at Cambrian Credit Union.

Many companies offer health insurance, life insurance, short term and long term disability benefits, and employees may be responsible for paying some or all of the costs associated with these benefits.  Any costs the employee has to pay will show up as a deduction on your pay stub, and costs contributed by the company will show up under a section outlining employer-paid benefits. They may also offer a pension plan, so contributions may be deducted from your gross pay, and if your employer matches your contribution, that will appear under “benefits”. Keep in mind that these benefits may not be offered immediately; often insurance coverage kicks in once you’ve completed your probationary period, and there may be a longer waiting period before you are eligible to join the company pension plan. Part time or casual employees may not be eligible for these benefits.

If you are in a unionized workplace, you may also be required to pay union dues, which will show up as a deduction on your pay stub.

Companies may also offer other taxable benefits, such as the personal use of a company vehicle, boarding, or gifts over $500 each year which should be outlined by your human resources department or your manager when you were hired.

Subsidized gym memberships or charitable donations are offered by many employers, allowing you to conveniently have the cost of a gym membership or a regular charitable donation deducted from your paycheque. If you opt in to any optional programs offered by your employer, they will show up under “deductions” on your pay stub. Before opting in to any optional programs offered by your employer, be sure to find out how long the term of your membership or donation commitment is.

If you have any questions about deductions on your pay stub, or your eligibility for company benefits, Ramirez suggests speaking with your manager or human resources department.