Compare · United States vs Canada

Compare take-home pay — United States vs Canada

Single filer, 2026 tax year, federal tax only. State (US) and provincial (Canada) tax is not included — see notes below for ranges.

On the same gross income, the US and Canada produce similar federal take-home for the typical single filer. The US levies Social Security + Medicare (7.65-9.05% combined employee-side) on wages; Canada levies CPP + EI (~7.6% combined employee-side, capped at lower thresholds). Income-tax brackets differ enough that the same gross can net out differently — but the gap is usually within 2-5 percentage points once social contributions are accounted for. State and provincial tax then move the comparison by another 0-13%.

How the two systems differ

The US and Canada both use progressive federal income tax with social contributions on top. The structures differ:

Federal income tax and employee contributions — US vs Canada, 2026
Item United States Canada
Basic allowance $16,100 standard deduction (single) $16,129 basic personal amount (BPA)
Lowest bracket 10% on first $12,400 15% on first $57,375
Highest federal bracket 37% (over $640,600) 33% (over $253,414)
Employee pension contribution 6.2% Social Security up to $184,500 5.95% CPP on $3,500-$71,300
Employee health / insurance 1.45% Medicare (no cap) + 0.9% above $200,000 1.66% EI up to $66,600 MIE
Combined employee contribution 7.65% to $184,500; 1.45% above; +0.9% above $200k ~7.6% combined; capped at $71,300 CPP + $66,600 EI
Tax year Calendar year (Jan-Dec), file by 15 April Calendar year, file by 30 April

Two structural differences worth noting:

  1. Canada's brackets are flatter. The 33% top rate kicks in at CAD $253,414; the US's 37% doesn't kick in until USD $640,600. For high earners, Canada applies the top rate to a much larger share of income.
  2. Both cap social contributions, but Canada caps earlier. CPP caps at $71,300 vs US Social Security at $184,500. EI caps at $66,600. Combined, a Canadian's employee-side contributions plateau at lower income than a US worker's.

Side-by-side at three income levels

Same gross income, same single filer, federal only. Exchange rate assumed at 0.74 USD per CAD (a recent average; actual rate varies).

US vs Canada take-home — single, federal only, 2026
Gross US federal tax US contributions US take-home Canada federal tax Canada contributions Canada take-home Gap
$40,000 $2,620 $3,060 $34,320 $3,581 $2,836 $33,584 US +$736
$75,000 $7,670 $5,738 $61,593 $8,913 $5,140 $60,947 US +$645
$150,000 $24,734 $11,475 $113,791 $25,340 $5,140 $119,521 CA +$5,730

At lower incomes, Canada takes a slightly larger share due to the higher 15% entry rate. At higher incomes, the US progressive structure takes a larger share as the 24% and 32% brackets kick in. The break-even is around USD $60,000.

At $40,000 gross

Federal income tax on a US single filer earning $40,000 is approximately $3,659 (10/12% brackets, $16,100 standard deduction). Adding Social Security ($2,480) and Medicare ($580) gives total federal tax + contributions of $6,719. Take-home: $33,281.

Federal income tax on a Canadian single filer earning $54,000 CAD (≈ $40,000 USD) is approximately $5,671 CAD (15% on taxable after BPA). Adding CPP ($2,172 CAD) and EI ($664 CAD) gives $8,507 CAD. Take-home: $45,493 CAD (≈ $33,665 USD).

At $40,000 USD gross, the take-homes are within $400 of each other (within 1.2%).

At $75,000 gross

US: federal tax ~$9,250, contributions ~$6,431, take-home ~$59,319.

Canada (CAD $101,000): federal tax ~$15,650 CAD, contributions ~$5,253 CAD (CPPP + EI capped), take-home ~$80,097 CAD (≈ $59,272 USD).

At $75,000 USD gross, take-homes are within $50 of each other.

At $150,000 gross

US: federal tax ~$24,272, contributions ~$11,725 (SS + Medi), take-home ~$114,003.

Canada (CAD $203,000): federal tax ~$41,820 CAD, contributions ~$5,139 CAD (both capped), take-home ~$156,041 CAD (≈ $115,470 USD).

At $150,000 USD gross, the Canadian take-home is slightly higher (~1.3%) because CPP and EI are both capped while the US Social Security continues to apply up to $184,500.

Why this comparison matters

Three common scenarios where the US-Canada comparison is relevant:

  • Cross-border work. A US citizen working in Toronto or a Canadian working in Seattle has to understand both systems — including the foreign tax credit and totalization agreement that prevents double contributions to CPP/EI and Social Security/Medicare.
  • Cross-border relocation. Someone considering a move from Toronto to Austin or vice versa. The federal-only comparison is the starting point; state/provincial tax is the second layer.
  • Negotiation benchmarking. US companies hiring Canadian workers (or vice versa) often need a way to compare offers on a like-for-like basis.

What's excluded

This comparison is intentionally narrow:

  • US state tax — 0-13% on top of federal. California, New York, Hawaii, and Oregon add 9-13%; Texas, Florida, Washington add 0%. The state line is often larger than the federal differential between the two countries.
  • Canadian provincial tax — 0-21% provincial income tax on top of federal. Ontario ~9-13%, Quebec ~19-25%, Alberta 10% flat, Saskatchewan 10.5-14.5%. The provincial line is usually 2-3x the state-provincial differential in the US comparison.
  • US credits (CTC, EITC, Saver's Credit) and Canada credits (GST/HST, Canada Child Benefit, WITB).
  • Healthcare — Canada has universal public healthcare (provincial-administered); the US has private insurance + Medicare/Medicaid. A like-for-like comparison would need to add US health-insurance premiums, which vary widely.
  • Pre-tax elections — 401(k), HSA, FSA in the US; RRSP in Canada. Both systems have analogous accounts that significantly change take-home.
  • Currency risk. USD-CAD rate moves daily. The numbers above assume 0.74 USD per CAD.