You see your hourly rate, you know how many hours you worked, and then your deposit is hundreds of dollars less than you expected. That gap is your deductions. Understanding them helps you budget, spot payroll mistakes and make smarter choices about pensions and benefits.
Gross pay vs net pay
Gross pay is everything you earned: base hours plus shift premiums, overtime and holiday pay. You can estimate it with our nurse shift pay calculator.
Net pay (take-home pay) is what's left after deductions. For many nurses, net pay is roughly 65% to 75% of gross, but it varies a lot with income, location, pension and benefits.
Common deductions for nurses in Canada
| Deduction | What it is |
|---|---|
| Federal and provincial income tax | Withheld based on your TD1 forms and estimated annual income. The lowest federal rate is 14% for 2026. |
| CPP (Canada Pension Plan) | Mandatory contributions toward your CPP retirement pension, on earnings above $3,500 up to $74,600 in 2026, plus a second contribution (CPP2) on earnings between $74,600 and $85,000. |
| EI (Employment Insurance) | Premiums on insurable earnings, up to a 2026 maximum of $68,900. |
| Workplace pension | For example, HOOPP for many Ontario hospital nurses. Your contribution lowers your taxable income. |
| Union dues | Often deducted every pay period. They're tax-deductible when you file your return. |
| Benefits | Your share of health, dental, life or disability premiums, if any. |
Notice that CPP and EI stop once you hit the yearly maximum. That's why some nurses see a bigger paycheque late in the year: those deductions have been maxed out.
Common deductions for nurses in the US
| Deduction | What it is |
|---|---|
| Federal income tax | Withheld based on your W-4. |
| State and local income tax | Depends on where you live and work; some states have none. |
| Social Security | 6.2% of wages up to the annual wage base. |
| Medicare | 1.45% of all wages, plus an extra 0.9% on wages over $200,000. |
| 401(k), 403(b) or 457(b) | Retirement contributions. Traditional contributions lower your taxable income; Roth contributions don't. |
| Health, dental and vision premiums | Often taken pre-tax. |
| Union dues | If you're in a union. |
Why your overtime paycheque feels "over-taxed"
Payroll systems usually estimate your tax as if every pay period looked like this one, all year. A big overtime cheque can push the estimate into a higher bracket, so more is withheld. Much of that often comes back when you file your return, because your actual annual income is lower than the payroll estimate assumed.
In the US, nurses may also be able to claim the new federal deduction for qualified overtime pay. See our guide to no tax on overtime for nurses.
How to read your own pay stub
- Check that your hours match your schedule, including any shifts you picked up.
- Confirm each premium (evening, night, weekend, charge) appears and uses the right rate.
- Look at overtime and holiday hours and their multipliers.
- Scan deductions for anything new or unexpected.
- Compare year-to-date totals with last year's at the same point.
Payroll errors are common with complex shift schedules. If something looks off, ask payroll or your union representative. It's your money.
The bottom line
Your deductions aren't random. Some build your future (pension, CPP, retirement plans), some are mandatory (tax, EI, FICA), and some you can adjust (withholding forms, benefits, voluntary savings). Knowing which is which puts you back in control.
Start with your gross pay: use the free Nurse Shift Pay Calculator to check your premiums and overtime before you look at deductions.
This article is for general education and isn't tax or financial advice. Figures are 2026 federal amounts; provincial, state and employer rules vary.