Why is the equivalent salary lower than my rate times my billable days?

Because a salaried role usually adds employer-paid benefits, paid holidays and CPP/CPP2 matching on top of base pay, value a contract rate has to include explicitly. Once those are factored in, the base-salary figure that matches your contracting income net-for-net is typically lower than a simple rate-times-days multiplication.

Does this factor in CPP2 for 2026?

Yes — CPP2, at 4% on earnings between $74,600 and $85,000 for 2026, is included on both the contracting side, where you cover it entirely yourself, and the equivalent-salary side, where an employer would match it.

What if I'm not sure how many days a year I'd actually bill?

Use a realistic, conservative estimate — most contractors bill well under 260 days once you allow for gaps between contracts, unpaid downtime and admin time, and understating billable days here will understate the salary you'd actually need to match your contracting income.

Contract Rate to Salary Calculator

Turn your hourly or day rate into an equivalent T4 salary for 2026, with employer CPP2, RRSP match and benefits valued line by line.

Day / hourly rate

Billable units per year

number of billable days (or hours) worked per year

Equivalent permanent salary

$121,249

Net annual income$88,000

Income tax$27,479

CPP (Canada Pension Plan — employee)$4,230

CPP (employer)$4,230

CPP2 (enhanced second tier — employee)$416

CPP2 (enhanced second tier — employer)$416

EI (Employment Insurance — employee)$1,123

EI (employer, 1.4x employee rate)$1,572

Total deductions$33,249

Effective tax rate27.4%

What your contract rate is really worth as a T4 salary

If you're comparing a contract rate against a permanent job offer, the honest comparison isn't rate times hours — it's what salary would leave you with the same net income, once you add back the value of an employer's CPP and CPP2 contributions, benefits, and paid time off that a contract rate has to cover on its own.

How this calculator works it out

Enter your day or hourly contract rate and your realistic billable days per year.
The calculator works out your gross contracting income, then finds the T4 salary that would net a comparable amount after tax and CPP.
Employer CPP2 contributions and typical benefits value are added to show the full picture, not just base salary.