Deduction

General

An amount subtracted from your income before tax is calculated, reducing the total tax you owe. Common deductions include RRSP contributions, child care expenses, and union dues.

Related terms

Gross income

Your total earnings before any deductions like income tax, CPP, or EI premiums are taken off. The number on your job offer is usually gross income; your actual take-home pay (net income) will be lower.
Net income

The amount of money you actually take home after all deductions. This is the number that matters for budgeting because it reflects what you actually have to work with each pay period.