CNESST Wage Replacement Benefit: What's Left

A workplace injury stops your pay overnight. The CNESST steps in with a wage replacement benefit, and it is almost always summed up in a single figure: 90%. But 90% of what? Not of your gross salary — of your net income. And because the benefit is not taxable, the gap with your usual pay is smaller than the formula suggests.

What the CNESST pays: 90% of net income

When an employment injury keeps you from working, Quebec's Act respecting industrial accidents and occupational diseases (LATMP) entitles you to a wage replacement benefit, known in French as the IRR. The CNESST administers it and pays it out every two weeks.

The calculation starts from your gross annual employment income. The CNESST then subtracts income tax and social contributions, using its own tables, to reach what it calls your net retained income. The benefit is worth 90% of that amount.

Two limits are worth keeping in mind:

• the gross income taken into account is capped by a maximum annual insurable earnings amount, revised every year: above that ceiling, the extra salary is not replaced;
• the CNESST's net retained income is not exactly the net figure on your pay stub, because the two calculations do not subtract the same items. The amounts in this article give you the right order of magnitude, not the figure to the cent.

Why 90% of net, not gross

The choice is not arbitrary. Your gross salary is never what you actually receive: federal tax, Quebec tax, the QPP, Employment Insurance and the QPIP all take a share before the money reaches your account.

Paying 90% of gross would therefore hand an injured worker noticeably more than they earned while working. The scheme targets disposable income — the money that pays the rent and the groceries.

The benefit is not taxable

This is the piece missing from most explanations. Workers' compensation benefits paid by a provincial board are not taxable: the money the CNESST sends you arrives net, and no tax will be added to it the following spring.

That is exactly why the scheme starts from net. Replacing 90% of a gross amount that would then be taxed a second time would make no sense.

A worked example at $60,000

Take a gross salary of $60,000 a year in Quebec — a round case chosen for illustration, using the 2026 parameters. Here is what the mandatory deductions do to it:

That leaves about $45,383 net a year, or $3,782 a month. At 90% of that net figure, the CNESST benefit would land around $40,845 a year, close to $3,404 a month.

The gap is therefore roughly $4,538 over a full year, or about $378 a month. That is a real cut in a household budget, but it is nowhere near the $14,617 that mandatory deductions already take out of the same salary.

To run the exercise on your own pay, the Quebec net salary calculator gives you the annual and monthly net figures; from there you simply take 90% of it.

What it changes for your taxes and credits

Not taxable does not mean invisible. The board that compensates you issues a T5007 Statement of Benefits slip, where box 10 carries the total benefits you received during the year.

That amount then makes two trips through your federal return:

1. you first enter it as income, on line 14400;
2. you deduct exactly the same amount on line 25000, the other payments deduction.

The result of that detour: the benefit is included in your net income without being taxed. It is not a pointless formality. Several benefits and refundable credits are calculated from net income, and leaving the amount out would artificially inflate what you appear to be entitled to — a sum that would eventually be clawed back.

The first 14 days are paid by your employer

The CNESST does not take over immediately. For the first 14 days following the accident, your employer pays the benefit: 90% of net income for the days you would normally have worked, not counting the day of the accident itself. The employer is then reimbursed by the CNESST. That rule also comes from the LATMP.

While the claim is being reviewed, some employers do something else: they keep paying the salary, or they advance money. The tax treatment differs in each case, and the Canada Revenue Agency spells it out for workers' compensation board awards:

• salary paid while waiting for the decision: this is salary, so it is taxable, insurable and pensionable. Income tax, pension plan contributions and Employment Insurance are withheld as usual;
• an advance or a loan, identified as such in the payroll records: no payroll withholding at all;
• a top-up amount paid on top of the benefit once the claim is accepted: income tax and pension plan contributions are withheld, and the amount is reported on a T4 slip.

Check your pay stub to see which of the three situations applies to you: it changes what you receive each week, and the slips you will get next year.

What to keep in mind before you do the math

• 90% of net, not of gross. Comparing the benefit to your gross salary makes the loss look far bigger than it is.
• Not taxable does not mean not reported. Keep the T5007 slip: without it, the net income on your return would be wrong.
• The ceiling is real. Above the maximum annual insurable earnings, the portion of salary that exceeds it is not replaced, so higher salaries lose proportionally more.
• This is not the ordinary sickness route. An absence that does not stem from an employment injury falls under Employment Insurance instead, where benefit calculation follows completely different rules.