How are taxes calculated on my pay stub?

I started a new job and see the amount of taxes taken out of my paycheque does not make sense. On my first pay I was paid for 1 week and taxes deducted were 16% of my gross. On my second pay (which was for 2 weeks) the taxes deducted amounted to 26% of my gross. Why is the % higher when I got paid more? From a full year perspective my expected fully year salary did not change?

Each payment is taxed as an annualized rate. The rates you got hit with are correct...another example would be if you added overtime to your next regular biweekly pay, the total amount is annualized and you are taxed accordingly (and even higher than 26%). Lump sums, like bonuses are also taxed based on an annualized pay, which is why for large bonuses, the tax rate increases to around 40%. I think the minimum tax rate is around 15.5 or 16%? Too late for me to confirm on CRA site.

Most employers use computers in this day and age, Ryan....

Ryan's explanation covers what happened, though, whether by computer or by hand. It's actually incorrect, the employer should have adjusted your first pay to reflect it was only a partial pay period. That means you were charged a little less than you should have been, but it'll be small, and it will all even out by the end of the year.

Your employer has picked a pay period. Say bi-weekly.

When you start your job, you fill out a form called TD1 to tell your employer your personal tax credits. The TD1 form tells your employer the 'code' (e.g. code 1, code 2).

Your employer looks up the bi-weekly wage in a book, with the code, to determine the tax. The formula assumes that the employee makes that wage the whole year. For example, if you make $2,000 a bi-weekly pay period, the payroll table calculates tax based on $48,000 ($2,000 x 24 periods) divided by 24.

Your situation makes sense. If you made $1,000 in one week, your employer looked up $1,000 in the bi-weekly pay period and took tax off assuming you make $24,000 a year. Then, the next period, if you made $2,000 say, the formula assumes you are making $48,000 and took tax off accordingly.