Posts Tagged "tax brackets"

Income Tax – The Canadian Tax Bracket System

Posted by Preet on Oct 15, 2007 | 53 comments

Updated to 2009 Tax Year Personal Income Tax You may or may not be aware that Canada’s personal income tax system is set up in a “progressive” manner. Basically the more you earn, the more you are taxed. In fact you may have heard people referring to high-income earners losing half of what they make to income tax. While it is true that a high income earner will pay a lot of money in tax, they don’t normally pay HALF of their income to the income tax collectors. Tax Rates Allow me to explain… There is no 50% tax bracket in Canada. In Ontario, the highest tax bracket, or marginal tax rate,  that exists is 46.41% for income over $126,265...

Read More

What is a "Marginal Tax Rate?"

Posted by Preet on Jul 30, 2007 | 0 comments

This is a basic concept that should be understood as it is referred to on a regular basis. When you look it up, the definition almost always seems to include this: “The percentage of tax you pay on the last dollar you earned.” I’ve always thought of this wording as a bit funny.  While it is precise, it’s a bit too lawyer-speak for my taste. So let’s take a closer/better look… As a side note, unless a post is marked as an advanced level article, I’m going to use simple numbers and fictitious tax brackets for the purpose of educating without confusing. :) Our personal income tax system is designed to tax higher-income earners...

Read More