Income Tax – The Canadian Tax Bracket System

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 (for the 2009 tax year). So right off the bat you can see that someone would not lose HALF their earnings to income tax. But there is more to this story than just the top tax rates. Let’s start with an example and then work backwards… If Bob earned $130,000 for 2009, he would have a combined total federal and provincial income tax of $41,171. That would leave him with a “take-home pay” of approximately $88,829. As you can see this is clearly not half of his income. So what gives?

The Candian tax system uses what are commonly called “tax brackets”. Each bracket has its own rate of tax, and as you move up through the brackets the marginal tax rate increases until you reach the top tax bracket which is 46.41% (Ontario). Here are the income tax brackets for Ontario (2009 Combined Federal and Ontario Provincial Personal Income Tax Rates as sourced from Ernst & Young):

Income Bracket Marginal Tax Rate
$0 – $10,320 0.00%
$10,321 – $12,269 15.50%
$12,270 – $15,658 27.60%
$15,659 – $36,848 21.55%
$36,849 – $40,726 24.65%
$40,727 – $64,881 31.15%
$64,882 – $73,698 32.98%
$73,699 – $76,442 35.39%
$76,443 – $81,452 39.41%
$81,453 – $126,264 43.41%
$126,265 + 46.41%


If you earned $130,000 you would be in the highest of tax rates subject to the highest “Marginal Tax Rate” of 46.41%, but that rate of 46.41% ONLY applies to the income over $126,265. As you can see from the table above, the first $10,320 of your income (no matter how much your total income is) incurs no personal income tax. The concept of “Average Tax Rate” is just a way of figuring out roughly how much of your income is going to the government in the form of personal income tax. If we go back to our high income earner ($130,000) and do the math, we will find: $41,171 Total Tax Bill / $130,000 Total Income = 31.67% Average Tax Rate.

Average Tax Rates serve no purpose for tax filings – they are only calculated to see how much of what you earn is going to the government. MARGINAL TAX RATES come into play for many calcuations and are important in calculating the effects of certain financial strategies – so that number is ultimately more important. The Average Tax Rate is just nice to know… Or not! :)

Here is a link for quickly figuring out your Marginal Tax Rate, Average Tax Rate and Tax Rates on different types of income.

Preet Banerjee
Preet Banerjee
...is an independent consultant to the financial services industry and a personal finance commentator. You can learn more about Preet at his personal website and you can click here to follow him on Twitter.
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Showing 76 comments
  • Patrick

    The brackets are more complex if you include CPP, EI, and the Ontario “health” premium. Here are my calculations:

    http://a-loonie-saved.blogspot.com/2008/03/income-tax-rant.html

    (My lower brackets don’t line up with yours, so you may have found a bug in my tax calculator…)

  • Penny Stock Picks

    Not only in Canada, I believe many other countries also set up a progressive income tax system. It is only fair if the more you earn, the more you are taxed.

    • Bernhard Schmitt

      Why is it then that the tax braket shows that one pays 27.60% for your income beteewn $12,270 – $15,658 and only 21.55% beteewn $15,659 – $36,848? Do we not pay higher percent tax when our income is higher?

    • kim

      That`s ridiculous…. if you earn more its probably because you have spent the time and money for your education…and with all your hard work you get taxed more to support those who are on E.I. and other assistance. Its stealing from those of us who have worked our way up! The gaps are quite large – take a closer look. How is it that one who earns at the lower end of the gap has to pay as much as the top amount?

      • albert

        true
        canada needs money, 70% of government revenue is from the people who work? and what do they get back in return? a health scam like an insurance scan

        and who gets this money, the big hoots in the government and the unqualified refugees who, and bums who sit on their butt drinking beer
        this is not a good thing… it is a hoax like many other things in Ca

      • John

        Is it the first time you know this Canadian gov are bunch of thieves , this system was made to was made to let people who make money from their hard work and their years of education and experience always in need , look to the majority of people who have good income , they have house , car , ect.. but most of them they have mortgage , car loan , credit cards dead etc..they have to be always in need to let the banks making billions of dollars and tax payers who pay high tax for their income usually get nothing , same time , lazy people who have no skills , less education , or no job at all , getting the rewards for them and their kids, myself , working hard to earn my money , and my income in the bracket $81,453 – $126,264 , so I am paying almost half of my income as income tax , if you add the property tax , GST etc, you will see how the Canadian gov like they don’t have any other income other than our tax , no industry , no production , nothing , everything made in China and Europe , the tax should be that high if Canada is lack of resources , sometimes when I think after all this hard work and years spent in my education and how much will get as pension I want to cry or leave this stupid place.

      • Bob

        all these neo con rednecks whining about taxes, how about you shut the fuck up and suck it up. “and my income in the bracket $81,453 – $126,264″ lol yea, quit lying you jackass. look at all those fuckin commas, looks like all those years of education did you a lot of good.

    • John

      Penny Stock Picks your are an idiot

      there are fairer ways to do it, even if you hada flat tax rate and had to pay say 10%, if you earned 10K that would be 1k in taxes, but if you earned 100k, that would be 10K in taxes that is still ten times more.

      People like you, as it was a person who made this comment, should have gone to school and at least past grade three math. To think you may even have the right to drive on the highways of Canada

      Nut

      • crystal

        10x more because the income is 10x more. It offsets the difference in taxes, it’s the difference in taxable income.

    • jenn

      And why is that fair? You’ve left out any reasoning behind your syllogism. 

  • Patrick

    @Penny Stock Picks: You don’t need a progressive tax system for that. Higher earners pay more tax than lower earners in a flat tax system too.

    I wasn’t making any judgment about progressive tax systems–only about overly complex ones.

  • Patrick

    Man, I hope we can get the income tax abolished some time in the future! I like how Ron Paul advocates that in the US.

  • Russ

    Hi Preet,
    Just a quick note regarding the link to tax rates on income: It takes you to Ernst & Young’s website, but I see no tax rate calculator anywhere on the site. Bad link perhaps?

    P.S. Thanks for the contest. I didn’t win(story of my life) but it was nice to have the chance. Look forward to more “reader rewards” in the future.

  • Preet

    @Russ – thanks for noticing that. I’ve updated the post and links for 2009! Cheers!

  • Dale Latam

    I believe there is a number mistake on your tax bracket quotes…
    $10,321 – $12,269 15.50%
    $12,270 – $15,658 27.60%….???? should this be 17.60%
    $15,659 – $36,848 21.55%

  • Preet

    @Dale Latam: No, it is correct as is. Here is the verbatim explanation from Ernst and Young: “Individuals resident in Ontario on 31 December 2009 with taxable income up to $12,269, pay no provincial income tax as a result of a low-income tax reduction. The low-income tax reduction ($205 of Ontario tax) is clawed back for income in excess of $12,269 until the reduction is eliminated, resulting in an additional 6.05% of provincial tax on income between $12,269
    and $15,659.”

  • Ivo

    This is excellent. Where are these numbers coming from, though? CRA has much smaller number of brackets listed on their page:

    http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html

    and if you combine federal with provincial numbers (for Ontario), I see much larger number of brackets here. For example, where is the number $12,269 coming from (that, of course, is not the only number that does not line up)?

  • Preet

    @Ivo – the above figures factor in thresholds for certain tax credits I believe, which can be more advantageous at lower incomes and reduced with higher incomes. I believe the list posted here is actually more accurate than the CRA link you posted, which does not include various credit programs, just the hard brackets.

    We certainly have a complex tax system, don’t we? :)

  • Ivo

    Preet: Thanks for your response. Another question. I tried to write a simple calculator using the table above, and the results were consistently different from the results obtained on the online E&Y calculator:

    http://www.ey.com/CA/en/Services/Tax/Tax-Calculators-2009-Personal-Tax

    Than I tried a very simple example:

    Income = 12,000
    Tax = (12000-10320)*0.155 = $260.4

    but the online calculator gives $252.

    Does that mean that the table above doesn’t give the whole picture?

  • Ivo

    Just to add, the $252 number in the example above is easily derived if the tax for the first bracket is 15% instead of 15.5%:

    (12000-10320)*0.15 = 252

    Since the online calculator matches what my employer calculates, I am guessing that the table above is not quite correct. It seems like the higher brackets are fine, but the lower brackets are not.

  • Conrad

    Does anybody here know how the government taxes income made on the Foreign Exchange if it is the sole income. I’m a student, don’t have any significant income and was hoping to mess around with Forex using some savings i’ve managed to scrape together. Just wondering what taxes I can look forward to.

  • Patrick

    @Conrad: First of all, don’t do it. Forex is a zero-sum game, so you have to think you know better than all the pros that do this for a living. As Benjamin Graham warned, you either need to be a defensive investor or an enterprising (professional) investor; you can’t be somewhere in the middle:

    There is no room in this philosophy for a
    middle ground, or a series of gradations, between the passive and
    aggressive status. Many, perhaps most, investors seek to place
    themselves in such an intermediate category; in our opinion that is
    a compromise that is more likely to produce disappointment than
    achievement. As an investor you cannot soundly become “half a businessman,” expecting thereby to achieve half the normal rate of business profits on your funds.

    Unless you’re going to become a professional forex trader, you ought to stay away from it entirely.

    Having said that, your hypothetical profits would be taxed as capital gains.

  • Linda

    We, do so lose more than, half of our earnings to taxes. Clothes are taxed, gas, is taxed, vehicles are taxed, furniture, is taxed, second hand goods are taxed. Stop, and think of, what else you purchased, that was taxed. Then think of the HST, being forced on citizens. The HST burden, will fall on people with, no jobs, losing their homes, seniors, wage earners and low income families, and many of us will be homeless because, of the HST. Canada, is so corrupt. There are not enough, wage earners, low income families and seniors, to pay for that corruption, therefore, the governing officials have to dream up new taxes. If the corruption was stopped, there would be no need to tax, the citizens in this country to death. However, the government is an ass, so, we must be prepared, there will be much worse to come.

  • Wow

    Thank, You, Very, Much, Linda, For, Your, Insightful, Comment, Maybe, Next, Time, You, Could, Make, It, Seem, Somewhat, Credible, By, Using, Proper, Grammar. Why does the internet allow this kind of situation to occur?

    P.S. Linda, if you are still a young, developing mind, I’m sorry for mocking you. If this truly is the case, then continue to build on your feelings. However, you certainly need to gain a better grasp on the English language. If you do, maybe one day you can change this country (or who knows… maybe even the world) for the better.

    • John

      Wow, you are an idiot too, just like Penny Stock Picks

  • steve green

    of coarse the person who stated that clearly you don’t pay half your income to taxes is a complete fool in my 31% tax bracket thats not half my pay BUT I PAY TAXEX ON EVERYTHING I BUY DON’T I ADD THAT UP FOOL THE GOVERNMENT OF THIS COUNTRY OUGHT TPO BE ASHAMED AND WE AS CANADIANS SHOULD BE ALSO WE HAV NO BALLS A CIVIL WAR IS EXCATLY WHAT WE NEED

  • steve green

    PS TO YOU CLOWN IT DOESN’T TAKE PROPER GRAMMER TO REALIZE THE GOVERNMENT OFFICES ARE FULL OF THEIVES IF BY INSULTINGS SOMEONES GRAMMER OR USE OF MAKES PAYING HIGHER TAXES ANY BETTER HOPEFULLY YOU LEARN MANDIRAN REAL QUICK WONT BE LONG BEFORE THATS THE OFFICAL LANGUAGE

    • Gregory Peck

      Huh? Speak English, I don’t understand what you are trying to say.

  • Chris

    You forgot PST, GST and the soon to come HST. That is why it is over 50% for those making incomes greater than $100,000!

    • richard237

      EXACTLY!!!
      46.41 % +
      5.00 % GST
      5.00 % PST
      = and i say = 56.41% tax. Then there is fuel tax, city taxes, land tax, alcohol tax, tobacco tax.. and so on!

  • Patrick

    Taxation is theft.

    Only the State obtains its revenue by coercion, by threatening dire penalties should the income not be forthcoming. That coercion is known as “taxation,” although in less regularized epochs it was often known as “tribute.” Taxation is theft, purely and simply, even though it is theft on a grand and colossal scale which no acknowledged criminals could hope to match. It is a compulsory seizure of the property of the State’s inhabitants, or subjects.” – Murrray N. Rothbard

  • Patrick

    Jeez… I just want everyone to notice that there are at least two different “Patricks” posting here. I’m not so naive as to think that taxation is theft!

  • Patrick

    Patrick: so u don’t think it is theft? What is your definition of the word theft?!

  • wow

    wow not understanding, the third bracket is the wrong % and 46.41% of $130 000 is $56 433 not 41k who does the math you better do it again

    • Preet

      @wow – please read the post again. The third bracket is not wrong, it just looks wrong – explanations provided in the comments. And 46.41% is the MTR not the average tax rate for a $130,000 income.

  • ZDude

    For any who are confused, this is exactly how to calculate your marginal tax rate using his original example of an income of $130,000. I rounded off the tax rate percentages for simpler calculations. There are no taxes for the initial $10,320 so we’ll start with the next bracket:

    ($12,269-$10,321)15% = $292.20
    ($15,658-$12,270)28% = $948.64
    ($36,848-$15,659)22% = $4661.58
    ($40,726-$36,849)25% = $969.25
    ($64,881-$40,727)31% = $7487.74
    ($73,698-$64,882)33% = $2909.28
    ($76,442-$73,699)35% = $960.05
    ($81,452-$76,443)39% = $1953.51
    ($126,264-$81,453)43% = $19268.73
    ($130,000-$126,265)46% = $1718.10

    Add those numbers up and you get $41,169.08

    Taxes are not difficult or complex. It just has to be explained correctly. Here’s a good link about marginal and average tax rates.

    http://www.maxi-pedia.com/marginal+average+tax+rate+difference

  • Sean Williams

    Wow, I see they’ve finally eliminated the incidious little line on the return called “surtax”, where you figure out the tax amount using the brackets, and then add an additional 50% to it. That made the rate WAYYYY more than advertised.

    They still do the trick where they don’t reduce your taxable income using your deductions (which would reduce the number of dollars in the highest bracket) but rather they “give” you non-refundable tax credits, which reduce the tax dollars under the lowest rate.

    Don’t forget about each additional bucket the Feds keep for CPP, EI, and then every other level of tax you pay such as municipal property taxes, federal GST, and then provincial taxes, surtaxes, fees, and hidden taxes in gas, etc. You are still quite readily being RAPED by the government as a whole.

    Anything that any level of government takes from you is part of “taxes”. There is a constant shift of money transferred between levels of government as “transfer payments”. If city “X” doesn’t dance like a monkey for the Feds/Prov, they cut the flow of transfer payments, and they city turns around and raises fees, mill rates, and ups the value of properties. In the end there is only one taxpayer – you.

  • Michael MacDonald

    this is misleading
    the tax rate and health care benefits depend on the province.

    there is a common myth now a days
    that, canadians are taxed to death because of our health care system
    this is not true..
    you end up paying a lot less in totality than if you were an american with health insurance
    that’s a fact
    this myth is being created in order to discredit public health care
    please be careful not to be part of this

    • jenn

      Public health care is actually a lower standard than private health care.
       
      If I earn 300,000 – and in Canada – I pay the income tax on this – about $119,000. Compare to Florida, where there is no state income tax, there is only Federal Income Tax (which, for this tax bracket, is 33%). Therefore in Florida, I would only pay $99,000. This is a difference of $20,000 a year in income. Forget about the fact that the sales tax there is only 6% compared to Canada’s 13%.
       
      Are you saying that health care premiums in the US are more than 20,000 a year?? That’s utterly ridiculous. Even if premiums were as high as $1,000 (which they aren’t), that would only be $12,000. For the $12,000 – you are getting the best health care the world has to offer. Much shorter waiting times, more advanced medicine, beautiful hospitals, and the best doctors in the world. In Canada, you pay $20,000, and what do you get? “Free Health Care”??? Hardly. You get second rate, public health care, long waiting lists, and almost no return for your money. 
       
      I have a chronic illness and have been a patient in four health care systems – Canada, the US, Ireland and England. England’s two-tier system was probably my favourite (I was in the public branch, and it still far exceeded Canada’s health care). In Canada, I was subject to negligence, malpractice, waiting times so long it was extremely detrimental to my health, and a poor standard of health care in general. When I lived in San Francisco, I called up a specialist, got an appointment 7 days later (I had to wait 9 months in Canada. Nine months), paid $250, got the prescriptions I needed, and had three tests ordered over the next two weeks that would have taken about a year to get, altogether, in Canada.
       
      If you think Canada has a wonderful health care system, you’ve either never been sick (i.e. know nothing about it, except in theory), or you’ve never been a patient in any other health care system.

  • inspection building

    Handy site! I never was 100% clear on what I was getting taxed.

  • Michael MacDonald

    I see some people still don’t understand how income tax works
    because they are following that ron paul guy.

    Here’s the down low
    when a politician starts talking about lowering taxes
    he always ends up lowering taxes for the rich, corporate tax cuts, and making more budget cuts to the programs we need.
    always.. it never fails to be exactly the same.
    it’s always the right wing conservative types who use this to their advantage.
    It’s so easy to get people on your side by saying you’re going to lower taxes but when in history has a politician ever been true to his work about this.

    truth is. You shouldn’t want them to lower taxes!
    you should want them to raise the tax bracket for the rich and lower it for the poor.
    SPECIFICALLY
    If you actually believe a politician when they say that they are lowering taxes you are totally uniformed
    and have not evaluated the history of politics in the U.S. and Canada.

    Please,
    do your homework
    our income taxes pay for all of the programs we need and our country would fall apart without them
    any politician claiming that he’s going to lower taxes or even get rid of the income tax
    is totally full of it.
    don’t buy it
    I’m obsessed with politics
    I wouldn’t say this if I wasn’t sure

    • Barry

      you say our country would fall apart without them … i think we can do without the federal government

      federal and provincial overlap in some areas…. why spend twice as much for half as much..??

      you also talk about income taxes what about all the other taxes??? maybe do your homework !!!!

      are you a politician???

    • jenn

      I see a loop-hole in your logic. Perhaps you can explain it? Why would you be so gung-ho to introduce tax strategies that drive the highest income earners, the brightest of the human resource pool, to emigrate? Remember, Canada is very close to the US, and the US is more than happy to take Canada’s most intelligent, most educated, white/english-speaking professionals. 
       
      I, for example, am a third year law student in one of Canada’s best law schools. I also hold a law degree from London (England). I plan to immigrate to the US as soon as humanely possible – for the same reasons most of the other professionals leave – higher salaries, lower taxes, significantly better climate (I am going to California), and superior services (i.e. Private Health care in the US has been shown to be much better quality than standard-Canadian health care, and easily affordable to my tax bracket, if not covered by your employer). So, what is the benefit to Canada to “raise the tax bracket for the rich”? The US have made it so easy to get a professional-TN visa (it took me 30 mins), so it’s easier than ever before for Canadians to leave the huge tax-burden (without equivalent return of services) of Canada and move to the US. Raise taxes, making the hard work of professionals even less beneficial to them, and they will leave. Why would they stay? What I would like you to explain is what you perceive the incentive of the highest-income earners (who you are so keen to tax) to be in staying in Canada. I’ve already planned my emigration (and I am far from the only one), so obviously I didn’t see any incentive.

      • jenn

        *humanly 

      • tom

        You should be ashamed,or embarrassed.. Like a thief in the night you take advantage of our higher educational standards.(subsidized by the taxpayers)turn your back and run to the highest bidder..WHORE!!! Then put this in a public forum.. Typical lawyer..

  • Stephanie

    I just love how it states:

    “There is no 50% tax bracket in Canada. In Ontario, the highest tax bracket that exists is 46.41% for income over $126,265″

    well then… WOAH buddy MY MISTAKE. thats a HUGE difference! (insert sarcasm). Even if you look at poeple making 40 grand a year that translates to 27,540. Or someone making 80 grand a year, your looking at 48,472. I dont know about you but those numbers seem pretty rediculous!. Whats the point of asking for raises or trying to get ahead in your carrier when you wont see much of a difference?

    • Preet

      I don’t think you’ve quite grasped the concept of marginal tax and the brackets. An income of $80,000 in Ontario for the 2010 tax year would incur $19,050 in income tax. While the marginal tax rate would be 39.41%, this is not applied to the full $80,000, only the amount from $76,987 to $80,000. The first $10,382 incurs no tax. From 10,383 to 13,022 the rate is 15%.

      • Jeet

        Oh Preet you tried. It was a valiant effort but most people will never get the concept of MTR as well as the fact that there is federal and provincial taxes involved.

  • Kan

    I am hoping someone can help me figure out the difference in the amount of tax payable, assuming there are 2 families with same income (let’s take a hundred grand) with the first family having 2 children and the second family having five. I have always been curious because I come from a large family.

    • Preet

      Nominal difference Kan. Income tax is based on the income earned by the individual. There are a few small tax breaks and benefits for having kids (but obviously outweighed by the overall cost of raising them also), so the difference would be between a few hundred and a few thousand dollars perhaps, depending on which credits you take advantage of.

      • Kan

        That’s what I thought. My five children will be brought up in the best way we can and sent through university to become good contributing citizens. In the meantime, our family would be living within a tighter budget twice that of an average family. I wish there is some way this can be corrected. Although Of course, this is a debatable issue. Many thanks for your reply and more power!

        Kan

      • ghost

        Shame on you Kan for having 5 kids, and further trying to insult the masses of people by trying to “correct” that by paying less than your FAIR share.
        Let’s be clear, if you’re really looking to contribute, raising children and pushing them through university is probably not going to even make a miniscule difference as compared to their planetary utilization.
         
        Selfish people like you are a major reason we have problems in the world today.

  • Jon

    So I got a summer student as a student. I recently got my pay, (for 116 hours, 36 hours added on because my hours were not submitted for the pay period before) Anyways earning about 25/hr, for 116 hrs = 2900. I get paid bi-weekly.

    So here is the problem.. I will only be working for four months, and my federal tax seems way to high for me, just wondering if anyone can clarify why it would be so high or I’m just realizing what the real world is like?

    My total deductions came out to 880.xx. The federal tax being the hightest at 685.xx so my total pay was 2114.xx after the deductions. Is it me or is that crazy, I lost 36 hours of pay or 28 if you just count the federal.

    Thanks, haha.

    • Jon

      Oh I live in AB by the way.

      • Aimee

        The same thing happens to me when I work full time during the summer. Basically your deductions for the pay period ‘assume’ that you will be making the same amount each paycheque. So during a week with a lot of hours you could technically go into the higher tax bracket and when you have less hours, you’ll pay taxes based on a lower bracket, but once you file your taxes you should get a refund because you will have paid too much taxes during the year. In my 4 years of university I got about $1000 in refunds each year because I paid too much tax. I never used my tuition tax credits, so that wasn’t the reason.

      • Jon

        Haha, Thank you.

        I did come into terms with the tax bracket though, I figured better to know now then in the future when I have a full time position. Oh wells, such is life I guess, just gotta start my own business and tax deductions, haha.

        I remember the days when I didn’t even have to worry about what bracket I was in, haha.

    • I

      You won’t get taxed until you’ve made over $10 320

  • lloyds

    I wonder what the effect will be on your tax bracket table if the conservatives get around to implementing their income splitting idea.

    or was that just a carrot?

    • jenn

      Well…individuals have been able to “income split” for a long time now. This is not a “new” idea. High income earners have always been able to split their income between themselves and their spouses to put themselves in a lower tax bracket. If you’re really smart, you can also incorporate your profession. This is a wonderful new tax savings mechanism – a doctor, for example, who earns (for the sake of this example) $300,000 – can declare this as “gross” income to the corporation, and allot themselves a salary FROM that money (say, $50,000, to put them in a very low tax bracket) – all the other money just goes into the corporation and is available to be spent! Beautiful way to avoid taxes!!

  • Guy

    Thanks for the simple explanation!

    I understand people loathe taxes, but understand that taxes build infrastructure, provide education, health care and many services we take for granted. We need taxes to build roads, provide public transportation, teach our kids, heal our sick, etc.

    That being said, could are tax money be spent more efficiently? Of course. But developing the solution is no doubt, very complicated.

    I am extremely grateful to live in Canada – believe me when I say this, we have it really good. If you measure how we’re taxed versus what services we get, I bet we fare very well compared to other countries.

    Now if the Leafs could win the cup….

    • grokcore

      I don’t take any of it for granted but I also know that 

  • jkro

    I am trying to figure out if it’s worthwhile to take on a part-time job. My current salary is before taxes is $76,000. The part-time job before taxes would be about $4,500. This would push my salary to 80,500 and into a higher tax bracket. Any comments would be great. Thx.

    • Preet

      @jkro Well, if you use Ernst and Young’s tax calculator you’ll see that $76,000 before tax is roughly $58,638 after taxes of $17,632. $80,500 before tax is roughly $61,460 after taxes of $19,040. So earning another $4,500 nets you an additional $1,408 $2,822. There are certain assumptions in the calculator and what credits and deductions you have will affect these numbers (based on Ontario rates), but hopefully that gives you some food for thought.

      http://www.ey.com/CA/en/Services/Tax/Tax-Calculators-2011-Personal-Tax

      • Jer

        @Preet@jkro Um, someone’s basic math is wrong. The difference between 61460 and 58638 isn’t an additional 1408, it’s an additional 2822.

        jkro, you don’t get ‘pushed up’ into another tax bracket – it’s only the income that is above 80963 that is taxed at the higher rate.

      • Preet

        @jkro Correct, my numbers were transposed wrong, I just double checked and what you have is right. I’m going to amend my response above. Thanks Jer.

    • JustinVN

      @jkro There is never a scenario in which a higher salary actually nets you less money after tax. You’re only taxed the higher percentage on the amount above the bracket. If your salary moves from $76,000 to $80,500 then you’re paying the same tax that you originally were on the first $76,000. On top of that, you’re earning $4,500 taxed at 39.41%. So you have to ask yourself – is the part-time job worth a net income of roughly $2,700 after tax? You’re not losing any money, you’re just not earning as much as somebody else could have if they also took on that $4,500 part time job.

  • coreymattatall

    what is the most i can make in new brunswick and get all my taxex back

  • I

    Apparently, the poor guys in the $12 270 – $15 658 range have to pay more than everyone else making less than $40 727. =P

  • AdeoluSanyaolu

    Ok assuming with your tax calculation someone making $130,000 goes home with Net of about 88k.   Now remember that in this 88k the person still have to pay additional 13% on every cent you spend afterwards in Ontario.  That leaves him $77,281.23 eventually.
     
    So basically Total Tax Bill / $130,000 Total Income = 31.67% Average Tax Rate + 13%HST  making it a Total Combine tax of  rate of 44.67%    Then you will need to add property tax on the balance Net you have.  So clearly Govt is collecting way more than 50% of your income at anytime giving.
     
     

  • tax payer

    i think it is disgusting how much money you pay to the gov’t, i think canada should be ashamed of them selves
      isent the income tax supposed to be a temporary tax??? brouht out for the war! why are we still paying, and on that note why so much!!?  is it fair that the honest working citezens have to go out and work hard everyday, and at the end of the year get penalized for doing a good job! thanks canada or mainly manitoba not sure how it is every were else but it is not right,

  • The Tax Man

    Hi I’m the tax man. There seems to be alot of people on this site calling me and the government theifs. Do you know what we do with your tax dollars? Canada has one of the best educational systems in the world. We have safe roads, safety nets for those who lose their jobs. An armed forces to provide peace and security. Air travel that is safe. An economic system that is strong and confident. A health care system that is open to all regardless of race, sex, type of illness. Public parks, fresh air, clean cities. After you live somewhere else, you will see what this nation has in relationship to others, (Our north still needs some work). This all cost money, money that is collected through our tax system. Some may say our taxes are too high. Well, we can always go to a more privitized system, one where you have to pay a toll to use the roads, a large hospital bill after giving birth, or a tution bill for sending your 7 year old to grade 3.

    • The Tax Man

      As you can see, my private education was not as good as Canada’s public one. All those tax dollars I saved were spend on my TUITION bill, not my tution bill. Oh well, I should have paid more in taxes!

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