Canadian Employment Taxes

[FinPro]

Hello Everyone,

I believe it is important for every one immigrating to Canada to know about the taxes one is going to pay from one's pay check. It might be one of the factors which may decide where one wanna settle. These are only Employment taxes, there will be additional taxes and the overall picture may change once u add those taxes. Therefore, more research is advisable.

For Employment taxes, a summary of Fed Tax and of Proivinces of AB, BC & ON is given. For more details, a link is given at the end of the post. Rates are valid for 2006.

Federal Tax Rate ( Common for all provinces):
15.25% on the first $36,378 of taxable income;
22% on the next $36,378 of taxable income;
26% on the next $45,529 of taxable income; and
29% of taxable income over $118,285.
+

CPP (Canadian Pension Plan - Fed Tax): 4.95%
+
Employment Insurance: $1.87 for every $100

Provincial Taxes:
Ontario
6.05% on the first $34,758 of taxable income, +
9.15% on the next $34,759, +
11.16% on the amount over $69,517

British Columbia
6.05% on the first $33,755 of taxable income, +
9.15% on the next $33,756, +
11.7% on the next $10,000, +
13.7% on the next $16,610, +
14.7% on the amount over $94,121

Alberta10% of taxable income - One Flat rate.

For more details please check the following link:

http://www.cra-arc.gc.ca/tax/allrates/menu-e.html

Regards
FinPro

[antonyall]

FinPro

FinPro thanks so much for that post because it is a great advisory to many planning to migrate to canada. When i lived in the US I paid about 18% Federal taxes and another 6% in state and roughly 5% on the pension plan. Of course this did not seem too exhorbitant to me being that as a single person i made over 40k per annum. Health insurance was another cost and it came up to about $35 per $1000, which I do not consider unreasonable at all.

The outlook on Canada appears very expensive as first glance but a s i have noted before, through empirical evidence collected by me, it appears that the payoff for Canada lies in a superior healthcare package over TIME, especially during retirement. The figures you included are rather alarming but Ill tell ya another something...coming from a third world nation, Canada still seems a haven for a great life.
Great post FinPro and thanks ever so much!

[FinPro]

HI Antony,

I agree figures do look alarming and for me working in a tax free state, it is even bigger hurdle but as u said earlier the benefits we ll reap in the future.

Also as I mentioned in my original post, you have to look for other factors also to find out the complete cost of living. These costs may change the overall picture. Since these changes from Province to province, it is difficult to sum up here. But still this info can give us a starting point.

[antonyall]

Not that bad actually

It really is a multi elemented factor Finpro and as you said many things have to be considered. I have always feared the bigtime "Canadian tax structure" thinking that the rates are way too high, but after living in the USA for 18 years and paying both state and federal taxes there, Canada certainly seems higher by about 9%. But when i considered the wage structure, health benefits, country cleanliness,great behavior of the people and I have seen many 2/2 homes in the smaller towns at under $120,000, I seem to have actually warmed up to life in Canada. I have approximately three aunts and a whole bunch of cousins who have lived there all their lives, 70 years or so, and they love the life there. I am amazed that even the cold does not bother them as they have weekly get togethers of massive proportions. So although most of us are flavored by the American lifestyle, it surely is a fact that Canada offers the same if not more, of the many benefits to be reaped from a life within a beautiful country.