Quote:
Originally Posted by CRS
This likely isn't correct. Canada has a tiered tax system. You're correct in saying that those making more are taxed more (as they progress through the higher brackets) but this doesn't mean that they bring home the same (or less) money.
In fact, with the tiered tax bracket:
15% on the first $48,535 of taxable income, plus
20.5% on the next $48,534 of taxable income (on the portion of taxable income over $48,535 up to $97,069), plus
26% on the next $53,404 of taxable income (on the portion of taxable income over $97,069 up to $150,473), plus
29% on the next $63,895 of taxable income (on the portion of taxable income over $150,473 up to $214,368), plus
33% of taxable income over $214,368
This means that your buddy could be making another at least 50k with the same percentage of taxes taken. The money they make doing OT (at 1.5x or more?) going only to taxes is one of the most fundamentally incorrect statements that a lot of people make without actually looking into where it goes. This is like how people used to say you only use 10% of your brain and that is also fundamentally incorrect but it's catchy and sounds sort of believeable.
I would argue that the first 55k-ish is the most taxed as you have to pay EI/CPP contributions from that and they stop after you hit the max annual amount.
|
That's just the federal tax
You also have to pay at provincial level too. here's the BC provincial tax rate
5.06% on the first $40,707 of taxable income, +
7.7% on the next $40,709, +
10.5% on the next $12,060, +
12.29% on the next $20,030, +
14.7% on the next $40,394, +
16.8% on the amount over $153,900
so technically if one's salary is making > $154k, his marginal tax rate is going to be 45.8%.
One can argue, yes he still earns more in his pocket, but half of his incoming earnings will be taxed nearly half.
and I think that's what "his friend" was talking about instead