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Personal Income Tax
Personal Income Tax
Personal – Responsibility(s)
•Who has to Pay Income Tax?
•Why Should I pay Income Tax?
Federal Income Tax
•How Much
•Where does the money go?
•Are There any Exemptions?
Federal Income Tax - Information• https://www.canada.ca/en/services/taxes/income-tax/personal-
income-tax.html
Canadian Revenue Agency (CRA)
Federal Income Tax - Rate• Federal tax rates for 2017
• 15% on the first $45,916 of taxable income, +
• 20.5% on the next $45,915 of taxable income (on the portion of taxable income over $45,916 up to $91,831), +
• 26% on the next $50,522 of taxable income (on the portion of taxable income over $91,831 up to $142,353), +
• 29% on the next $60,447 of taxable income (on the portion of taxable income over $142,353 up to $202,800), +
• 33% of taxable income over $202,800.
Federal Income Tax – Example Calculation
Income $60,000.00
Federal Tax
Step 1 - 15% $45,916.00 $6,887.40
Step 2 - 20.5% $14,084.00 $2,887.22
$9,774.62
16% (Federal Taxes only)
Provincial Income Tax
•How Much
•Where does the money go?
•Are There any Exemptions?
Income Tax - Refund
•How do I get it?
•When will the money arrive?
•Ways to get more?
Provincial Income Tax - Rate
Provincial/territorial tax rates for 2017TAX FOR ALL PROVINCES (EXCEPT QUEBEC) AND TERRITORIES IS CALCULATED THE SAME WAY AS FEDERAL TAX.
FORM 428 IS USED TO CALCULATE THIS PROVINCIAL OR TERRITORIAL TAX. PROVINCIAL OR TERRITORIAL SPECIFIC NON-REFUNDABLE TAX CREDITS ARE ALSO CALCULATED
ON FORM 428.
British Columbia5.06% on the first $38,898 of taxable income, +7.7% on the next $38,899, +10.5% on the next $11,523, +12.29% on the next $19,140, +14.7% on the amount over $108,460
Provincial Income Tax – Example Calculation
Income $60,000.00
Provincial Tax
Step 1 – 5.06% $38,898.00 $1,968.24
Step 2 - 10.5% $21,102.00 $2,215.71
$4,183.95
6.97% (Provincial Taxes only)
Canada Pension Plan (CPP) Contribution Rates
• For 2018 (Maximum Pensionable Earnings)• $55,900 4.95%
• Example: $60,000 at 4.95% $2970.00
EI DeductionsEmployment Insurance (EI)
Annual Maximum Insurable Earnings $51,300.00
Employee Contribution Rate 1.63%
Employer Contribution Rate 2.282%
Annual Maximum Employee Contribution $836.19
Annual Maximum Employer Contribution $1,170.67
Total Calculation• Federal Income Tax: $9,774.62
• Provincial Income Tax: $4,183.95
• CPP: $2,970.00
• EI $836.19
• Total (deductions) $17,764.76
• Income: $60,000 29.60%
Example – Pay Slip
Example – T4 Slip
Example 2 – T4 Slip
Example – Tuition Slip
Filing Your TaxesThings to Pay attention to:
• Due Dates
• Refund/Owing Money
• Slips, Receipts, and Documents
How will you file your taxes
• By Yourself (Paper, Offline Software, Online Software)
• By Accountants ($$$)
• By Professional Income Tax Services
