Happy Tax Season! A lot of people these days use one of the many software options for filing taxes. This definitely makes it easier, but sometimes it's nice to know what exactly is going on with your money.
I put together this little chart to help show friends and family how much they are paying in tax. Like other places, Canada has a progressive tax system where you pay more tax is paid on the larger dollar amounts you earn.
For example, on the chart you'll notice that the first $36,145 you make will be taxed at 20.06 percent (15% + 5.06%). Every dollar you earn over that will be taxed at 22.7 percent (15% + 7.7%). (Note the provincial tax amounts here are for BC. Check this CRA page for all Provincial rates).
If this is news to you, there are a couple of things to learn from this. One is, the very high income earners in Canada pay a lot of tax (nearly 45% on their income above $127K) and if you find yourself making over $71K, the amount of tax you save from contributing to your RRSP goes up and up...
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