Canadian Income Tax Calculator 2008

Find out how much 2008 income tax you owe in Canada in one easy step.

See our new 2011 income tax calculator

31 Comments

  1. […] Ontario (CA), February 13, 2008 – The first online 2008 Canadian Income Tax Calculator  was released today. This tool incorporates all tax rates for all 13 provinces of […]

  2. Wilfred J Pelletier CMA CFP 03/07/2008 at 9:30 am

    This calculator is very good BUT …
    IT DOES NOT SHOW A RESULT FOR ELIGIBLE DIVIDENDS !!

    (In other words it does not show the dividend marginal rate of tax for dividends received from PUBLIC companies (called
    “eligible dividends” )

    Please consider modifying your program ….then I can rate it 5 out of 5 !! (I now rate it 3 out of 5 because of the omission !!)

  3. Thomas Rajan 03/07/2008 at 8:31 pm

    Does this include EI and CPP payable?

  4. admin 03/10/2008 at 4:36 pm

    Hello Thomas,

    I’m afraid this chart does not include EI and CPP payable as they are variable dependent on situation.

    Generally, you will get all of your EI refunded if you are self-employed for example.

  5. Wilfred J Pelletier CMA CFP 03/10/2008 at 5:09 pm

    Please refer to my previous query – re “eligible dividends” .

    Will I get a response? Thank you.

  6. Confused 03/13/2008 at 11:13 pm

    Sorry this may seem like a very silly question but its my first time…the section that says tax payable and it gives you a number is that the amount we owe the govt or is that the amount they return to me?

  7. admin 03/14/2008 at 11:32 am

    @ Wilfred J. Pelletier

    Thank you for your astute observations. Eligible dividends should be included and will be by next week. We sincerely apologise for any inconvenience our oversight has caused you.

    @ confused thought

    Unfortunately, this is what we owe the government. They get a good hunk of our income. Our neighbours to the south pay less tax. But as Canadians, we have better schools and roads and a far smaller proportion of our population in prisons. Not to mention universal health care. Roads, hospitals and schools cost money but save prisons and save lives. I’d be interested to see an economic analysis: in the end, I think they save money by reducing the costs of incarceration and an overwhelmed justice system.

    Paying more taxes likely gives most of us better lives. We do have to keep a close eye on those politicians though. Our tax money should be spent on the hospitals, roads and schools and not on politico junkets or backroom government subsidies to party supporters.

  8. Victor 03/14/2008 at 12:20 pm

    Hi there

    I was quite surprised and pleased with the calculator you made. It’s even more surprising the first of its kind was out in 2008, right when I needed one!

    My question concerns businesses. Does the income tax required vary for unincorporated individuals? I run a franchise and am the sole employer and operator in the company. Thanks for any advice!

  9. LSM Insurance 03/14/2008 at 12:23 pm

    Hello Victor,

    Whether you are incorporated or not should not affect the taxes you pay on personal income. An incorporated individual does have more complex decisions to make regarding whether or not he wants to declare certain expenses as part of business costs or personal costs for business.

    As a sole employer and operator, your tax situation is much simpler. Do consult a professional though – as a business owner it’s too expensive not to take professional tax advice.

    If you’re a business owner with dependents – you should definitely look into a life insurance plan to protect your family and depending on the policy it can generate a tax sheltered cash value. Feel free to call me at 905 248 4849 if you have any other questions.

    Good luck with your franchise!

  10. admin 03/14/2008 at 3:38 pm

    Hello Wilfred,

    We’ve updated the tax calculator as per your suggestion to include Eligible Dividends.

    Good suggestion. Please let us know if you notice any error with our math for eligible dividends. We based on our numbers on Revenue Canada’s own website.

    Cordial regards, Lorne

  11. John 03/15/2008 at 4:54 am

    is this both provincial and federal, or just one.

  12. admin 03/15/2008 at 2:38 pm

    Hello John,

    This calculator covers both provincial and federal tax. Depending on your situation, you would be eligible for additional deductions. This calculator gives you your maximum legal liability to Revenue Canada and your province on your income.

  13. Brenda 04/11/2008 at 11:09 pm

    What is the difference between avg tax rate and marginal tax rate?

  14. LSM Insurance 04/12/2008 at 3:34 pm

    My response – your average tax rate is overall average amount of tax you pay on your total income; whereas your marginal tax rate is the amount of tax your pay on your next dollar of earned income. I hope that helps.

  15. Jean 04/30/2008 at 12:38 pm

    Hi,
    I found this very usefull.
    I have moved from province to province over the years and I found it interesting to see how much tax difference there is from province to province.

    My salary changes from year to year. Since you already have all the data from previous tax years, I would have found it very usefull to have a comparative amount of tax, say another column for 2007.

    All around, you’ve designed a quick and powerfull tool.

    J

  16. LSM Insurance 04/30/2008 at 12:47 pm

    Thanks for the kind words. I appreciate your suggestion. All the best! Lorne

  17. S M Sandler 06/27/2008 at 12:11 pm

    This is an excellent tool. However, it does not take into consideration all the additional payroll deductions that are taken every pay period. That would be a helpful additional piece of information.

  18. LSM Insurance 06/27/2008 at 12:26 pm

    Thanks for the note and the advice. We’re always looking to improve the site. Lorne

  19. allen walker 07/23/2008 at 1:36 pm

    To whom it may concern:

    When I use the Canadian income tax calculator for 2008, it informs me that the Alberta tax payable will be $10,291. However, when I use Canada Revenue’s income tax rate chart it shows that for the first $37,885 the tax would be 15% or $5682, and for the balance of approx. $12,000 @ 22% the tax payable would be $2600 for a total of approx $8347.

    Then when I consult the Alberta provincial tax rate, which is a flat 10% of the taxable rate, it appears that the tax would be about $4600.

    Can you explain the discrepancy? Naturally, I prefer the income tax calculator figure of $10,291, but I want to be very sure that that figure is the correct one.

  20. LSM Insurance 07/23/2008 at 8:15 pm

    In response to Allen Walker’s question (sorry for the delay – I referred it to one of the tax specialist we work with), here is the info:

    1. When I went to your site, the income tax for $46,000 in Alberta showed $9,011 according to the calculator. For an income of $49,885 it was $10,255. Was the person misreading the chart?
    2. It appears that the person did not deduct the basic personal tax credit from his/her tax calculation. Federal deduction for 2008 is $1440 and the Alberta deduction is $1616. This credit applies to everyone.
    3. When discussing the federal tax, the income used appeared to be $49,885 ($37,885 + $12,000). When discussing the Alberta tax, the person suggested the 10% tax to be $4600 which would make the gross income $46,000. What was the gross income actually used on your calculator?

    I did the manual calculations using a gross income of $46,000 and the combined Federal and Alberta taxes payable (with only the basic personal tax credit) and the taxes due would be $9,012; for $49,885, the taxes due would be $10,255. As per your calculator.

  21. Adir 07/24/2008 at 8:56 am

    Can you explain the how the concept of marginal tax rates works. Thank you for your help! A.L

  22. Richard Parkinson 07/24/2008 at 10:08 am

    This calculator is not meant to be the definitive tax calculator, and it is important to remember that it is generating anwerds based on your taxable income, i.e. after all deductions, etc. have been taken into account.

    Personally I use it primarily for determining the marginal tax rate, which I then use to determine the tax consequences of new investments, especially if considering a GIC where 100% of the gain is taxable, vs. an equity investment where the gain is 100% capital gain, on which only 50% is taxable.

  23. Yamini 02/23/2009 at 2:14 pm

    Hi,

    This is a great tool. It makes it so much easier to get an idea of how our income bracket makes a difference on our income tax. It helped me get an idea of how much RRSP contribution is optimal for my income tax bracket.

    Thanks for this great tool!

    Yamini

  24. LSM Insurance 02/23/2009 at 4:59 pm

    Hi Yamini,

    Thanks for the note. I’m glad you found the calculator useful and I appreciate the kind words.

    Regards … Lorne

  25. Derek 02/24/2009 at 3:12 pm

    In regards to Yamini, which column would you use to determine or atleast get an idea of your RRSP contribution ? would you take your taxable income and multiply it by your marginal rate on ineligible dividends ?

  26. Faraz 06/04/2009 at 12:32 am

    Hi, This is a great calculator !!
    For a person who does not have a regular income (eg. it’s only from capital gains), this calculator shows that the marginal tax rate on the capital gains is zero. I entered $9000 as my taxable income and it says i don’t owe any money to the government which makes sense and it says that my marginal rates for capital gains and ineligible dividends are both zero..!! is that true?

  27. LSM Insurance 06/04/2009 at 1:19 pm

    Thanks Faraz!

    You are correct for a taxable income of $9,000. However using BC as an example, their Basic Personal Exemption is $9,323. So any amount over that amount will be taxable. Once the income is over $10,320 the taxable income is based on both the federal and provincial rates, minus the basic personal exemptions.

    Regards …

  28. hanan aboueleinein 07/26/2009 at 7:13 pm

    I am a new comer to Toronto on july 2008 I am not working and I still searching inspit that I have PHD degree in Law , I wounder if I have to present any income tax statement for the year 2008 .

  29. Richard Parkinson 07/27/2009 at 9:04 am

    Thanks for asking this question. This question is one of those that many people ask from time to time, and worth a refresher. Fortunately the CRA website is always a good source of answers to these questions. The answer to your question can be found at: link to cra-arc.gc.ca.

    This site summarizes when you need to file a return:
    Do you have to file a return? You have to file a return for 2008 if any of the following situations apply:

    •You have to pay tax for 2008.
    •We sent you a request to file a return.
    •You and your spouse or common-law partner elected to split pension income for 2008. See line 115 – Other pensions or superannuation, and line 129 – RRSP income, for details.
    •You received Working Income Tax Benefit (WITB) advance payments in 2008, and you want to apply for WITB advance payments for 2009.
    •You disposed of capital property in 2008 (for example, if you sold real estate or shares) or you realized a taxable capital gain (for example, if a mutual fund or trust attributed amounts to you, or you are reporting a capital gains reserve you claimed on your 2007 return).
    •You have to repay any of your Old Age Security or Employment Insurance benefits. See line 235 – Social benefits repayment, for details.
    •You have not repaid all of the amounts you withdrew from your registered retirement savings plan (RRSP) under the Home Buyers’ Plan or the Lifelong Learning Plan. For details, see Guide RC4135 – Home Buyers’ Plan (HBP) or Guide RC4112 – Lifelong Learning Plan (LLP).
    •You have to contribute to the Canada Pension Plan (CPP). This can apply if, for 2008, the total of your net self-employment income and pensionable employment income is more than $3,500. See line 222 – Deduction for CPP or QPP contributions on self-employment and other earnings.
    Even if none of these requirements apply, you may still want to file a return to receive certain benefits and credits. See Benefits of filing a return.

    Benefits of filing a return You may want to file a return if any of the following applies to you:

    •You want to claim a refund.
    •You received Working Income Tax Benefit (WITB) advance payments in 2008, and you want to apply for WITB advance payments for 2009.
    •You want to apply for the GST/HST credit. For example, you may be eligible if you turn 19 before April 2010.
    •You or your spouse or common-law partner want to begin or continue receiving Canada Child Tax Benefit payments.
    •You have incurred a non-capital loss (see line 236) in 2008 that you want to be able to apply in other years.
    •You want to carry forward or transfer the unused portion of your tuition, education, and textbook amounts (see line 323 and line 324).
    •You want to report income for which you could contribute to an RRSP, in order to keep your RRSP deduction limit for future years up to date.
    •You want to carry forward the unused investment tax credit on expenditures you incurred during the current year (see line 412).
    •You receive the Guaranteed Income Supplement or Allowance benefits under the Old Age Security Program. You can usually renew your benefit simply by filing your return by April 30. If you choose not to file a return, you will have to complete a renewal application form. This form is available from the Service Canada website.

    This is probably a longer answer that you were looking for, but it is an opportunity to highlight when you need to file, and when it may be opportune to file.

  30. Patsy 02/10/2011 at 1:22 pm

    Hi,

    I have not done my income tax since 2007.

    I receive ODSP only.

    Should I file my income tax and why?

    Thank you.

  31. Hi Patsy,

    Even though you may have non-taxable income such as ODSP, it is a good practise to file your tax return every year as you are eligible for refundable tax credits.

    Being a resident of Ontario, you are eligible to apply for the GST Rebate and the Ontario Sales Tax/Rent Credit for the years up to 2009 and the HST Rebate and Ontario Tax Credit for 2010. Conservative estimating approximately $1000.

    I hope this has answered your question.

    Regards,
    Storoszko & Associates
    Tax Specialists
    http://www.storoszko.net
    Tel: 647 367-3477

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