There are big savings for filing on time even if you can’t pay all your taxes right away.
If you would like to know the income tax for 2012, 2011, 2010 see our 2012 income tax calculator, 2011 income tax calculator, 2010 income tax calculator, or go back to 2013 income tax calculator.
Don’t forget to file your taxes on time. There are big savings by filing on time, even if you can’t pay all your taxes right away.
These calculations do not include non-refundable tax credits other than the basic personal tax credit.
These rates give you a basic of idea of how much tax you should pay, but depending on your employment and business and personal circumstances you could pay a lot less. Be sure to visit a competent tax advisor before filing your return.
* Eligible Dividends are dividends from a Canadian corporation on which corporate tax has already been paid. Normally the dividend issuer will alert you to the eligibility of a given dividend. All other Canadian dividends are considered Ineligible Dividends. Non-Canadian Dividends do not qualify for the dividend tax credit. They are simply treated as income.
Hi Janelle,
Technically, you ar correct that you would not be tax payable for those years, as any income over $10,000 is taxable.
But paying taxes is not the only reason for filing a tax return. By filing a tax return, even though you do not have taxable income or any income entitles you to file for tax credits and benefits.
For example in Ontario, you could have transferred your tuition and books credit to your mom to reduce her taxes. You could also have applied for a rebate of the Ontario Retail Sales Tax you paid and also the GST rebate.
By not filing your tax return for 2008, 2009, 2010 you may have missed out on collecting approximately $1,000 in rebates.
Also by reporting your income on your tax return, no matter how little also allows you to build up tax credit room for an RSP.
I hope this has answered your question.
Regards,
Storoszko & Associates
Tax Specialists
https://www.storoszko.net
Tel: 647 367-3477
Hi there. I’m a 19 year old college student in ontario I live with just my mother and 5 year old sister. I didn’t file my taxes when I had my first job from 08 to 09 I made about 7000 $ and still haven’t filed. The calculator shows 0$ when I enter this in so does that mean I don’t owe fedreal tax money for those years?
Hi Eric,
The purpose of filing a tax return is not only to report taxable income, but to also apply for tax credits and benefits.
To answer your question: $25.
By filing your tax return you also apply for GST rebates, provincial tax rebates, and other tax benefits.
I hope this has answered your question.
Regards,
Storoszko & Associates
Tax Specialists
https://www.storoszko.net
Tel: 647 367-3477
whats the minimum amount of income you can make , before you have to file income taxes in Canada.
Hi Marcus,
Based on the information you provided (you did not indicate if the private insurance benefit is taxable or tax-free, or your disability status, etc.), you may be eligible to obtain and claim the Disability Tax Credit which will provide you with tax credits for tax savings.
If you qualify for the Disability tax Credit, I suggest you contact a tax specialist to review your tax savings.
I hope this has answered your question.
Regards,
Storoszko & Associates
Tax Specialists
https://www.storoszko.net
Tel: 647 367-3477
I have private insurance due to a disability and am wondering if you could give me some suggestions with respects to deductions in assisting me in not paying so much tax on the amount. RRSp’s unfortunately cannot be included this year. Are there any other possible deductions I can take advantage off? Thank you
This calculator shows that NWT has lower taxes than ON, however I suspect cost of living in NWT is higher so it probably balances out, i.e. it looks life ON gasoline is 15-20 cents less than in NWT.
Your best bet is to create your own spreadsheet using the tax tables from the CRA – https://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html
For 2010 the RRSP contribution limit is $22,000 or 18% of your income, but you also may have some spare contribution room.
It will be a matter of playing with the numbers to determine the right amount of RRSP contribution each year to minimize your tax payable.
Remember this calculator only considers your basic personal exemption which is $10,382 federally, $12,740 in NWT and $8,943 in Ontario. This difference on provinceial rate is a major influence on why Ontario’s tax rate is higher than NWT.
I want to move to Ontario in July. I have the option to stay north (NWT) I make 100K which place will offer the best deductions to get money back. I also want to know how much RRSP I need to stay in the black. If I move to Ontario I will communite to/from the north.
Here are hopefully the answers you were seeking.
1. Yes, the calculator calculates the tax based on your input number, then subtracts the Basic Personal Amount (BPA) as we better know as our personal exemption. Therefore, given that most people will have additional deductions and credits, consider this number a worst case scenario.
2. The answer to the question, “do I pay myself salary or dividends”, or in what proportions is not clear cut.
For the sake of simplicity we will
• ignore GST issues
• assume that the corporation is located in Ontario and the owner resides in Ontario
• assume that the corporation qualifies for the small business deduction
For our purposes, let’s assume the corporation has a net income of $100,000 dollars available for distribution to the owner, and that he owner has no other sources of income.
Salary:
The corporation pays out its entire net income of $100,000 as salary expense to its shareholder – amount of tax paid by the corporation is $0.00
The shareholder would report income of $97,731 ($100,000 less the company’s contribution to CPP of $2,269) and incur a tax liability of $27,052 – approximately $1,282 more than just dividends.
Dividends:
If the corporation pays a dividend equal to its net after tax profit, it would incur a tax liability of $16,500 (16.5% for 2009) and would, therefore, have $83,500 available for distribution to its shareholder.
The shareholder would report income of $121,075 ($83,500 x 1.45 [gross up]) and would incur, based on 2009 tax rates, a tax liability of approx $9,270, based on an average tax rate of 8%, after the dividend tax credit is included..
Total taxes paid between the corporation and shareholder $25,770.
But also consider the ramifications of doing this:
1. Dividends are not insurable earnings for purposes of future CPP benefits.
2. Dividends are not considered “earned income” for purposes of calculating RRSP contribution limits.
3. Many private insurers do not consider dividends to be insurable for the purposes of obtaining disability insurance.
4. Personal service businesses, e.g. an incorporated individual doing business with only one client, (see https://www.cra-arc.gc.ca/E/pub/tp/it73r6/it73r6-e.html) do not qualify for the small business deduction which would effectively double the amount of corporate income tax payable.
So for 2009, you can earn about $66,000 in dividend income without paying any tax, so advantage dividends. As you can see with $100,000 of income, dividend income is still slightly better, but at the expensive of other things that may not be worth it. Definitely seek the council of a tax professional.
Hi
Great site.
1. Just to confirm, the calculator reduces the net income I put in by the Basic Personal Exemption only.
2. My question is this, How do I determine the maximum to take in T4 salary vs taking CCPC dividends out and paying personal tax and the corporate tax at 16.5%? When I calculate the dividend monies as income (average tax rate) would I still have to add on the 16.5% corporate tax that was already paid on the monies?
I can’t seem to work it out correctly. The T4 income always works out better on the average tax rate???
Thanks
Thanks Chuck! I’m glad you like it.
This is a great online tool ! Well done.
Hi Scott, Thanks for the note – glad to hear things are going well.
Great tool. THis helps me know if im saving enough for my end of the year tax filing 🙂
Looks like I’m doing ok so far! 🙂
Richard – Thanks for sharing!
It interesting that the tax rates vary so widely across the country. There are 13 provinces and territories in Canada today, which for $120,000 Nunavut is the place to live for the lowest tax payable at $31,158, vs. Quebec with the highest at $41,761. Of course there are many influences on a regional basis why there are these rate differences. The federal rates are the same for all thirteen, it is the indivdual provinces and territories that are different. You can find the details at the CRA website: https://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html.
Ontario and BC are in the process of harmonizing their taxes with the federal government, which is going to further influence these rates in the future.
Thanks for the note. Yes different provinces have different tax rates. There are a variety of factors that go into a provinces tax rate. Regards … Lorne
That is an amazing calculator, I input $120,000 as the income and the taxes for BC are $33,896 and taxes for Ontario are $36,719… Why this difference of almost $3000? That’s like $300 a month and is a significant chunk of money from people’s budgets!!
Re question 1, the calculator does not take CPP & EI into account as these are just too many deductions and credits that not everyone is entitled to, that influence what you ultimately pay. Consider the results of this calculator as pessimistic, i.e. the worst case scenario of what you will have to pay.
This calculator only deducts your Basic Personal Exemption from your specified taxable income. Remember the deduction is your province’s percentage of the exemption, not the actual exemption. See my answer to a previous question.
Re question 2, the country you are planning to work in is important as some, like the USA, have tax treaties with Canada while others do not.
The Service Canada website: https://www.hrsdc.gc.ca/eng/isp/cpp/soc/18-29/who.shtml identifies who contributes to CPP. In this page they state:
” Do you plan to work abroad?
If you plan to work abroad, keep your pay stubs and tax slips. Canada currently has agreements with over 40 countries that may make you eligible for social security benefits in Canada and/or the other country.”
For tax purposes, you are considered a resident for tax purposes of the province you are residing in on December 31, of the taxation year. So if you were visiting family in Ontario over Christmas, you would be considered residing in Ontario.
The problem with your questions is there are numerous variables, e.g. the country you plan to work in, the actual number of days you are abroad, i.e. more than 183 days becomes an important influence. You should probably consult with a tax accountant for the full opinion on your situation. You don’t want to find yourself in tax trouble in either Canada, the foreign country, or at worst, both countries.
Years ago I co-owned a Cdn. company with a US branch, based in Washington state. Every year we had to file a US return, and pay Washington state taxes, Social Security, etc. knowing full well, we would never reap the benefits from them. Some countries such as Indonesia have a withholding tax of 20% on all income earned in the country, deducted before you get your deposit.
Hope this helps.
1. Does your calculator take into account CPP and EI contributions as well as OHIP premiums in Ontario?
2. I plan to be out of country for a significant part of the year and work outside of the country.
I intend to rent out my residence but still keep Canadian residency status. All my Canadian status in tact, Ie driver’s licence, bank accounts,address etc. Will be coming back regularly ( every few months). Would I be considered a resident of Ontario for tax purposes. I would have a Canadian income still from other sources. (not government pensions)
Thanks Dennis. I appreciate the kind words.
Love it. Best thing ever to work out different employment option scenarios. Thanks for the service!
Richard – Thanks for your input. Regards …
Thanks for your question. The good news is you missed an important part of calculating the deduction. Just as the tax on your gross is a percentage of it, e.g. the first federal level of tax payable is 15% of $40,726, your deduction is also a percentage. so in your calculation the federal minus is:
15% of 10375 = $1,548.00
7.7% of $7,778 = $ 598.91
Total exemption (BPA) = $2,146.91
If you use the tables from the CRA https://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html#federal you will find that the tax payable on your gross amount before deduction of the Basic Personal Amount(BPA as they call it)is $19,516.80. So the correct math is:
Gross income $68,344
Total Tax Payable: $19,516.80
BPA deduction: $ 2,146.91
Net tax payable: $17,369.90
Net Income: $50,594.10
which agrees the the calculator (round down). Trust me tax calculation is complicated, and it took me many hours of research and Excel time to figure it out. I have compared my calculations with three other sites and we are all in agreement, so I am confident of the math.
Remember your actual tax payable will likely also include deductions for a spouse, children, RRSP contributions, and various other tax credits. The calculation is the worst case scenario for most people, small consolation though.
If I am reading this correctly for my situation:
$68,344 (Gross)
– 10,375 (Fed standard deduction)
– 7,778 (NL standard deduction)
__________________________________
= $50,191 (Taxable Income)
According to this calculator, my after tax income is $39,307. This comes out to 42.5% of my income is lost to taxes. This seems very high. Does this make any sense? Is $39,307 the actual amount of money I will hold in my hands after taxes?
hi, i becane a PR in canada in April 2009, my wife live here and goes to school. I returned to my home country because i have one year more on my contract.
I have a saving of 30,000. and my annual income is 30000.
I would be greatful if u can tell me how much tax i have to pay on my saving and my income.
Thank you
The child care calculator Lorne suggested is an excellent start. Typically people find that after the expenses, especially daycare, are taken into account, plus the loss of the dependent spousal deduction, 75% of the gross income is lost, leaving 25% of real income. Of course it depends on many factors, e.g. the potential income of the employment seeker, and daycare cost. In Quebec daycare is $7 per day, making it more affordable than almost anywhere else.
If you have some basic Excel skills, it can help you do the math as well. Out of interest I Google searched on variations of “wife work or not”, hoping to find an on-line calculator that someone might have developed, but was unsuccessful.
Hi Michel,
This calculator at the attached link should help https://lsminsurance.ca/calculators/canada/child-care
Best Regards … Lorne
Hello,
I earn approximately 70,000 a year before taxes. I have 3 children. My wife is a stay at home mom and we are wondering how much she would have to earn yearly to make things worthwhile. Leaving home will mean less deductions etc
Any comments would be appreciated
If I am a Citizen of Canada and have income from commercial property (rent) in the USA, will I have to pay income tax to both Canada & USA from all income earned?
Hi Samuel,
Thanks for the note the calculator can give you a good estimate but it would depend on your deductions and eligible expenses.
Best Regards …
Hi
I am coming back to Montreal next academic year and will make 85000 as before, but I now have a family of 4, with 2 kids age 1 and 3 and their stay at home mom. What can I anticipate as net income in Quebec?
Many thanks, best
Samuel
Thanks
Hi Bora,
Please see below. Regards … Lorne
Personal income tax returns, except for those of self-employed individuals, are due by April 30th, as is any amount owing. Penalties and interest may be charged for late returns or late payments. The filing due date has been extended to June 1, 2009, for taxpayers affected by flooding in Manitoba. See the news release.
If you are filing online, Canada Revenue Agency (CRA) allows a grace period for taxpayers who may experience delays in submitting their return online. For 2008, taxpayers have until midnight (local time) on Tuesday, May 6 to transmit their return. Any amount owing is still expected to be paid by April 30th to avoid any penalties. See the CRA home page for more information. You can NetFile your tax return online until September 30th, but it will be considered late if filed after the due date.
Self-employed individuals have until June 15th to file their personal tax returns, but any amounts owing must still be paid by April 30th.
Hi,
Could you pls. let me know when is the last date for Income tax return filing in ontario canada.
Thank you.
Hi. I have a question about the CRA Moving Expenses Deduction. Last year I moved for the purpose of obtaining work. With respect to the $8,000 Property Purchase Tax (PTT) payable on the purchase of my new home in BC, I have heard that the CRA has rejected claims for this as a valid deduction. As the CRA’s materials appear to indicate otherwise, including in the description of eligible expenses “any taxes paid (other than GST/HST or property taxes) for the transfer or registration of title to the new residence”, I wondered what experience others have had in claiming this as a deduction?
Hi Anne,
This will depends on your individual situation. We will send you a separate email shortly and we can discuss this in more detail. Regards …
Hi Lorne and Richard,
I was wondering if you could share with me info on how one could maximize gains from sale of equity (most of the time it does not happen these days), held less than a year, when filing my return for 2009. Thus far for the year this has been my sole source of income. Thanks for your help.
I always like to refer to the definitive reference wherever possible, which for tax related questions is the Canada Revenue Agency (CRA).
The quick answer is that under normal conditions, a person files a tax return for the province in which they are residing on December 31 of the taxation year. Sometimes, a person may be considered to be a resident of a province even if they have temporarily relocated to another province. This could happen if the person was employed in a temporary job, or was a student in a province where they do not normally reside. A person will be determined to be resident in the province in which they have the most significant residential ties.
The CRA have published a “General Income Tax & Benefit Guide”, available at:
https://www.cra-arc.gc.ca/formspubs/prioryear/t1/2008/5000-g-2008/5000-g-08e.pdf
This 55 page document is handy to have on hand, as it answers many questions you may have from time to time. In this guide it states:
Which tax package should you use?
Generally, you have to use the package for the province or territory where you resided on December 31, 2008. However, there are exceptions (see next section) such as if you had residential ties (see definition on this page) in another place. You should have received the package you need based on our records.
If you resided in Quebec on December 31, 2008, use the package for residents of Quebec to calculate your federal tax only. You will also need to file a Quebec provincial return.
Residential ties – These ties include where your home (owned or leased) and personal property are, and where your spouse or common-law partner or dependants reside.
Other ties that may be relevant include social ties, driver’s licence, bank accounts or credit cards, and provincial or territorial hospitalization insurance. For more details, see Interpretation Bulletin IT-221, Determination of an Individual’s Residence Status. ( https://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s5/f1/s5-f1-c1-eng.html )
Exceptions
In the following situations, you should use the package indicated:
A. If, on December 31, 2008, you had residential ties (see definition on this page) in more than one province or territory, use the package for the province or territory where you have your most important residential ties.
For example, if you usually reside in Ontario, but were going to school in Alberta or staying in a ski chalet in Quebec, you would use the package for Ontario.
Regarding the “get refund” assuming you file in BC, I don’t know the answer, nor know where to find it quickly. But I would guess that the income earned and taxed at source in Alberta would be lumped in with the BC income, and taxed as if in BC. So you may have paid more tax at source in Alberta, which may give you some small refund. A question life this makes me glad that I am not a software programmer writing the software to calculate taxes.
Sorry I forgot to specifically comment that the fees for notary etc. for a recreational property are not deductible either, but assume you deduced that from my previous answer.
I meant ‘get refund’ in the last question…
I have a question that I wish tax gurus out there can provide some comments. I paid tax in BC and Alberta in 2008 (in AB Dec 31 2008), will CRA calculate my provincial tax using BC tax rate and/or AB rate? (since there is a big difference.) Also, will I get from both BC and AB? Many thanks.
thanks for the info on the transfer tax question…
a great web site
Thanks for sharing Richard.
Regarding the deductibility of the transfer tax in BC.
For those outside of BC, we have a property transfer tax when a property is purchased that is 1% of the first $200,000 and 2% of the remainder. There are more details to it, but a Google search for BC property transfer tax will lead you to more information than you want to know.
The answer is NO, it is not deductible, any more than it is for your principal residence. It is not deductible even for a rental property. However with a rental property it would be added proportionately to the value of the building, which in subsequent years would be included in any Captial Cost Allowance calculation.
While we are on the subject of rental properties, be aware there are rules about what is deductible and what is not. Repairs and maintenance items are, but improvements are not, e.g. replacing all of the windows, or adding a deck, would not be deductible.
Lastly for those who have both a principal residence and a recreational property, there is something called the 1 plus rule that can save some tax on disposition. If someone asks, I can provide some insight.