![]() ![]() Let's start with the federal tax brackets… To help better understand how it all works, see below for a visual guide to Canadian tax brackets and their corresponding marginal tax rates for 2022.Ĭanadians pay both federal and provincial taxes, each of which have their own tax brackets and corresponding marginal tax rates. There's a lot of jargon and numbers when talking about taxes. Each tax bracket or section of your income is taxed at its own unique tax rate, and the tax bracket for each section of income increases for each additional amount of income you earn over the previous bracket Where things can get confusing is the fact that your entire income isn't taxed at a single tax rate.Ĭanada has what's known as a marginal tax rate system, which means your income is divided into different sections (called tax brackets). To calculate a rough estimate of how much you might have to pay in income tax (without reference to any credits or deductions that would be unique to you), start by taking your average tax rate – which is the amount calculated by taking the total of the provincial and federal tax you paid for the year to the government – divided by your annual income for that year. In Canada, the federal government calculates how much income tax you should be paying based on the amount of income you earn. Understanding how your income is taxed is an important part of setting financial goals. If you live and work in Canada, you need to file a personal income tax return every year. To better know how much of your money is truly yours to save, spend and invest, you first need to get a good approximation about how much you could have to pay in income tax each year. ![]() When it comes to setting financial goals, it's not enough to know how much money you earn. To view the CRA's updated table for Canadian tax brackets and corresponding marginal tax rates for the 2023 tax year, please visit the CRA website here Editor's Note: The following story contains information about Canadian tax brackets and their corresponding marginal tax rates accurate for the 2022 tax year, which is the return that Canadians are generally required to file with the Canada Revenue Agency (CRA) by Ap(extended to the next business day as April 30 falls on a Sunday). ![]()
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