Canada income taxes
How to Calculate Federal Income Tax in Canada for 2007
1) When taxable income is less than $37,178: Tax rate for this tax group is 15%. So if someones earning is falling in this group then tax payable will be 15% of the taxable income i.e. 0.15*taxable income.
2) When taxable income is more than $37,178 and not more than $ 74,357: In this case there will be two rates. For first $37,178 tax will be @15% i.e. $5,577. For second part one has to deduct $37,178 from total taxable income and then calculate rest tax part by getting 22% of the resulting amount. So,
Total Tax Payable = $5,577 + $ (Total Taxable Income - 37,178) *22/100.
3) When taxable income is more than $ 74,357 and not more than $ 120,887: In this case tax will be calculated in three parts, first part will result in $5,577, second part will be equal to 22% of $ (74,357 37,178) i.e. $ 8,179.38. The third part will be equal to 26% of amount in excess of $ 120,887. Therefore,
Total Tax Payable = $13,756 + $ (Total Taxable Income 74,357)*26/100.
4) When taxable income is more than $ 120,887: In this case 4 rates will be applicable. For first $37,178 rate will be 15% resulting in $ 5,577, for next $ 37,179 tax rate will be 22% resulting in $ 8,179, for next $ 46,530 rate will be 26% resulting in $12,098 and for rest of the taxable income rate will be 29%. In other words,
Total Tax Payable= $ 25,854 + (Total Taxable Income 120,887)*29/100.
Under the current tax on income method, tax for all provinces (except Quebec) and territories is calculated the same way as federal tax. A short list is given as follows:
1) Newfoundland and Labrador: 9.64% on the first $29,886 of taxable income, +14.98% on the next $29,886, + 17.26% on the amount over $59,772.
2) Prince Edward Island: 9.64% on the first $29,886 of taxable income, +14.98% on the next $29,886, +17.26% on the amount over $59,772
3) Nova Scotia : 8.79% on the first $29,590 of taxable income, +14.95% on the next $29,590, +16.67% on the next $33,820 +17.5% on the amount over $93,000
4) New Brunswick: 10.12% on the first $34,186 of taxable income, +15.48% on the next $34,188, +16.8% on the next $42,787, +17.95% on the amount over $111,161
5) Ontario: 6.05% on the first
$35,488 of taxable income, +
9.15% on the next $35,488, +11.16% on the amount over $70,976
6) Manitoba: 10.9% on the first
$30,544 of taxable income, +
13% on the next $34,456, +17.4% on the amount over $65,000
7) Saskatchewan: 11% on the first $38,405 of taxable income, +13% on the next $71,324, +15% on the amount ver $109,729
8) Alberta: 10% of taxable income
9) British Columbia: 5.7% on the first $34,397 of taxable income, + 8.65% on the next $34,397, +11.1% on the next $10,190, +13% on the next $16,925, +14.7% on the amount over $95,909
10) Yukon: 7.04% on the first $37,178 of taxable income, +9.68% on the next $37,179, +11.44% on the next $46,530, +12.76% on the amount over $120,887
11) Northwest Territories: 5.9% on the first $35,315 of taxable income, +8.6% on the next $35,316, +12.2% on the next $44,199, +14.05% on the amount over $114,830
12) Nunavut: 4% on the first
$37,178 of taxable income, +7% on the next $37,179, +9% on the next $46,530, +
11.5% on the amount over $120,887
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