Residents in Canada must pay both federal and provincial income tax.
- Federal income tax rates range from 15.5% to 29%, which
is usually deducted at source. Canada's federal government had the
following tax brackets for the 2006 tax year:
- 15.5% up to $36,378
- 22% from $36,378.01 to $72,756
- 26% from $72,756.01 to $118,285
- 29% above $118,28
Most tax credits (including the basic personal amount of $9,039) are credited
at the lowest tax rate of 15.5%, as opposed to the filer's marginal tax
rate.
- Each province adds their own tax on top of the federal tax. Provincial
income tax rates depend on the province and are calculated
on the percentages of federal income tax payable and range from around 42
to 70%.
Returns must be filed for provincial income tax. There are credits and deductions
for both federal and provincial income tax.
Social security (called social insurance in Canada) contributions are compulsory
for most Canadian residents and are deducted from your gross monthly salary.
On earnings above C$3,500 a year the employee pays 3.5%
towards social security for benefits.
More information: http://www.cra-arc.gc.ca