Tribleedinumph

Hi Guys,

OH has just had first wage slip and tax deductions are huge!. Is it right, as have used the CRA website to double check, that over half your income is deducted in Tax, EI & CPP would seem 48% is take home (Ontario is district) This could be a show stopper for us

Had a earlier thread asking what would be deductions and general consensus and our calculations were approx $5.000 net per month on 100k per annum gross!

This may also help others who are trying to crunch numbers.

Yve.

Alan2005

EI is front loaded; not sure how that works for getting your first wage slip in December though.

iaink

50% on 100k gross is too high. Talk to your HR people.

30% would be closer as a default level.

Tribleedinumph

Do you mean by that you pay all up front at beginning of financial year?

iaink

Typically you pay a set percentage every pay until you max out the $840 maximum EI annual payment sometime in the middle of the year. CPP works the same to the ~ $2300 limit.

I wouldnt expect it to be the cause of your discrepancy...


If memory serves CPP is about 5% and EI about 2% until you max out the annual limits...

curleytops

Was there any overtime worked on this pay period? This can have a big impact on the amount of tax deducted as you are taxed as if you were earning the extra amount all the time. I know people working well paying jobs ie at OPG who watch how much O/T they work because there's no longer any incentive to do so - such a large percentage of it goes to the tax man. It can result in a nice big refund cheque after you've filed your tax return in the spring but it doesn't do you much good at the moment. This may not apply to your case but its a common cause of "sticker shock" when you get your take home pay. I would also check and make sure your employer has assigned you the correct deduction code for appropriate number of dependents etc. as well.

R I C H

My net varies by as much as 10% at the start of the tax year and from September onwards.

Early in the year, I net c60%, later c70%.

iaink

Overtime may automatically get taxed at your marginal tax rate, because they are not smart enough to account for the fact you havent worked and been paying tax for the last 11 months.

Even then the marginal rate on every dollar between $87,123 up to $135,054 is still only about 43%, and it would only apply to the overtime...

Something here seems screwy, check with HR. a 50% marginal rate only applies once you are taking home half a million a year... and at that point you can hire a smart accountant to hide most of it I expect...

Tribleedinumph

No, no overtime worked and sorry I may have mislead with my percentage figures, the over 50% included CPP and EI. The total tax deducions seem to be about 48%.

But aside still seems to be high. Will get OH to check with HR.

geedee

We're used to it, and worse, in Quebec

clay

i get the same shock every week.. rip off.... everything is more expensive here but you earn less money after stoppages... lol.. living the dream..ha ha..

Alan2005

Is it not on your payslip? All my deductions are itemized; something which I assume is a) normal and b) the law.

Tribleedinumph

Yes it is, but rounds out at approx $1000 per month less than we had worked it out to be.

Alan2005

Ok, so what number is $1000 bigger than you expected?

You could use this:
http://www.taxtips.ca/calculators/taxcalculator.htm

orly

Sounds a bit high. My effective tax rate is about 18% in Ontario but granted I don't earn close to $100k a year.

My understanding is that it's fairly similar to the UK tax rates until you get above average income. Then it seems like it should be lower than the UK (no 40% or 50% bands here as far as I'm aware).