cllb2

N one seems able to give us a consistent salary estimate where my husband works and it's driving us nuts. We asked them for their own estimate seeing as they are responsible for this stuff. But it seems they can't get their own estimates to match.

Hopefully Jonboy is reading, he's been helping loads!
To recap, the salary will be about 124k assuming a 1.55 conversion from £ to $. Jonboy gave us a great estimate below:

Assuming an exchange rate of 1.55 that is $124,000. That is an average of $3,412 after tax per pay cheque. I stress it is an average. CPP and EI (equivalent to NI) is not collected evenly during the year. You pay a % of your income until you have paid the maximum then it stops. His cheque will be $3,213 for January through May and $3.529 for the rest of the year (approximately).

Other things to consider is if he is paid vacation pay with each cheque or if the company saves it until he takes vacation, and if there are any other deductions such as a contribution to benefits or union dues.

Make your budget assuming he will get two pay cheques a month. Then, twice a year he gets a bonus.

However, this is the latest from HR and it seems wildly out from anything they or anyone else has estimated before. Based on to we simply can't go but we now want so badly to go!

I’ve run some preliminary numbers and this is what we are looking at with the information we have so far. With your salary you will fall under the federal tax requirements of approximately 27% and provincial requirements of approximately 14.5%. Additionally you will have CPP and EI contributions. (Both of these are mandatory). As such, your net annual income will be $67,451. If you have claims for any dependants (spouse/children) this will reduce your tax liability slightly, and increase your net income slightly.

With a net annual income of $67,451 you will receive a bi-weekly income of $2,594.
After 3 months in Vancouver, you will be enrolled in the Provincial health care scheme which is a cost to you of $16 per pay (MPC covers the balance of the cost – employee and employer each pay 50%); and our extended health care benefits which is a cost to you of $96 per pay (again, MPC covers the balance).

One thing to note, your CPP contributions will end in the early/mid part of the year, and as such you will pay slightly more at the start of the year, and slightly less at the end of the year. I have not been able to get the specifics from payroll as to when exactly this happens, or the precise amount, but it is worth noting that you will see an increase to your pay mid-year when the CPP premiums reach their maximum and are no longer charged.

Overall, the best estimate to go off of is the $2,594 per pay (26 pay per year); less the health deductions after your first 3 months in Canada. As stated, this will vary a bit based on any dependents you claim, and on how the CPP breaks out over the course of the year.

To be honest all this to and fro-ing is starting to wear thin. We want to be very careful with finances and the very people who are employed to help my husband with this move are the very ones delaying things and seemingly making a mess of it!

Stu_g2004

Looks like your not earning 124k after all!!!!!

cllb2

Therein lies my issue! The offer is for £80k which roughly translates to $124k. We even told the girl at HR Vancouver this before she did the sums so god knows how she's worked this out. MY husbands boss is also fairly annoyed they have worked this out wrong. To be honest I think Jonboys estimate is pretty close but we thought we'd just get confirmation form HR and ended up with these crazy calculations!

jericho

Why are they giving it to you in English pounds? He's going to be earning Canadian dollars, so the offer should have been in dollars.

cllb2

I know, I don't have an answer to that! Because he has worked for London office for so long they gave him what the rise would be in £ - maybe so he could assess costs in the currency he knows? But it is silly and most of our costs will be in CAD!

FlyingDutchman6666

Your employer is saying you'll have a net annual income of $67'451. That would equate to a gross annual income of approx. $92'000.

Source: http://www.taxtips.ca/calculators/taxcalculator.htm

cllb2

Sorry if I haven't been clear :s
Its a girl working in HR who has calculated this, but somehow done so using the salary figure of 124k (which is a confirmed salary, as offered by husbands company). I have actually found the online calculator she used (not sure if this is how she should be working these figures out!). And it does indeed seem to give this $67,451 when you input a salary of $124,000 - so something is not right there! We're just getting frustrated getting this kind of 'help' from HR. They are the same HR team who believe you can get a nice 2 bed apartment in downtown Vancouver for approximately $1200......

FlyingDutchman6666

Could you post the link?

Adrian12

i just ran some rough numbers and on 124 k , your tax liability will be around 35k

so net annual income will be about 90 odd k so 90/26 biweekly payments = 3,461.

and as jonboy says reduced slightly for first 5 months or so due to EI and CPP but then increases.

the net the HR lady is quoting would only be a salary of just under 90k gross a year

cllb2

Thank you Adrian That seems to be around the average what we are getting. We are trying to get the figures to within a range of about $100 because that would be the best leeway on things

Flying Dutchman - I can indeed, they used this -https://www.salario.ca/ol/sdc/Calculator

I'm fully aware its more likely that my limited knowledge of the tax system is what gave me the dodgy figures. However it worried me that the HR girl must have done exactly the same thing and she works in human resources in Vancouver!

p.s. I knew a few Dutchman's from school who emigrated to Canada years ago, is your name a play on words?

JonboyE

I just tried the salario calculator and that gave me $3,217.61 per pay cheque for the start of the year when CPP and EI are being deducted.

Remember that because you will not be working your OH can claim your personal tax credits. Therefore he can claim code 6 for the federal and provincial amounts. However, this still does not get anywhere near what the HR person is coming up with.

Try this from the horses mouth: http://www.cra-arc.gc.ca/esrvc-srvce.../pdoc-eng.html

Click accept.

It defaults to salary calculation so click begin.

Leave employer and employee names blank. Province is BC, pay period bi-weekly and pay date 2012-01-15. Click next.

Salary is 4,769.23 ($124,000/26). This assumes that $124,000 is inclusive of vacation pay. You can leave everything else blank. Click next.

Change both federal and provincial claims to code 6. Leave everything else as default. Click calculate.

This gives net pay as $3,217.31. Only 30c difference from the salario calculator.

Unless there is some deduction I am missing completely your HR person has got it wrong.

cllb2

Thank you so much, JonboyE - I did say it was my lack of knowledge doing it wrong! I don't think you're missing anything at all - I just think maybe this girl shouldn't be involved in payroll

foreigngirl

This is extremely useful for us, too. A bit of an eye openner, actually.
I will be self-emplyed. Which code should we put into the taxt calculator?
Thank you!!!

JonboyE

It depends on how much you will earn. Each person is entitled to a tax credit equivalent to the tax on the first $11,000 of their income (numbers approximate). If you earn more than $11,000 you use all the credit against your own income. Your OH will therefore use code 1 in the tax calculator. If you earn less than $11,000 you can transfer the amount of your tax credit that you do not use to your OH. Your OH will need to pick the code that equates to the total of his tax credit plus the amount you will transfer to him.

Many people in his situation will choose to be taxed on code 1 and, if there is some tax credit to transfer, get a refund when they file their taxes.

foreigngirl

A 'blonde' question coming: why is OP using code 6?