Income Tax etc in Alberta
Nov 1st 2011, 1:36 pm
#1
Just Joined
Thread Starter
Joined: Nov 2011
Posts: 6
Income Tax etc in Alberta
I have been offered a job in Edmonton, which given my current employer is in the process of shutting down I'm seriously considering. I live with my partner and we have two children 18 and 14. Anyway one thing I'm struggling to nail down is how much my deductions will be on my wages. I'll be on a basic salary of $80,000 plus overtime. How much of that can I expect to have deducted and what deductions are there to consider?
Nov 1st 2011, 1:41 pm
#2
Moderαtor Emeritus
Joined: Sep 2003
Location: Upstate South Carolina
Posts: 30,768
Re: Income Tax etc in Alberta
Have a look in the wiki, I expect there will be a link to a decent tax calculator
http://britishexpats.com/wiki/Category:Taxes-Canada
http://britishexpats.com/wiki/Category:Taxes-Canada
Nov 1st 2011, 1:55 pm
#3
Every day's a school day
Joined: Jan 2005
Location: Was Calgary back in Edmonton again !!
Posts: 2,667
Re: Income Tax etc in Alberta
I have been offered a job in Edmonton, which given my current employer is in the process of shutting down I'm seriously considering. I live with my partner and we have two children 18 and 14. Anyway one thing I'm struggling to nail down is how much my deductions will be on my wages. I'll be on a basic salary of $80,000 plus overtime. How much of that can I expect to have deducted and what deductions are there to consider?
Nov 1st 2011, 5:02 pm
#4
Grumpy Know-it-all
Joined: Jul 2010
Location: Calgary, Alberta
Posts: 8,928
Re: Income Tax etc in Alberta
There are tax calculators that will give you a good idea, e.g. http://lsminsurance.ca/calculators/canada/income-tax
As it says, there may be tax credits you are eligible for. If you have a look at the Alberta TD-1 you can work out pretty quickly if there are any other deductions you are eligible for: http://www.cra-arc.gc.ca/E/pbg/tf/td1ab/td1ab-11e.pdf
The main one that most people use that isn't on the TD-1 is the RRSP deduction, which is essentially a income tax deferred pension plan you should read up on. Your employer calculates your payroll code from the TD-1, however you can only claim the RRSP deduction through a payroll reduction if the CRA allows you to by filing a T1213.
Anyway, if you don't file a T1213 and you do contribute to an RRSP, you usually get a fairly hefty refund when you file your tax return.
My other strong piece of advice based on what I've seen on this forum and other forums is DO NOT use Turbotax or some other piece of software, not for your first year return at any rate. Go to the post office, get a T1 tax package, read the general guide, understand how the tax system works, take the time to fill the forms in manually, phone up the CRA and ask questions if you get stuck. It will save you a lot of grief in the long run. Also with your first tax return certain things may need to be pro-rated unless you arrived on January 1st.
I find I pay way less tax here than I did in the UK, btw. I just can't get over the fact that the 40% rate kicks in around £40,000 in the UK and the max rate in Alberta is 39%, and doesn't kick in until $128,800!
Alberta has a flat tax of 10% (but is still progressive because it is combined with the Federal rate). What this means is basically if you earn over around $80k (I worked it out once, can't remember exactly) you pay less tax than in other provinces, but below that you pay more than you would in BC for example.
As it says, there may be tax credits you are eligible for. If you have a look at the Alberta TD-1 you can work out pretty quickly if there are any other deductions you are eligible for: http://www.cra-arc.gc.ca/E/pbg/tf/td1ab/td1ab-11e.pdf
The main one that most people use that isn't on the TD-1 is the RRSP deduction, which is essentially a income tax deferred pension plan you should read up on. Your employer calculates your payroll code from the TD-1, however you can only claim the RRSP deduction through a payroll reduction if the CRA allows you to by filing a T1213.
Anyway, if you don't file a T1213 and you do contribute to an RRSP, you usually get a fairly hefty refund when you file your tax return.
My other strong piece of advice based on what I've seen on this forum and other forums is DO NOT use Turbotax or some other piece of software, not for your first year return at any rate. Go to the post office, get a T1 tax package, read the general guide, understand how the tax system works, take the time to fill the forms in manually, phone up the CRA and ask questions if you get stuck. It will save you a lot of grief in the long run. Also with your first tax return certain things may need to be pro-rated unless you arrived on January 1st.
I find I pay way less tax here than I did in the UK, btw. I just can't get over the fact that the 40% rate kicks in around £40,000 in the UK and the max rate in Alberta is 39%, and doesn't kick in until $128,800!
Alberta has a flat tax of 10% (but is still progressive because it is combined with the Federal rate). What this means is basically if you earn over around $80k (I worked it out once, can't remember exactly) you pay less tax than in other provinces, but below that you pay more than you would in BC for example.
