TRC

Hi guys,

I set up a sole proprietorship back in February, spoke to an accountant and estimated I would pay 30% tax. After looking into this the threshold is 45,282 at 15%.

I'm just wondering if anyone can explain where they got 30% from?

Thanks

Aviator

15% is the Federal rate, you have to pay a similar amount to the province as well.

JonboyE

15% is federal tax. There is also provincial tax (5% in ON or BC, more in other provinces e.g.10% in AB) and Canada Pension Plan of c. 10%. With your tax credits if you have saved 30% you should be good.

TRC

That makes sense.

Thanks

Steve_

Remember you also have to pay both halves of CPP if you're self-employed.

Wiki: http://britishexpats.com/wiki/Starting_a_business

Siouxie

But you can claim a tax deduction - and get a credit. You end up playing half.

Canada Pension Plan (CPP) contributions | The tax planning guide 2015-2016

What is a tax credit? | The tax planning guide 2015-2016

TRC

Awesome, thanks for this Souxie. I will get this sorted at the weekend, hopefully I can get it back dated to February.

Thanks,

Aviator

There is no back dating as a proprietorship, this personal income and reported on your tax return as income minus deductions after Dec 31.

TRC

Oh OK. Sorry I didn't read the link. Thanks